CEDH · CASELAW;JUDGMENTS;GRANDCHAMBER;ENG — 28 avril 2008

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margin-bottom:0pt; text-align:right } .s5E1364CA { margin-top:0pt; margin-bottom:12pt; text-align:center; page-break-inside:avoid; page-break-after:avoid; font-size:14pt } .sCA1147F8 { margin-top:12pt; margin-bottom:12pt; text-align:center; page-break-inside:avoid; page-break-after:avoid } .sC202EACC { clear:both; mso-break-type:section-break } .sA1D3DA2E { margin-top:0pt; margin-bottom:0pt; text-align:justify } .sF6A12959 { width:33%; height:1px; text-align:left } .s4AA8B09A { margin-top:6pt; margin-bottom:6pt; text-align:justify; font-size:10pt } .sE2087DD { margin-top:6pt; margin-bottom:0pt; text-align:justify; font-size:10pt } .s85226119 { margin-top:0pt; margin-bottom:0pt; text-align:justify; font-size:10pt } .s3133A7C8 { font-family:Arial; color:#0069d6 } .sB853CD25 { font-family:Arial; font-size:9pt }     GRAND CHAMBER             CASE OF HUTTEN-CZAPSKA v. POLAND   (Application no. 35014/97)                     JUDGMENT (Friendly settlement)     STRASBOURG   28 April 2008     This judgment is final but may be subject to editorial revision. In the case of Hutten-Czapska v. Poland, The European Court of Human Rights, sitting as a Grand Chamber composed of:   Jean-Paul Costa, President,   Luzius Wildhaber,   Christos Rozakis,   Bostjan M. Zupančič,   Giovanni Bonello,   Peer Lorenzen,   Kristaq Traja,   Snejana Botoucharova,   Mindia Ugrekhelidze,   Vladimiro Zagrebelsky,   Khanlar Hajiyev,   Renate Jaeger,   Egbert Myjer,   Sverre Erik Jebens,   David Thór Björgvinsson,   Ineta Ziemele, judges   Anna Wyrozumska, ad hoc judge, and Michael O'Boyle, Deputy Registrar , Having deliberated in private on 31 March 2008, Delivers the following judgment, which was adopted on that date: PROCEDURE 1.     The case originated in an application (no. 35014/97) against the Republic of Poland lodged with the European Commission of Human Rights (“the Commission”) under former Article 25 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a French national, Mrs Maria Hutten-Czapska (“the applicant”), on 6 December 1994. 2.     The applicant was represented by Mr B. Sochański, a lawyer practising in Szczecin. The Polish Government (“the Government”) were represented by their Agent, Mr J. Wołąsiewicz, of the Ministry of Foreign Affairs 3.     In a judgment of 19 June 2006 (“the principal judgment”), the Court (Grand Chamber) held that there had been a violation of Article 1 of Protocol No. 1 to the Convention. It found that that violation had originated in a systemic problem connected with the malfunctioning of domestic legislation in that: (a)     it had imposed, and continued to impose, restrictions on landlords' rights, including defective provisions on the determination of rent; (b)     it had not and still did not provide for any procedure or mechanism enabling landlords to recover losses incurred in connection with property maintenance (see the third operative provision of the principal judgment). In that connection, the Court directed that, in order to put an end to the systemic violation identified in the present case, the respondent State must, through appropriate legal and/or other measures, secure in its domestic legal order a mechanism maintaining a fair balance between the interests of landlords and the general interest of the community, in accordance with the standards of protection of property rights under the Convention (see the fourth operative provision of the principal judgment). In respect of the award to the applicant for any pecuniary or non ‑ pecuniary damage resulting from the violation found in the present case, the Court held that the question of the application of Article 41 was not ready for decision in so far as the applicant's claim for pecuniary damage was concerned and reserved the said question, inviting the Government and the applicant to submit, within six months from the date of notification of the principal judgment, their written observations on the matter and, in particular, to notify the Court of any agreement that they might reach (see the fifth operative provision of the principal judgment). More specifically, in respect of Article 41 the Court considered that that issue should be resolved not only having regard to any agreement that might be reached between the parties but also in the light of such individual or general measures as might be taken by the respondent Government in execution of the principal judgment. Pending the implementation of the relevant general measures, the Court adjourned its consideration of applications deriving from the same general cause (see Hutten–Czapska v.   Poland [GC], no. 35014/97, § 247, ECHR 2006-VIII). Lastly, the Court awarded the applicant 30,000 euros (EUR) in respect of non-pecuniary damage and EUR 22,500 in respect of costs and expenses up to that stage of the proceedings before the Court and dismissed the remainder of her claim for non-pecuniary damage. 4.     