CEDH · CASELAW;DECISIONS;ADMISSIBILITY;ENG — 4 janvier 2012

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They were represented before the Court by Mr P. Čavojský, a   lawyer practising in Bratislava. The Government of the Slovak Republic (“the Government”) were represented by their Agent, Ms M. Pirošíková. A.     The circumstances of the case 2.     The facts of the case, as submitted by the parties, may be summarised as follows. 1.     Background information on rent control 3.     After 1948, when the communist regime had been installed in the former Czechoslovakia, the housing policy was based on a doctrine aimed at the restriction and abolition of private ownership. 4.     Some residential houses were confiscated and some owners of residential houses were compelled to transfer their property to the State for no or inadequate compensation. Those owners who were not formally deprived of the ownership of their residential housing were subjected to restrictions in the exercise of their property rights. 5.     As regards flats in residential houses, tenancy was replaced by the “right of lasting use”. 6.     The Flats Management Act 1964, which was in force until 1   January   1992, entitled public authorities to decide on the right of use of flats. Special regulations governed the sums which the users had to pay. On   1 January 1992 “the right of lasting use” was transformed into a tenancy with regulated rent. 7.     After 1991 some residential houses were restored to their former owners; however, flats in these houses were mostly occupied by tenants with regulated rent. 8.     Under the relevant law (for details see “Relevant domestic law and practice” below), owners of residential houses in a position similar to that of the applicants in the present case have been obliged to accept that all or some of their flats are occupied by tenants while charging no more than the maximum amount of rent fixed by the State (“the rent-control scheme”). Despite repeated increases in the maximum rent which the domestic law entitles house owners in this position to charge, that amount has remained below the level of rent in similar housing premises which are let on the principles of a free-market economy. 9.     In situations similar to that of the applicants, the owners of residential houses had practically no legal possibility to terminate tenancies and evict tenants without providing them with “housing compensation”. Furthermore, owners were not allowed to transfer ownership of a flat leased by an individual to any third person other than a tenant. 10.     Documents of the Ministry of Construction and Regional Development indicate that registration forms have been submitted by tenants in respect of 923 flats where rent control is applied. 2,311 persons have lived in those flats, the average surface area of which is 71.38 square metres. The documents indicate that it is envisaged that substitute accommodation will be made available to the persons concerned by the planned reform to the extent that this is justified by their social situation. 76.5% of the tenants thus registered lived in flats located in Bratislava. 11.     On the basis of those data, the authorities have estimated that the rent-control scheme currently concerns approximately 1,000 flats, that is, 0.24% of rental flats in houses that existed in 1991 and 0.06% of the inhabited housing facilities which were available in Slovakia in 2001. 2.     Particular circumstances of the applicants’ case 12.     On 23 November 1992 a house situated in Bratislava-Staré Mesto was restored to the applicants under the Extra-Judicial Rehabilitations Act 1991. The house comprises four flats and the rent-control scheme applies in respect of three of them. The flats have a surface area of between 77 and 98 square metres. The monthly rent which the applicants currently obtain in respect of the smaller flat amounts to EUR 76. In respect of the two bigger flats the regulated rent has been EUR 84 a month. 13.     The applicants maintained that the average rent for comparable flats in similar locations was EUR 956 a month. 14.     The Government were in disagreement with the market price put forward by the applicants. They relied on the opinion of an expert indicating that the average market price for the lease of comparable flats in the Bratislava- Staré Mesto municipality was between EUR 6.134 and EUR   6.476 per square metre depending on the number of rooms. The   regulated rent per square metre in the flats owned by the applicants was between EUR 0.86 and EUR 0.99. B.     Relevant domestic law and practice 15.     Pursuant to Article 20 § 1 of the Constitution, the ownership right of all persons has the same legal content and it enjoys the same protection. 16.     Article 124 of the Civil Code guarantees the same rights and obligations to all owners. Equal legal protection is to be provided to all owners. 17.     A recapitulation of the relevant domestic law and practice concerning the rent-control scheme is set out in Krahulec v. Slovakia (dec.), no. 19294/07, 7 June 2011). 18.     In addition, on 15 September 2011, the Act on Termination and Settlement of Certain Apartment Tenancy Contracts (Law no. 260/2011) came into effect. It was adopted with a view to eliminating rent payment restrictions concerning individual owners. 19.     Its provisions are applicable, in particular, to apartments of   individuals whose rent has so far been regulated. In those cases, landlords are entitled to terminate a tenancy contract by 31 March 2012. Such termination of tenancy is to take effect after a twelve-month notice period. However, if a tenant is exposed to material hardship, he or she will be able to continue to use the apartment with regulated rent, even after the contract termination, until a new tenancy contract with a municipality has been set up. Law no. 260/2011 further entitles landlords to increase rent by 20% once a year until 2015. 20.     Municipalities are obliged to provide a person exposed to material hardship with lease of a municipal apartment with regulated rent. If   a   municipality does not comply with that obligation until 31   December   2016 in a particular case, the landlord can claim the difference between the free ‑ market rent and regulated rent. COMPLAINTS   21.     The applicants complained that their rights under Article 1 of Protocol No. 1 had been violated as a result of the implementation of the rules governing rent control in respect of their property. 22.     The applicants further complained that the restrictions imposed by the rent-control scheme amounted to discrimination in the enjoyment of their right to peacefully enjoy their possessions. They alleged, in substance, a breach of Article 14 of the Convention in conjunction with Article 1 of Protocol No. 1. THE LAW A.     