By J
10/05/2020

Article 1, Protocol No.1 – a brief introduction

We’ve had quite a few new visitors to this blog over the last few hours and quite a lot of questions about A1/P1 and how it works in the context of a general abolition of residential rents. So here is our quick guide.

What does it say?

Art.1, Protocol No.1, ECHR provides as follows:

(1) Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
(2) The preceding provisions shall not, however, in any way impair the right of a state to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.

What is a possession?

The European Court of Human Rights takes a broad (or “autonomous”) view of what amounts to a possession: Gasus Dosier-und Fordertechnik GmbH v Netherlands (1995) 20 E.H.R.R. 403; Beyler v Italy (2001) 33 E.H.R.R. 52. One way of looking at it is to ask whether the right is sufficiently certain to amount to an “asset”: Kopecky v Slovakia App. No. 44912/98.; 1) Radomilja (2) Jakelijic v Croatia App. Nos 37685/10, 22768/12.

It seems inevitable that an accrued right to receive rent under a contract (and the right to receive future rent under that same contract) would be regarded as a “possession” for these purposes.

 

What kinds of interference are dealt with?

There are three kinds of act that A1/P1 regulates. They are (in order of seriousness):

1) a “deprivation”, e.g. expropriation or other extinction of the legal rights of the owner;

2) a “control of use”, e.g. rent control legislation (see the seemingly endless line of cases involving Malta, e.g. Aquilina v Malta App. No.3851/12); and,

3) an “interference” which is less than the previous two.

The distinction matters because the level of justification required in order for the act to be proportionate increases as the interference becomes more serious (i.e. 1) requires more cogent justification than 3)).

 

Justification

Compensation is a crucial part of justification for the interference. The taking of property “… the without payment of an amount reasonably related to its value would normally constitute a disproportionate interference which could not be considered justifiable under Article 1…”: James v United Kingdom (1986) 8 E.H.R.R. 123.

Rent control cases are dealt with under the “control of use” provisions. Here, again, the Maltese cases are instructive. In very broad terms, since at least 1979, Maltese law has provided for rent controls in the private rented sector. Those controls have meant that rental levels are now generally less than 20% of the market rent. The European Court of Human Rights has, on a number of occasions, found that domestic law is incompatible with Art.1, Protocol No.1 because it imposes a disproportionate burden on private landlords: e.g. Cessar v Malta App. No. 50570/13 .

If rent control legislation (where the landlord is at least getting *some* money) violates A1/P1 where it sets the rent level too low, then it is almost inevitable that abolition of rental liabilities (which would be a deprivation, not a control of use) would fail.

 

But what about the existing restrictions?

The various “lockdown” regulations have closed certain businesses and not paid compensation to anyone. Why are those fine under A1/P1? That’s a good question, but, by now, you can probably work out the answer. A short term closure on public health grounds is probably a control of use, rather than a deprivation. And there has been some form of compensation (non-domestic rates relief; wage support; tax deferral; supported loans etc). It isn’t comparable with the abolition of a property right.

 

 

J is a barrister. He considers housing law to be the single greatest kind of law known to humankind and finds it very odd that so few people share this view.

24 Comments

  1. Alex Andrews

    Correct me if I’m wrong, but my understanding of the argument is that essentially everybody has the right to rent out something they own, and this right is therefore considered to be a possession? If so then I would say that nobody has an intrinsic right to rent out something they own in the same way that nobody has the intrinsic right to smoke whatever narcotic substance they happen to own. They may be permitted to do these things but that does not amount to a right. I fail to see how Parliament could not enact legislation, say, outlawing the private letting of residential property ie limiting it to a specific set of not-for-profit organisations like housing associations, charities, hospitals (eg. accommodation for nurses), Councils, etc.

    Reply
    • J

      Not quite. The state cannot interfere with your private property and your right to deal with it as you see fit, unless certain conditions are met. What those conditions are in any given case depends on the nature of the interference.

      Reply
  2. Bradain

    How significant is the phrase *normally in the quote you use?

    The taking of property “… the without payment of an amount reasonably related to its value would normally constitute a disproportionate interference which could not be considered justifiable under Article 1…”: James v United Kingdom (1986) 8 E.H.R.R. 123.

    There are examples in society where people are deprived of their property without any compensation, an example being someone who can not account for source of funds used to acquire said property.