The parties, following an extension of the relevant time-limit granted at the Government's request, submitted their observations on 2 April 2007. Further pleadings were filed by the Government on 14 May 2007 and by the applicant on 1 June 2007. In her pleading, the applicant suggested that friendly-settlement negotiations, which the parties had started in March   2007, should be continued with the Registry's assistance. 5.     On 21 June 2007 the Government asked the Deputy Registrar for assistance in negotiations between the parties, aimed at reaching a friendly settlement of the case. 6.     The representatives of the Registry held meetings with the parties in Warsaw on 7 and 8 February 2008. On 8 February 2008 the parties signed a friendly-settlement agreement, the text of which is set out below in the “Law” part of the judgment (see paragraph 27 below). THE FACTS 7.     The applicant, who is a French national of Polish origin, was born in 1931 and lives in Poznań. I.     DEVELOPMENTS FOLLOWING THE PRINCIPAL JUDGMENT 8.     On 17 May 2006, on an application of 24 August 2005 by the Ombudsman ( Rzecznik Praw Obywatelskich – see Hutten-Czapska cited above, §§ 143-146), the Constitutional Court ( Trybunał Konstytucyjny ) declared unconstitutional a number of provisions of the Act of 21 June 2001 on the protection of the rights of tenants, housing resources of municipalities and on amendments to the Civil Code ( Ustawa o ochronie praw lokatorów, mieszkaniowym zasobie gminy i o zmianie Kodeksu cywilnego – “the 2001 Act”), in particular those on rent increases (see also paragraph 12 below). In implementation of that judgment, Parliament enacted amending legislation of 15 December 2006, which introduced, among other things, new provisions on rent increases (see paragraphs 15-18 below). 9.     On 11 September 2006 the Constitutional Court declared unconstitutional further provisions of the 2001 Act which limited municipalities' civil liability for failure to provide social accommodation to a tenant in respect of whom a landlord obtained an enforceable eviction order (see paragraphs 13, 19 and 20 below). 10.     Laws on the State's financial assistance for social accommodation and on the system for monitoring the levels of rent within Poland were introduced on 8 December 2006 and 24 August 2007 respectively (see paragraphs 14 and 21 below). 11.     On 29 February 2008 the Government submitted a Bill on Supporting Thermo-Modernisation and Renovations ( projekt ustawy o wspieraniu termomodernizacji i remontów ) to Parliament (see also paragraphs 22-26 below). II.     RELEVANT DOMESTIC LAW AND PRACTICE A.     Constitutional Court's judgments 1.     Judgment of 17 May 2006 (no. K 33/05) 12.     The Constitutional Court partly granted the Ombudsman's application and repealed sections 8a (5), 8a (7) 1) of the 2001 Act with effect from 23 May 2006 and sections 8a (6) 1 and 9 (1) of that Act with effect from 31 December 2006, holding that they were incompatible with Article 2 (the rule of law), Article 31 § 3 (principle of proportionality), Article 64 §§ 1 and 2 (principle of protection of property rights and principle of equality before the law) and Article 76 § 1 (duty to protect citizens against dishonest market practices) of the Constitution. It made the following findings in particular: “The protection of tenants, the manner of determining rent and charges and the rights of landlords are among the issues which have frequently been examined by the Constitutional Court. On the one hand, this demonstrates the particular importance of these issues for society, on the other this may simply prove the legislature's exceptional and enduring inability to resolve them in a fair, constitutional manner respecting – ex aequo et bono – the rights of both parties to the legal relations between landlords and tenants. ... The Constitutional Court – with concern – notes the relevant authorities' complete lack of reaction to the criticism of [the 2001 Act] expressed in this court's judgments and the Ombudsman's appeals. In the light of the information in this court's possession, it appears that at present no legislative work aimed at removing the unconstitutionality of the provisions of the 2001 Act is being done in Parliament and that the Government's work is at an early stage of consultations within ministries. This is the situation nearly one year after the Constitutional Court issued its recommendations for Parliament. This practice – which in fact is tantamount, on the part of the legislative and executive authorities, to ignoring clear directives to implement amendments necessary from the point of view of citizens' rights and freedoms – together with the authorities' approach of waiting for the Constitutional Court's next judgment repealing unconstitutional provisions, must be assessed critically.” Referring to the challenged provisions on rent increases, the court stressed their unforeseeability, in particular the lack of clear criteria for “justified cases” where landlords could raise rent above the ceiling of 3% of the reconstruction value of the dwelling within one year – which made judicial control of rent increases illusory and arbitrary for both landlords and tenants. It criticised, as it had done in its recommendations of 29 June 2005 (see Hutten-Czapska , cited above, § 142), the lack of statutory elements of rent and the lack of reference to relevant factors for increases in rent, such as costs of repairs and maintenance and “decent profit” ( godziwy zysk ). 