The European Court has found a breach of the Convention for the Protection of Human Rights and Fundamental Freedoms, in a case revolving around an old Maltese rent law.
The case originated in an application against the Republic of Malta lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms by three Maltese nationals, Franco Buttigieg, Maria Borg Costanzi and Alessandra Kirkpatrick.
The applicants were represented by lawyers Michael Camilleri and Edward Debono. The Maltese Government was represented by their Attorney General Peter Grech. The case revolved around an apartment.
Initially, the apartment belonged to the applicants' late father and his brothers. On 4 August 1981, the late father of the applicants and his brothers entered into a contract granting a temporary emphyteusis for seventeen years to a couple. The seventeen year temporary emphyteusis was to commence on 12 August 1981 and the ground rent to be paid was set at 120 Maltese liri (MTL) (around 280 euros (EUR)) annually, the EU court judgement read.
In 1988, one of the co-owners had taken legal action to collect arrears of ground rent for eleven years and to evict the couple. By a judgment of the Court of Appeal (civil jurisdiction) of 27 May 1992, the couple was ordered to pay the arrears; however, the court did not order their eviction.
"According to the applicants, in 1992, their late father had entered into negotiations with the couple, in order to reach a new lease agreement and increase the rent. The couple did not accept the terms of the new lease and did not pay outstanding arrears, the court heard. On 17 October 1994, a deed of partition was signed by the siblings and the apartment in question was assigned in its entirety to the late father of the applicants. On 11 August 1998 the temporary emphyteusis came to an end. Nevertheless, the couple continued to occupy the apartment by title of lease since the law (the Housing (Decontrol) Ordinance as amended by Act XXII of 1979) provided for the conversion of a temporary emphyteusis into a lease, irrespective of the owners' consent. "As a result, the couple could in practice reside indefinitely in the applicants' premises. The rent established at the time, calculated in accordance with the law, was MTL 170.70 (around EUR 397.62) annually and was to be revised every fifteen years. The next revision of the rent was scheduled for 2013 and the rent then would be EUR 568.06. 13."
"Neither the applicants, nor their late father ever accepted any rent paid by the couple. on the following grounds: the rent due as calculated according to the law was far less than the rental market value of the apartment; the law in question (Article 12 of the Housing (Decontrol) Ordinance) was in breach of their rights as stipulated in the Convention; the conditions imposed by the Housing (Decontrol) Ordinance were disproportionate and did not pursue a legitimate aim; the owners were being denied enjoyment of their own property; and structural changes had been made to the premises without the applicants' late father's permission (or of any of his brothers)."
"According to a report of an ex-parte architect drawn up on 25 January 2011, the market value of the apartment at the time was that of EUR 125,000"
The EU Court judgement reads: "On 29 January 2014, the Civil Court (First Hall), in its constitutional competence, found against the applicants, dismissed their claims and ordered them to pay the expenses of the proceedings. On 31 January 2014, the applicants appealed the decision. On 6 February 2015, the Constitutional Court dismissed the applicants' appeal and upheld the decision of the first-instance court. "
The applicants, before the EU Court, complained that their property rights were being infringed as a result of the law which imposed upon them a unilateral lease relationship for an indeterminate time without reflecting a fair and adequate rent in violation of the Convention 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."
The applicants submitted that by virtue of the law, that the couple obtained the right to continue occupying the premises by title of lease. "Thus, the law imposed a unilateral relationship allowing the tenants to indefinitely reside in the applicants' property. In their view, the law was neither precise nor foreseeable and no procedural safeguards were in place to ensure the balance of interests between those of the tenants and the applicants as owners."
"Moreover, the rent was extremely low. In this connection the applicants specified that this became the case after the expiry of the lease, that is, after 1998. They noted that the court-appointed expert considered that the property in 1998 had a rental value of EUR 2,100 annually, while in 2012 it had a rental value of EUR 3,500 annually. During such time the rent according to law to which the applicants were entitled to was EUR 397.62 annually. The maximum rent they could hope to attain after the revision applicable in 2013 was EUR 568.06 annually, which in no way reflected the real rental value of the property in a prominent street in the capital city of the country.""
The Court held that there was a violation of Article 1 of Protocol No. 1 to the Convention.
It ordered the state to pay the applicants, within three months the following amounts: (i) EUR 22,000, jointly, in respect of pecuniary damage; (ii) EUR 4,500 jointly, plus any tax that may be chargeable, in respect of non-pecuniary damage; (iii) EUR 9,000, jointly, plus any tax that may be chargeable to the applicants, in respect of costs and expenses.
The full judgement can be found here