    The requirement to provide compensation is not as absolute as you attempt to present.

    Reply
    • J

      James says “normally”. Of course there are exceptions, even to a “deprivation” case. But 1) it’s hard to see how a general deprivation of all rental income for all landlords regardless of their means or the means of their tenant could be justified; 2) in any event, if there is going to be a fight about this (and there will be – litigation would be inevitable), then the UK government wants this to be a “control of use” rather than a “deprivation” because that makes the job of justifying the interference much easier to do; 3) the best analogy is with the rent control cases, rather than proceeds of crime (and similar cases) – see R v. Rezvi and Phillips v. United Kingdom (confiscation of criminal property) – those powers are about deterring criminal behaviour, rather than depriving someone of a property asset.

      Reply
      • Bradain

        I think there would be a fight about it i just thought that it was slightly misleading to say in your opening statement that it was “… a straightforward breach of Article 1 Protocol 1 of the charter of Human Rights, unless there was compensation.” which seemed to imply it was a settled question.

        I do think the criminal proceeds cases are relevant as they are examples of deprivation being allowed where there is a justification, rather than the presence of a justification meaning a deprivation is secondary.

        There has already been deprivation/control of property regardless of means as a result of the current situation in the closing of shops, pubs, restaurants etc why should that not extend to rental properties. Can the justification of the former apply to the latter, or is there equivalent variation of the justification that would apply.

        Is it not your argument that while deprivation/control can be justified by the health emergency it does not extend to rental properties. Or are you arguing that all business must be compensated. Either way it is surely not straightforward.

        Reply
        • J

          Take it in the stages explained in the post
          1) Is the right to receive rent under a contract a possession? Yes.
          2) Is a general rent waiver within the scope of A1/P1? Yes
          3) What kind of interference would it be? Almost certainly a deprivation.
          4) So what is needed to make the interference proportionate? Compensation is really all that the state can offer. And whilst it need not necessarily be full market rent compensation, it has to be reasonably related to the value of the asset that one is being deprived of. To put it another way, proportionality means looking at whether one group (landlords) are made to bear a disproportionate burden to achieve a wider public benefit. Losing 100% of your property right without any compensation would be *hard* to describe as proportionate.
          5) Some people seem to complain that because there isn’t a case on these precise facts, I can’t be sure of what I say. But that is the point of previous decisions and of building a body of precedent and, frankly, of being a good lawyer. Imagine that Parliament passed the “People called Fred (Mandatory Execution) Act 2020”, permitting (nay, requiring) the police to find and execute all people called Fred. There is no case directly on those facts. But based on previous case-law, we can be pretty sure that it’d amount to a violation of Art.2 (right to life).

          The categories are *really* important. There hasn’t been a deprivation of property *by the state*. The cafe owner still owns her cafe. She can’t presently trade from it, but she still owns it. So it is a control of use case.

        • Sam

          I thought I had posted a response to this but it seems to have been lost.

          The other key point is also about the legitimate aim and its relationship to proportionality. Waiving rent isn’t about protecting public health: it a socio-economic and inherently political decision about where the economic loss should fall arising from the pandemic. Closing a cafe and stopping evictions is about protecting public health: it is all about preventing the spread of the virus. Those deprivations/controls of use are therefore much easier to justify because there isn’t really anything else you can do to achieve of the aim of the measure.

          But there are lots of other things you can do alleviate a tenant’s bad fortune (benefits, loans, payment holidays), which don’t necessarily require expropriating a landlord’s asset. If you step back a moment and actually analyse what is being proposed, you can see why it is so difficult. You are seeking to expropriate from a class of people a possession and pass the benefit onto another class of people. Much harder to justify than closing a cafe to protect everybody’s health.

  3. James Ellis

    It is almost as if part 1 and part 2 contradict each other. Part 1 says ‘you have a right to enjoy your property and income from it’ whilst part 2 says ‘unless it’s in the wider interest to interfere with that and/or tax the life out of it’. Presumably it could be argued that it IS in the wider interest to control the income? (Not to mention taxing the life out of it, which they’re already trying).

    Reply
    • J

      Tax is very different. It’s expressly exempted in the Article

      Reply
  4. Bradain

    I can’t reply to your post. Perhaps because you have decided to end the exchange but I do feel the need to address the points raised as you chose to respond to my comment.