2.     Judgment of 11 September 2006 (no. P 14/06) 13.     The judgment was given in response to a legal question put by the Kościan District Court ( Sąd Rejonowy ), concerning the constitutionality of section 18(4) of the 2001 Act in so far as it limited the civil liability of a municipality responsible for the provision of social accommodation to a tenant in respect of whom the landlord obtained an enforceable eviction order (see also paragraph 19 below). Pursuant to section 18(3) of the 2001 Act, as long as the municipality has not supplied social accommodation, the protected tenant pays the same amount of rent that he would have paid if the tenancy had not been terminated. According to section 18 (1) and (2), other tenants in respect of whom the tenancy has terminated and who have not vacated the flat pay compensation to a landlord corresponding to the market-related rent that the landlord could normally receive. If such compensation does not cover losses incurred by a landlord, he may seek supplementary compensation. Section 18(4) limited the compensation which a landlord could seek from a municipality for its failure to supply social accommodation to a protected tenant to the shortfall between the market-related rent that he could normally receive and the rent that he actually received from the protected tenant, supplementary compensation not being recoverable from the municipality. The Constitutional Court ruled that the impugned provision was incompatible with Article 77 § 1 (right to compensation for unlawful acts of public authorities) and Article 64 §§ 1 and 3 (principle of protection of property rights and prohibition of disproportionate interference with property rights) of the Constitution. B.     The Act of 8 December 2006 14.     The Act of 8 December 2006 on financial assistance for social accommodation, protected accommodation, night shelters and houses for homeless ( ustawa o finansowym wsparciu tworzenia lokali socjalnych, mieszkań chronionych, noclegowni i domów dla bezdomnych ) sets out conditions for obtaining financial assistance from the State for the construction of buildings or dwellings designated for social accommodation (as defined by the 2001 Act) and for the purpose of securing other forms of accommodation for the less well-off. Such assistance can be obtained by municipalities, unions of municipalities and public benefit organisations ( organizacje pożytku publicznego ) in connection with the construction, renovation, conversion, alteration of use or purchase of buildings. Depending on the nature of the development, the subsidies available vary from 20% to 40% of the costs of the investment. The payments are secured by the State Economy Bank ( Bank Gospodarstwa Krajowego ) from money allocated to the Subsidies Fund ( Fundusz Dopłat ). C.     The December 2006 Amendment 15.     The Act of 15 December 2006 on amendments to the 2001 Act on the protection of the rights of tenants, housing resources of municipalities and on amendments to the Civil Code (“the December 2006 Amendment”) ( ustawa o zmianie ustawy o ochronie praw lokatorów, mieszkaniowym zasobie gminy i o zmianie Kodeksu cywilnego ) entered into force on 1   January 2007. 1.     New statutory definition of expenses involved in maintenance of a rented dwelling 16.     The December 2006 Amendment added a new subsection 8a to section 2(1) of the 2001 Act. Section 2(1) 8a reads: “If this law refers to expenses connected with maintenance of a dwelling, [this expression] should be understood as expenses incumbent on the landlord and calculated proportionally to the usable surface of the dwelling in relation to the total usable surface of all dwellings in the building, including a fee for perpetual use of the land, property tax and the [following] costs: (a)     maintenance and keeping property in a proper technical condition, as well as renovations; (b)     administration of property; (c)     upkeep of shared premises, lifts, collective aerial installations, intercoms and greenery; (d)     property insurance; (e)     other [items], if they are stipulated in a [lease] agreement.” 2.     New provisions on rent increases 17.     Following the December 2006 Amendment Section 8a (4) of the 2001 Act [1] is worded as follows: “An increase whereby rent or other charges for the use of the dwelling would exceed 3% of the reconstruction value of the dwelling within 1 year, may take place only in justified cases referred to in subsections 4(a) and 4(e). At the tenant's written request, the landlord shall, within 14 days from receipt of the request, give reasons for the increase and its calculation in writing, failing which the increase shall be null and void.” 18.     