By SJM
08/02/2015

ECtHR Update

Anthony Aquilina v Malta 11/12/14

This is the latest in a line of judgements from the ECtHR dealing with rent control and Article 1 of Protocol 1 (see previous reports here and here).

Mr A was the owner of a property in Malta, which he had inherited from his parents in 1984. Mr A’s mother leased the property to a couple in 1970 and the rent payable for the property was capped at a level which was substantially lower than the level that could be obtained on the open market. A court-appointed architect valued the market rent at 2,900 EUR p.a., whereas the rent payable was only 382 EUR p.a. (or 13%).

The national courts dismissed Mr A’s application and on 20/12/2011, he petitioned the Strasbourg Court. The question for the Court was whether the national legislation struck a fair balance between the interests of the general community and Mr A’s fundamental property rights. The Court noted that only 2% of the Maltese population requested assistance with social housing, the Government had provided no information on the numbers of tenants who still benefited from protected rents, the Maltese minimum wage had increased from 1979, when rent controls were introduced, the tenants in question were spending a only a small fraction of their yearly income on rent and it was only possible for Mr A to recover possession where there had been a breach of the tenancy agreement. The Court therefore found that a disproportionate and excessive burden had been placed on Mr A, who was forced to bear the social and financial costs of supplying affordable housing to his tenants.

The Court awarded damages of 14050 EUR and costs.

 

 Akhverdiev v Azerbaijan 29/1/15

On 8/10/05 Mr A acquired ownership of a property in Baku, Azerbaijan. On 14/5/04 the Baku Executive Authority issued an order granting permission for the design of a commercial and residential complex on land of which Mr A’s property was part. Towards the end of 2009, Mr A was asked to relocate to a 5 room flat which had been built over a relocated cemetery. Mr A refused, arguing that there was no lawful basis for the demand. Mr A and his family were forced to move out because of the surrounding construction works and the property was demolished in December 2009.

The national courts dismissed Mr A’s claim for compensation, finding that he had been ‘compensated in kind’ by virtue of the offers of alternative accommodation.

The ECtHR found that the expropriation was not in accordance with the law and that Mr A had been unlawfully deprived of his possessions under A1P1. It was surprising that the Authority had asserted Mr A’s right to ownership of the property a year after the order which, the Government claimed, provided the authority to expropriate it. Furthermore, the order was merely in the form of a permission to a private developer and there was no formal notification to Mr A of the legal basis of the proposals. Furthermore, the Authority appeared to have no jurisdiction to make an expropriation order and the Housing Code upon which the offer of compensation was made was inapplicable.

The Court reserved its decision on just satisfaction.

[NB this case is to be compared with another recent case, Saghinadze v Georgiawhere the Court accepted the governments proposals for relocation of the applicant to accommodation which provided living space similar to that which the applicant and his family occupied previously, plus 3000 EUR in pecuniary damages]

 

Stolyarova v Russia 29/1/15

Ms S became the owner of a flat in Moscow on 17/3/05, which followed a series of transactions later impugned by the Moscow housing department as improper and unlawful (namely there had been an exchange of flats after one of the parties had in fact died). Ms S argued that she was the bona fide purchaser of the flat and she contested the department’s application to rescind her title to the flat and to have her evicted. The national courts granted the department’s application and Ms S petitioned the ECtHR.

Notwithstanding the government’s argument that States enjoyed a wide margin of appreciation in taking steps to preserve their housing stock, The Court found a violation of A1P1. It was not for a bona fide purchaser to pay the price for inadequate supervision by the State of earlier transactions. The State must assume full responsibility for its errors and Russia failed to strike a fair balance between the public interest and Ms S’s property rights.

The Court also found that the interference was not necessary in a democratic society under Article 8 and it makes the following interesting observation (at para.61):

The Court observes that the applicant’s home has been repossessed by the State, and not by a private party whose interests in the flat would have been at stake (see Orlić, cited above, § 69). Insufficient details were given about the intended beneficiaries allegedly on the waiting list for social housing to allow the Court to weigh their personal circumstances against those of the applicant. In any event, no individual on the waiting list would have had the same attachment to the flat as the applicant; nor would he or she have had a vested interest in that particular dwelling, as opposed to a similar one.

This suggests that there are cases (although perhaps only where private ownership rights are at stake) where the State is expected to particularise the intended recipients of social housing.

Russia was ordered to restore Ms S’s title to the flat and to pay her 7500 EUR in non-pecuniary damages, plus costs.

 

SJM is partner and head of the housing and public law department at Miles and Partners LLP, based in London E1.

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