    Quote : “The categories are *really* important. There hasn’t been a deprivation of property *by the state*. The cafe owner still owns her cafe. She can’t presently trade from it, but she still owns it. So it is a control of use case.”

    The landlord is still the owner of the property. If retaining ownership distinguishes a control of use case from a deprivation case then why is the cafe trade different from the rental trade? Cafe owner retain ownership of cafe but was prevented from generating income from it. Landlord retains rental property but was prevented from generating income from it. If

    Pretty sure it would be a violation of Article 2? Yes,but not “straightforward” as even right to life is not absolute.

    Reply
    • J

      I’ve not ended the exchange. I suspect wordpress is being silly.

      You’re confusing two things. What the landlord is being deprived of is the rental income. It existed as a defined right (both accrued and future). The state then abolishes it. That is not comparable to a situation where a cafe owner is simply prevented from trading for a period of time. The government has not destroyed her property rights – her property rights are the tenancy/freehold of the cafe.

      Reply
      • Bradain

        The landlords rights have not been destroyed as they retain ownership of the property, as the cafe owner retains tenancy/freehold?

        Both the cafe owner and landlord will have been prevented from using their asset to generate income. The property rights relating to use is what is being interfered with.

        Why is it legal for a cafe owner to be prevented from using their asset to generate income while it is not legal for a landlord to be prevented from using their asset to generate income?

        Reply
        • Giles Peaker

          a) The control of the cafe owner’s use is arguably necessary from a public health position. Removing the contractual right to residential rent isn’t.
          b) It isn’t ‘income generation’, it is contractual rent in return for a right in property. That entitlement to the contractual rent is a property right now and for the duration of the tenancy term. It is not an opportunity to trade.

    • Giles Peaker

      The site software will only allow a certain level of nested reply before making you add a fresh comment. Sorry. No need to be paranoid about it.

      Reply
      • Bradain2020

        a) The removal of contractual right to rent is arguably necessary from a public health position because it is the consequence of preventing people going to work which arguably necessary from a public health position. Proximity.

        b) Ok, lets move away from the example of the cafe owner. If the business that was closed rented property , other than fixed property, and had in place a number of contracts that were frustrated by the requirement to close. Must they receive compensation?

        Not paranoid. The inability to reply was a matter of fact. I acknowledged that it may be that the person I was engaging with had decided to end the exchange, it’s not uncommon for people to decide they no longer want to discuss something. I’m probably being defensive now.

        Reply
        • Giles Peaker

          On a) no, arrears might well be a consequence of the coronavirus measures, but that doesn’t make removing the right to rent into a public health measure. Preventing evictions during the emergency, as per PD 51Z, would be a public health measure (as it is expressed to be), but there is no public health necessity to removing right to rents.

  5. Bradain

    Removing right to rents is public health necessity because it is linked to requiring people not to go to work. Requiring people not to go to work is the health necessity but removing right to rent is the mechanism. Public health necessity is not just a justification that covers an objective but the means of achieving the objective.

    Regardless, the government legislates for loss of right to rent arrears without compensation in any number of situations, the scenarios that allow for it are almost limitless. I’m not sure where you have come up with the idea that it is prohibited under a human rights convention unless compensation has been paid. You may argue that this is not a scenario that should be legislated to allow loss of right to rent arrears but not on the basis that there is a “straightforward” prohibition without compensation.

    Reply
  6. Jon Heath

    We’ve touched on this on Twitter, but I think it not at all obvious that a cancellation of accrued rent obligations for a period of months amounts to a deprivation/expropriation. Mellacher v Austria is the fons et origo of the Strasbourg jurisprudence on rent controls. The Mellachers had leased their flat to a tenant at an agreed monthly rent of 1,870 Austrian schillings (ATS). The Austrian courts ruled that the rent had to be reduced to 330 ATS per month. Quoting from the ECtHR’s judgment:

    “In the applicants’ view, the 1981 Rent Act had had the result of turning them into mere administrators of their property, receiving remuneration controlled by the public authorities. They claimed that the effect of the reductions was such that they could be regarded as equivalent to a deprivation of possessions. They maintained that the depreciation of their possessions, following the introduction of the system of fixing rents per square metre, amounted to a de facto expropriation. They also alleged that they had been deprived of a contractual right to receive payment of the agreed rent.