Amended rules for rent increases are set out in the above-mentioned new subsections 4(a)-4(e) which were inserted into section 8a. They read, in so far as relevant, as follows: “4(a)     If the landlord does not receive income from rent or other charges for the use of a dwelling at a level covering the costs of maintenance of the dwelling, as well as securing to him a return on capital investment and profit ... an increase enabling him to reach that level shall be considered justified if it remains within the limits set out in subsection 4(b). 4(b)     In an increase of rent or other charges for the use of a dwelling, the landlord may include: (1)     a return on capital investment at the maximum level per year:   (a)     1.5% of the investments made by the landlord for the construction or purchase of a dwelling; or   (b)     10% of the investments made by the landlord for the permanent improvement of the dwelling, increasing its usable value until the full return [of such investments]; (2)     decent profit. ... 4(e)     An increase in rent or other charges for the use of dwelling which does not exceed the average general yearly retail price index in the previous calendar year shall be considered justified. The average general yearly retail price index for the previous calendar year shall be published, in the form of a communiqué, by the President of the Central Statistical Office in the Official Gazette of the Polish Republic ' Monitor Polski' .” 3.     New rule governing the civil liability of municipalities for failure to supply social accommodation to a protected tenant 19.     Section 18(3) of the 2001 Act still maintains favourable provisions on the amount of rent to be paid during the period between the issue of an eviction order and the vacation of the flat by protected tenants who, on account of their low income, are entitled to social accommodation from a municipality (see paragraph 13 above and, as regards the situation concerning the provision of social accommodation to tenants under the rent ‑ control scheme as applicable until the adoption of the principal judgment, see also Hutten-Czapska, cited above, §§ 79 and 89). However, in connection with the implementation of the Constitutional Court's judgment of 11 September 2006 (see paragraph 13 above) the December 2006 Amendment added a new provision (subsection (5)) to section 18, which makes the municipality liable, under the rules of tort, for any damage sustained by the landlord on account of its failure to provide the tenant with social accommodation. This provision reads as follows: “(5)     If the municipality has not provided social accommodation to a person who is entitled to it by virtue of a judgment, the landlord shall have a claim for damages against the municipality, on the basis of Article 417 of the Civil Code.” Consequently, the municipality's failure is statutorily deemed to be an “unlawful omission” within the meaning of Article 417 of the Civil Code. D.     Article 417 of the Civil Code 20.     Article 417 of the Civil Code reads, in so far as relevant, as follows:   “1.     The State Treasury, municipality or another legal person wielding public power by virtue of the law shall be liable for damage caused by an unlawful act or omission in the exercise of that power.” E.     The August 2007 Amendment 21.     The Act of 24 August 2007 on amendments to the 1997 Land Administration Act and certain other statutes (“the August 2007 Amendment”) ( ustawa o zmianie ustawy o gospodarce nieruchomościami oraz o zmianie niektórych innych ustaw ) introduced an information system for monitoring the levels of rent within Poland. That system is referred to as a “rent mirror” ( lustro czynszowe ). It gives information on the average rent levels in a given region, thus creating an additional tool for civil courts adjudicating on disputes arising from rent increases by landlords (see Hutten-Czapska , cited above, § 138). Under section 186 a of the 1997 Land Administration Act, a new provision introduced by the August 2007 Amendment, a manager administering property including flats for rent is obliged to supply information to the relevant local government concerning the level of rent for rented flats in relation to the building's location, its age and technical condition, the usable surface of the flat and its characteristics, resulting from tenancy agreements concluded in respect of dwellings in buildings administered by him. Pursuant to section 6 of the August 2007 Amendment, the municipality is required to publish in the regional official gazette ( wojewódzki dziennik urzędowy ) an inventory of data concerning levels of rent for privately-owned residential dwellings situated within its administrative borders. F.     The Government's Bill 22.     The Government's Bill on Supporting Thermo-Modernisation and Renovations (“the Bill”) was submitted by the former Cabinet to Parliament in its original version in September 2007. Following the dissolution of Parliament and early parliamentary elections in October 2007 the legislative process was discontinued. The present Government intend to give priority to the Bill. It was re ‑ examined by the Cabinet, adopted on 19 February 2008 and transmitted to the Government Centre for Legislation ( Rządowe Centrum Legislacji ). On 29 February 2008 the Bill was submitted to Parliament. 