Strasbourg Court judgment on rent-controlled leases
Court of Human Rights says pre-1995 housing leases and low rent are ‘excessive’ burdens on landlords
Matthew Vella
The European Court of Human Rights has ordered the government to pay Philip Amato Gauci, the sum of €15,025 in damages over the breach of his right to property.
The case concerns Amato Gauci’s nine-year saga to reclaim a property rented on a 25-year emphyteusis, which was later converted to a lease agreement due to a change in the law in 1979.
The Strasbourg court also ordered the government to pay, within three months, €5,000 in respect of non-pecuniary damages and costs and expenses.
The applicant was represented by Dr Ian Refalo and Dr Therese Commodini Cachia.
Amato Gauci is the owner of a maisonette in Sliema. In 1975, his father rented the property for a temporary emphyteusis of Lm90 (€210) rent annually, for a 25-year period.
In 2000, when the emphyteusis expired, Amato Gauci informed the tenants he would not renew the contract. The tenants invoked a 1979 law that granted them the right to retain possession of the premises under a lease, without the consent of the owner.
Amato Gauci instituted proceedings before the Rent Regulation Board, to have a fair amount of rent fixed. The maximum compensation the applicant could be offered by the RRB in accordance with the law, was Lm180 (€420) per year.
He filed a constitutional case, claiming the lease had been imposed upon him infringed his rights to enjoy his property. The Civil Court turned down his claim, saying the case was not one of deprivation of property but rather of control of use.
In 2006, the Constitutional Court rejected his appeal, saying the interference suffered by Amato Gauci constituted control of the use of property, which had been legitimate and in the general interest. The Court argued that in view of the housing situation in Malta, the new law was meant to protect persons occupying premises as their ordinary residence for a certain period of time from being evicted.
In his application to the Strasbourg court, Amato Gauci complained that his property rights were being infringed as a result of the law, which imposed on him a unilateral lease relationship for an indeterminate time without reflecting a fair and adequate rent.
The Court said that according to an architect’s valuation made in 2002, the lease value of the premises was Lm120 (€280) per month. It said that the maximum Lm180 rent allowed by law was just 12.5% of the real value and that this “illusory compensation would be of more concern with the passage of time, since the lease was of indefinite duration… notwithstanding the State’s margin of appreciation, the applicant had been made to bear an excessive burden which was disproportionate to the general interest pursued.”
The Court said that Amato Gauci’s state of uncertainty as to whether he would ever recover his property, the lack of procedural safeguards in the application of the law and the rise in the standard of living in Malta over the past decades, had imposed a disproportionate and excessive burden upon him.
“The latter was requested to bear most of the social and financial costs of supplying housing accommodation… It follows that the Maltese State failed to strike the requisite fair balance between the general interests of the community and the protection of the applicant’s right of property.”
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