    The Court finds that the measures taken did not amount either to a formal or to a de facto expropriation. There was no transfer of the applicants’ property nor were they deprived of their right to use, let or sell it. The contested measures which, admittedly, deprived them of part of their income from the property amounted in the circumstances merely to a control of the use of property. Accordingly, the second paragraph of Article 1 (P1-1) applies in this instance.”

    No compensation was offered to the applicants by the Austrian government. The ECtHR held that A1/P1 was not violated.

    If a government-imposed reduction of more than 80% to the contractually-agreed rent persisting for an indefinite period of time was not deprivation/expropriation, then it is difficult to see why a government-imposed reduction of 100% for a period of, say, 3 months would be. In practical terms, the latter would be equivalent to a one-off reduction of 25% in the annual rent, which on any view is a much less significant interference than in Mellacher or the Maltese cases cited.

    This is important because, as you correctly suggest, it is very difficult to justify deprivation/expropriation without paying adequate compensation: “the taking of property without payment of an amount reasonably related to its value will normally constitute a disproportionate interference and a total lack of compensation can be considered justifiable under Art 1 of Protocol No. 1 only in exceptional circumstances” (Scordino v Italy (No. 1)), but there are cases in which control measures were held not to be a breach of A1/P1 notwithstanding that *no* compensation was offered by the state (Mellacher itself being one such).

    Mellacher v Austria: https://www.bailii.org/eu/cases/ECHR/1989/25.html
    Scordino v Italy (No. 1): https://www.bailii.org/eu/cases/ECHR/2006/276.html

    Reply
    • J

      Oh, if you can get this into a “control of use” category then I’d certainly agree that there are cases where no compensation is due. Planning permission is the obvious “control of use” and no compensation is needed. Adverse Possession is a control of use without compensation.

      But I struggle with how a 100% removal of an accrued right is not a deprivation.

      Reply
      • Jon Heath

        I think there are two problems here. The first is that the distinction between a time-limited reduction of 100% and a reduction of less than 100% for an indefinite period seems to me to be purely formal and thus not one capable of properly dividing deprivation from control of use. Second, were the matter free from authority, I would have no difficulty accepting that the contractual right to receive rent is in itself property distinct from the bricks and mortar, and hence that a state-imposed reduction could amount to deprivation – the problem is that some version of that argument seems to have been run on several occasions in the ECtHR rent control cases, without ever having succeeded. Perhaps it just needs a more determined advocate ;-)

        Reply
        • Giles Peaker

          A reduction, or limitation, is clearly possible, depending on degree (and justification). A removal of the right to rent at all would be very hard to figure as ‘rent control’ – it isn’t, particularly if, as you suggest, it is time limited. It doesn’t control the rent, nor does it control the amount of relief different tenants would receive.

          (Though that in itself is a problem for the rationale. What time limit? Three months is just a random period if the underlying conditions for renters have not changed after that time, so no clear connection with a purpose. Also, clearly there is no public health justification for a general rent waiver for any period of time – given that the immediate public health issue of evictions has been dealt with otherwise.)

        • J

          Run the analysis in the context of a non-rent issue. I am purchasing a car on HP. The car remains the property of the garage until I make the last payment. Because of Coronavirus, I now have no money, but I still have (say) 10 payments to make. If the gov cancels those payments and transfers title to me, then the garage has been deprived of its possessions. How is that justified without financial compensation from the state?

        • J

          Ha! But the reason I don’t think those earlier cases really help is that the argument didn’t arise on the facts. It plainly wasn’t a deprivation – they still got *some* income. It was a case of the applicants overstating their case (a bit like in Kilbourn v UK (1984) 8 EHRR 45 – apparently authority for the propostion that the Rent Acts pass the ECHR, although the LL there didn’t argue A1P1, relying instead on Art.3!!!)

  7. Bradain

    What’s the situation with liquidations, Bankruptcy etc where a landlord may loose right to receive rent under a contract without compensation?

    Why is that not a deprivation that falls foul of Article 1 of Protocol No. 1?

    Could the Government introduce a similar legislative process but change the qualifying criteria to suit the circumstances of Covid 19 disruption so that individuals seeking to have arrears written off could apply using the process?

    Reply

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