23.     The Bill is part of the Government's housing programme, aimed at improving the existing housing resources. In particular, it concerns tenement houses – both State and privately-owned – that, as stated in an explanatory report on the Bill, have been neglected and fallen into disrepair as a result of the operation of the rent-control scheme, which made it impossible for landlords to receive rent that would secure investment in proper maintenance and renovations. The explanatory report states that within the next 8 years it will become necessary to demolish 40,000   tenement houses with 200,000 flats belonging to private individuals, municipalities or housing communes. 24.     Under sections 3-7 of the Bill, an investor who has carried out renovation or thermo-modernisation work will be entitled to the so-called “renovation refund” ( premia remontowa ) or “thermo-modernisation refund” ( premia termomodernizacyjna ). A renovation refund means in practice a partial refund of a loan taken out for the purposes of renovating a building, including the replacement of windows, renovations of balconies, fitting of the necessary installations or equipment or alteration of the building resulting in its improvement. Under section 9, a renovation refund will constitute 20% of a loan spent by an investor but not more than 15% of the entire renovation project. Thermo-modernisation refunds are subject to ceilings of 20% and 16% respectively. The refund payments are to be secured by the State Economy Bank from money allocated to the Thermo-Modernisation and Renovations Fund ( Fundusz Termomodernizacji i Remontów ). 25.     Recently, before the friendly-settlement negotiations had begun, the Government decided to propose their own amendment to the Bill. The amendment will introduce a system of compensatory refunds ( premie kompensacyjne ) available to owners whose property was subject to the rent ‑ control scheme between 12 November 1994 and 25 April 2005 [2] (see also Hutten-Czapska , cited above, §§ 71-72, 136-141 and 194). Given that the final stage of the preparation of the Bill by the Government has been reached and in order to accelerate the process of passing the Bill through Parliament, the Cabinet has decided that the amendment will be proposed once the parliamentary proceedings have started. 26.     The Government produced the text setting out the amendments to be proposed to Parliament. Section 1(13) of the amended Bill reads: “     A dwelling subject to the rent-control scheme is a dwelling within the meaning of [the 2001 Act] in respect of which the lease originated in an administrative decision on allocation to a dwelling or had another legal basis dating back to the time before State management of housing matters or the special lease scheme were introduced in the relevant town, and in respect of which rent was: (a)     controlled; (b)     statutorily limited to 3% of the reconstruction value of the dwelling within 1   year; (c)     statutorily limited in its ... increase to 10% within 1 year during any period between 12 November 1994 and 25 April 2005.” Section 9a reads: “1.     An investor – a physical person who on 25 April 2005 was an owner or heir of an owner of a building in which there was at least one dwelling subject to the rent ‑ control scheme – shall be entitled to a refund hereinafter referred to as a 'compensatory refund'. 2.     A compensatory refund in relation to one building shall be granted only once. 3.     A compensatory refund shall be set aside for paying off a loan granted for carrying out: (1)     a renovation project; or (2)     the renovation of a one-family house if [such a project] concerns the building referred to in subsection 1. 4.     Except for cases defined in subsection 3(2), a compensatory refund shall be granted together with a renovation refund.” Section 9b reads, in so far as relevant, as follows: “1.     ... a compensatory refund shall be equal to the product of the indicator of the costs of the investment and a sum amounting to 2.1% of the conversion index for each square metre of the usable surface of the dwelling subject to the rent-control scheme and for each year in which the limitations referred to in section 2(13) applied in the period from 12 November 1994 to 25 April 2005 or, if the building was not acquired through succession, from the date of acquisition to 25 April 2005. ... 3.     The formula for the calculation of a compensatory refund is set out in the annex to this law.” Under section 16, the State Economy Bank will transfer refunds to the lending bank if the project has been carried out within the time-limit set in the loan agreement. Section 16(3) reads: “   The State Economy Bank shall transfer a compensatory refund [to the lending bank] after the amount of the loan spent [has reached the level of] the renovation refund granted.” Section 17 provides that the State Economy Bank is to keep an electronic database register of buildings in respect of which refunds have been granted. THE LAW I.     THE FRIENDLY-SETTLEMENT AGREEMENT 27.     