Article 1 of Protocol No. 1 23.     The applicants complained that they were restricted in enjoying their property as a result of the rent-control scheme. They alleged a breach of Article 1 of Protocol No. 1, which reads as follows: “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. 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.” 1.     Arguments of the parties (a)     The Government 24.     The Government admitted that the rent-control scheme had resulted in a   limitation on the use of the applicant’s property. Such a measure was in accordance with the relevant domestic law, which met the requirements of accessibility and clarity, and the effects of which were sufficiently foreseeable. 25.     The interference pursued a legitimate aim, namely, to protect tenants against unaffordable increases in rent. The Government argued that the national authorities in principle had more direct knowledge of the general interest and that spheres such as housing, as a prime social need, often called for some form of regulation by the State. 26.     As to the requirement of proportionality, the Government maintained that a swift deregulation of rent would have had unfavourable social implications, and that therefore the rights of tenants which had been established in the earlier non-market environment had to be protected while the State found a means of gradually resolving the issue. The rent-control scheme was therefore compatible with the general interest within the meaning of Article   1 of Protocol No. 1. There had been several increases in permissible rent levels and other measures had been taken with a view to resolving the issue. 27.     The Government further pointed to the fact that many of the tenants were elderly and that the municipalities concerned did not have enough housing stock for those socially dependent on regulated rent schemes. 28.     Since the rent-control scheme currently affected only about 1,000   dwellings, amounting to 0.06% of the overall number of permanently inhabited housing facilities, it was questionable whether the situation in question was “systemic”. 29.     The Government concluded that the rent-control scheme met the general interest of society and was compatible with the interests of house and flat owners, as the maximum level of rent chargeable had been regularly increased and the number of houses to which the rent-control scheme would be applicable after 2011 had been reduced, while a legal framework for ending the rent-control system was devised. (b)     The applicants 30.     The applicants alleged that the interference with their right to peaceful enjoyment of their property imposed a disproportionate burden on them, for which there existed no relevant justification. 31.     In particular, the applicants argued that the extent of the limitations imposed on the use of their property and their duration were excessive and could not be considered as necessary. The figures put forward by the Government indicated that the number of persons in respect of whom the rent-control scheme applied was relatively low. The need for ensuring appropriate housing conditions for them by means of rent control at the expense of the house owners could not, therefore, be considered as corresponding to a pressing public interest. Nothing showed that providing the house owners with appropriate compensation would jeopardise the State’s economic situation. 2.     The Court’s assessment 32.     The Court considers, in the light of the parties’ submissions, that the complaint raises serious issues of fact and law under the Convention, the determination of which requires an examination of the merits. The Court concludes therefore that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 of the Convention. No other ground for declaring it inadmissible has been established. It must therefore be declared admissible. B.     Article 14 of the Convention taken together with Article 1 of Protocol No. 1 33.     The applicants maintained that the restrictions imposed by the rent ‑ control scheme amounted to discriminatory treatment. The Court considers it appropriate to examine this complaint under Article 14 of the Convention in conjunction with Article 1 of Protocol No. 1. Article 14 reads: “The enjoyment of the rights and freedoms set forth in [the] Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a   national minority, property, birth or other status.” 34.     The Government argued that the applicants’ situation was not relevantly similar to that of other house owners to whose property the rent ‑ control scheme did not apply. In particular, persons like the applicants, to whom the houses had been restored at the beginning of the 1990s, had been aware that the persons living in the flats concerned would retain the right to use them. Unlike in the case of publicly owned flats, those inhabitants had had no right of purchasing the flats in houses which had been restored to the original owners. There was therefore a requirement to provide legal protection to those persons by means of the rent-control scheme. 35.     The applicants disagreed. They argued that the Constitution and the Civil Code guaranteed equal rights and protection to all owners. The mere fact that the property was restored to the applicants by the State did not justify their different treatment as to the scope to which they could enjoy their property. 36.     The Court considers, in the light of the parties’ submissions, that the complaint raises serious issues of fact and law under the Convention, the determination of which requires an examination of the merits. The Court concludes therefore that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 of the Convention. No other ground for declaring it inadmissible has been established. It must therefore be declared admissible. C.     Article 13 of the Convention 37.     Upon communication of the application to the Government the Court decided, of its own motion, to put a question as to whether the applicants had an effective remedy at their disposal as required by Article 13 of the Convention. 38.     Since the applicants made no comment on that question in their observations, the Court considers that no further examination of this issue is called for. For these reasons, the Court unanimously Declares admissible, without prejudging the merits, the applicants’ complaint under Article 1 of Protocol No. 1, both taken alone and in conjunction with Article 14 of the Convention, concerning the restrictions which the rent-control scheme has imposed on their right to peacefully enjoy their possessions; Decides that it is no longer required to examine whether the facts of the case amount to a breach of Article 13 of the Convention.   Santiago Quesada   Josep Casadevall   Registrar   President