On 8 February 2008 the parties reached a friendly settlement (see paragraph 6 above). Their agreement, signed by the parties and witnessed by the representatives of the Court's Registry, reads as follows: “FRIENDLY SETTLEMENT IN THE CASE OF Hutten-Czapska v. Poland Application no. 35014/97 The present document sets out the terms of the friendly settlement concluded between the Government of the Republic of Poland ('the Government'), on the one hand, and Mrs Maria Hutten-Czapska ('the applicant'), on the other, collectively referred to as 'the parties', in accordance with Article 38 § 1(b) of the European Convention on Human Rights ('the Convention') and Rule 62 § 1 of the Rules of Court of the European Court of Human Rights ('the Court'); The Government being represented by their Agent, Mr Jakub Wołąsiewicz, Ambassador, of the Ministry of Foreign Affairs and Mr Piotr Styczeń, the Deputy Minister for Infrastructure, the applicant being represented by Mr Bartłomiej Sochański, an advocate practising in Szczecin. I.     PREAMBLE Having regard to (1)     the judgment delivered on 19 June 2006 by the Grand Chamber of the Court in the present case ('the principal judgment'), in which the Court -     found a violation of the right of property protected by Article 1 of Protocol No. 1 to the Convention; -     held that the above violation had originated in a systemic problem connected with the malfunctioning of domestic legislation in that: (a)     it had imposed, and continued to impose, restrictions on landlords' rights, including defective provisions on the determination of rent; (b)     it had not and still did not provide for any procedure or mechanism enabling landlords to recover losses incurred in connection with property maintenance; -     directed that, in order to put an end to the systemic violation identified in the present case, the respondent State must, through appropriate legal and/or other measures, secure in its domestic legal order a mechanism maintaining a fair balance between the interests of landlords and the general interest of the community, in accordance with the standards of protection of property rights under the Convention; -     as regards the award of just satisfaction to the applicant, decided, in respect of any pecuniary damage resulting from the violation found, that the question of the application of Article 41 of the Convention was not ready for decision and reserved it as a whole, and -     awarded the applicant EUR 30,000 (thirty thousand euros) in respect of non ‑ pecuniary damage and EUR 22,500 (twenty-two thousand five hundred euros) in respect of costs and expenses up to that stage of the proceedings before the Court; -     further placed itself at the parties' disposal with a view to securing a friendly settlement in accordance with Article 38 § 1 (b) of the Convention; (2)     the Polish Constitutional Court's recommendations of 29 June 2005 as set out in paragraph 142 of the principal judgment and referred to in paragraph 239 of that judgment, in particular its findings concerning the need for clear statutory elements of rent, for clear criteria in respect of justification for rent increases by landlords, and the need to secure 'decent profit' from rent to landlords; (3)     the Polish Constitutional Court's judgment of 17 May 2006 (no. K 33/05), declaring unconstitutional, inter alia , the 2001 Act's defective provisions on rent increases and further stressing the need for the introduction of clear statutory criteria for elements of rent, for justification for rent increases by landlords and for securing to them the above-mentioned “decent profit” from rent; (4)     the Polish Constitutional Court's judgment of 11 September 2006 (no. P 14/06), declaring unconstitutional certain provisions of the 2001 Act in so far as they limited municipalities' civil liability for damage suffered by landlords on account of their failure to provide entitled tenants with social accommodation following an eviction order; (5)     the Act of 8 December 2006 on financial assistance for social accommodation, protected accommodation, night shelters and houses for the homeless ( ustawa o finansowym wsparciu tworzenia lokali socjalnych, mieszkań chronioninych, noclegowni i domów dla bezdomnych ), whereby the State introduced subsidies for the purpose of securing various forms of accommodation for the less well-off; (6)     the Act of 15 December 2006 on amendments to the 2001 Act on the protection of the rights of tenants, housing resources of municipalities and on amendments to the Civil Code ('the December 2006 Amendment') ( ustawa o zmianie ustawy o ochronie praw lokatorów, mieszkaniowym zasobie gminy i o zmianie Kodeksu cywilnego ), which was enacted with a view to taking account of the findings of the Court's principal judgment as well as the conclusions of the above-mentioned recommendations and judgments by the Constitutional Court, and through which the State introduced provisions enabling landlords to increase rent in order to cover the costs of maintenance of property, to obtain a return on capital investment and to receive 'decent profit'; (7)     the Act of 24 August 2007 on amendments to the 1997 Land Administration Act and certain other statutes ('the August 2007 Amendment') ( ustawa o zmianie ustawy o gospodarce nieruchomościami oraz o zmianie niektórych innych ustaw ), introducing the system of monitoring levels of rent in Poland; (8)     the Government's Bill on Supporting Thermo-Modernisation and Renovations ( rządowy projekt ustawy o wspieraniu termomodernizacji i remontów ) ('the Bill'), aimed at securing to owners partial refunds of loans taken out for the purpose of renovation and/or thermo-modernisation of tenement buildings; the parties, with the assistance of the Court's Registry, have now reached an agreement on the terms of a friendly settlement as follows: II.     GENERAL CONSIDERATIONS 1.     The terms of the following settlement are intended to take into account -     the fact that the restrictions on landlords' rights found by the Court to have been in breach of Article 1 of Protocol No. 1 to the Convention resulted from the difficult housing situation in Poland and the acute shortage of flats available for lease at an affordable level, a state of affairs inherited from the communist regime;   -     the fact that the Polish State's responsibility under the Convention is limited to the operation of the relevant legislation during the period falling within the Court's jurisdiction, which started on 10 October 1994; -     not only the interests of the individual applicant, Mrs Hutten-Czapska, and the prejudice sustained by her as a result of the violation of her right of property found by the Court in this particular case, but also the interests and prejudice of complainants in similar applications pending before the Court or liable to be lodged with it; -     the obligation of the Polish Government under Article 46 of the Convention, in executing the principal judgment, to take not only individual measures of redress in respect of Mrs Hutten-Czapska but also general measures covering other landlords (see the fourth operative provision of the principal judgment). III.     INDIVIDUAL MEASURES 2.     The Government shall pay to the applicant, within 15 (fifteen) days from the date of delivery of the Court's judgment striking the case out of its list of cases under Rule 62 § 3 of the Rules of Court, the lump sum of 262,500 (two hundred and sixty-two thousand five hundred) Polish zlotys (PLN) to a bank account named by her. The amount included therein regarding costs and expenses shall be paid together with any value-added tax that may be chargeable thereon, the remaining amount being free of any tax or charge. 3.     The above lump sum is made up as follows: (a)     an amount of 240,000 (two hundred and forty thousand) Polish zlotys (PLN) representing the entirety of the pecuniary damage suffered by the applicant on account of the operation of the rent-control scheme. The parties, in determining this amount, have been guided by the provisions on renovation and compensatory refunds which are to be available to owners under the provisions of the above-mentioned Bill (see paragraph (1) (b) (8) above). (b)     22,500 (twenty-two thousand five hundred) Polish zlotys (PLN), this sum being exclusive of VAT, for the costs and expenses incurred by her in addition to those covered by the award made in the principal judgment. 4.     In the event of failure to pay the above sum within the said time-limit of 15   (fifteen) days referred to in paragraph 2, the Government undertake to pay until settlement simple interest on the amount at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points. 5.     The applicant accepts that the above payment once received by her shall constitute the full and final settlement of all her claims under her application no.   35014/97 before the Court. 6.     The applicant accordingly (a)     undertakes not to seek any damages from the respondent State in respect of pecuniary and/or non-pecuniary prejudice arising from the facts found by the Court to constitute a violation of Article 1 of Protocol No. 1 to the Convention in the present case; (b)     waives any further claims against the Polish authorities in the Polish civil courts, including claims under the provisions of the Civil Code on the law of tort (Articles 417 et seq.), and any claims that may be brought in relation to those facts before the Court or any other international body; (c)     waives any future claims against the Polish authorities that may arise in connection with the future implementation of the above-mentioned Bill, in particular in respect of renovation, thermo-modernisation and compensatory refunds. IV.     GENERAL MEASURES 7.     The Government shall make, as an integral part of this settlement, the following declaration as to general measures which have been, or are to be, taken in accordance with the terms of the Court's principal judgment. DECLARATION BY THE GOVERNMENT OF THE REPUBLIC OF POLAND Having regard to their obligations under Article 46 of the Convention as to the execution of the Court's principal judgment in the case of Hutten-Czapska v. Poland (application no. 35014/97), in particular those relating to general measures to be adopted in order to secure in the respondent State's domestic legal order a mechanism maintaining a fair balance between the interests of landlords and the general interest of the community, in accordance with the standards of protection of property rights, as indicated in the fourth operative provision of the judgment and explained in paragraph 239 of the judgment, The Government of the Republic of Poland, emphasising that, in execution of the principal judgment, they have already introduced a number of the necessary general measures as indicated in the fourth operative provision of that judgment, in particular: -   they have set up a scheme for State financial assistance as regards investment in social housing and social and protected accommodation; -   they have created, through the enactment of the December 2006 Amendment, conditions enabling landlords to receive market-related rent, including 'decent profit'; -   they have introduced a mechanism for the monitoring of the levels of rent in Poland with a view to facilitating the transparency of rent increases (the so-called 'rent-mirror' ( lustro czynszowe )), DECLARE (a)     that they undertake to continue to implement as soon as possible all the necessary measures in respect of domestic law and practice as indicated by the Court in the fourth operative provision of the principal judgment and that, to this end:   (i)     they will, as rapidly as practicable, submit the above-mentioned Bill to Parliament;   (ii)     they will continue their endeavours -     to introduce new, and to improve the existing, means of promoting investment in housing in relation to both private and State-owned tenement buildings, as well as in social and protected accommodation; -     to secure to landlords, in law and in practice, 'decent profit' from rent, thereby creating conditions for them to be able to receive market-related rent; (b)     that, in addition to adopting general measures designed to execute the principal judgment, the Government recognise their obligation to make available to other persons in a similar situation some form of redress for any damage caused to them by the operation of the impugned rent-control legislation. In this connection, the Government consider that the measures provided for in the above-mentioned Bill will be capable of furnishing appropriate redress. For the Government         For the applicant Jakub Wołąsiewicz           Bartłomiej Sochański [Agent]             [Advocate] Piotr Styczeń [Deputy Minister for Infrastructure] Made in three original copies and witnessed, on behalf of the Registry of the European Court of Human Rights, by Michael O'Boyle           Renata Degener Done in Warsaw, on 8 February 2008.” II.     THE COURT'S ASSESSMENT A.     General rules on striking a case out of the Court's list of cases following a friendly settlement 28.     The Court's power to strike a case out of its list of cases in the event of a friendly settlement is conferred by Article 39 of the Convention, which provides: “If a friendly settlement is effected, the Court shall strike the case out of its list by means of a decision which shall be confined to a brief statement of the facts and of the solution reached.” 29.     The exercise of this power is, however, subject to the conditions set out in Article 37 § 1 and Article 38 § 1(b) of the Convention, which respectively govern the striking out of applications and friendly-settlement proceedings. Article 37 of the Convention reads, in so far as relevant: “1.     The Court may at any stage of the proceedings decide to strike an application out of its list of cases where the circumstances lead to the conclusion that ... (b)     the matter has been resolved; ... ... However, the Court shall continue the examination of the application if respect for human rights as defined in the Convention and the Protocols thereto so requires.” Article 38 reads, in so far as relevant: “1.     If the Court declares the application admissible, it shall ... (b)     place itself at the disposal of the parties concerned with a view to securing a friendly settlement of the matter on the basis of respect for human rights as defined in the Convention and the Protocols thereto.” 30.     Accordingly, the Court may strike an application out of its list only if it is satisfied that the solution of the matter embodied in the settlement arrived at between the parties is based on “respect for human rights as defined in the Convention and the Protocols thereto”. This requirement is incorporated in Rule 62 § 3 of the Rules of Court, which provides: “If the Chamber is informed by the Registrar that the parties have agreed to a friendly settlement, it shall, after verifying that the settlement has been reached on the basis of respect for human rights as defined in the Convention and the Protocols thereto, strike the case out of the Court's list in accordance with Rule 43 § 3.” Rule 43 § 3 specifies that “the decision to strike out an application which has been declared admissible” – as in the present case – “shall be given in the form of a judgment” (see also Broniowski v Poland (friendly settlement)