THIRD SECTION

DECISION

Application no. 62864/09 Tibor ME Č IAR and Others against Slovakia

The European Court of Human Rights (Third Section) , sitting on 21 February 2012 as a Chamber composed of:

Josep Casadevall , President , Corneliu Bîrsan , Alvina Gyulumyan , Egbert Myjer , Ján Šikuta , Luis López Guerra , Mihai Poalelungi , judges , and Santiago Quesada , Section Registrar ,

Having regard to the above application lodged on 6 November 2009 ,

Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicants ,

Having noted that the Governments of Belgium , Poland and Switzerland , whose nationals are some of the applicants , do not wish to intervene in the case as a third party ,

Having deliberated , decides as follows:

THE FACTS

1 . The applicants are twenty-three natural or legal persons whose particulars appear in Appendix 1. They were represented before the Court by Mr J. Brichta , a lawyer practising in Bratislava , and Mr M. Siman of EL Partners , s.r.o . in Bratislava . The Government of the Slovak Republic (“the Government”) were represented by their Agent , M s M. Piro šíková .

A. The circumstances of the case

The facts of the case , as submitted by the parties , may be summarised as follows.

1. Background information on rent control

2 . 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.

3 . 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 hous ing were subjected to restrictions in the exercise of their property rights.

4 . As regards flats in resident ial houses , tenancy was replace d by the “right of lasting use”.

5 . 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.

6 . After 1991 some residential houses were restored to their former owners ; however , flats in these houses were mostly occupied by tenants with regulated rent.

7 . 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 tenant s while charging no more than the maximum amount of rent fixed by the State (“the rent-control scheme”). Despite repeated increase s in the maximum rent which the domestic law entitle s house owners in this position to charge , th at amount has remained below the level of rent in similar housing premises which are let on the principles of a free-market economy.

8 . In situation s similar to that of the applicants , the owners of residential houses had practically no legal possibility to terminate tenanc ies 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.

9 . The Government of the Slovak Republic have dealt with the issue of rent control on several occasions ( see also paragraphs 1 7 – 20 below ) .

10 . D ocuments 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 envisage d 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 situatio n. 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 . The applicants are owners of residential buildings in different parts of Bratislava and in Košice to which the rent-control scheme applies (see Appendix 2). They submitted , with reference to the applicable law , that the rent to which they are entitled for letting their property is far below the maintenance costs for their houses and disproportionately low compared with similar flats to which the rent-control scheme does not apply. By way of example , they pointed out that the controlled rent in respect of a flat with a surface area of 72.56 square metres has been EUR 71.5 a month , which corresponds to EUR 0.99 per square metre. However , the free-market rent in respect of such a flat was approximately EUR 830 a month , that is EUR 11.4 per square metre.

13 . The applicants further relied on the opinion of an expert elaborated at their request on 19 July 2010. It sets out the difference between the free ‑ market rent and controlled rent in respect of a residential house located at Tren čianska street in Bratislava - Nivy during the period from 1993 to 2010 (for further details see Appendix 3).

14 . The Government were in disagreement with the figures put forward by the applicants. They submitted the opinion of a different expert according to which average free-market rent per square metre for comparable flats in the different areas concerned was within the following range depending on the number of rooms (sums indicated in euros ):

Bratislava-Staré mesto: 6.13 – 6.48;

Bratislava-Nivy : 4.72 – 5.35;

Bratislava-Nové mesto : 4 . 1 8 – 5.06;

Bratislava-D úbravka : 3.5 7 - 4. 50 ;

Ko šice -Star é mesto : 3.14 - 3.55.

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 , t he Act on Termination and Settlement of Certain Apartment Tenancy Contracts (Law n o. 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 th ose cases , landlord s 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 ‑ m arket rent and regulated rent.

COMPLAINTS

21 . The applicant s 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 also complained that they had no effective domestic remedy at their disposal as required by Article 13 of the Convention in respect of the above complaint.

23 . Finally , the applicants complained that they were discriminated against in comparison with the owners of similar housing facilities to whom the rent-control scheme does not apply.

THE LAW

A. Article 1 of Protocol No. 1

24 . The applicant s complained that they were restricted in enjoying their property as a result of the rent-control scheme. They a lleged 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

25 . 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 accessib ility and cl arity , and the effects of which were sufficiently foreseeable .

26 . 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 s pheres such as housing , as a prime social need , often call ed for some form of regulation by the S tate.

27 . 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 S tate found a means of gradually resolving t he 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.

28 . The Government further pointed to the fact that m any of the tenants were elderly and that the municipalities concerned did not have enough housing stock for those socially depend ent on regulated rent schemes .

29 . With respect to the amount of rent chargeable under the rent - control scheme , maintenance costs would also have had to be borne by owners if their flat s had not been rented out at all. Thus , the amount of rent and the alleged ly higher costs of maintaining the property could not automatically be associated.

30 . The applicants had failed to submit detailed calculations of the maintenance and other costs during the relevant period. The Government objected to the applicants ’ estimation of the amount of rent they could have obtained had the rent-control scheme not applied to the flats in their houses.

31 . 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”.

32 . 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

33 . The applicants allege d that the interference with their ownership rights was contrary to Article 1 of Protocol No. 1. In particular , the limitations imposed on the use of their property and their nearly twenty-year duration were excessive. A disproportionate burden had been thereby i mposed on the applicants for which there exist ed no relevant justification.

34 . The aim pursued , namely to ensure housing for persons in need , could have been achieved by different means , such as providing housing allowances for those persons. Continued implementation of the rent-control scheme ran contrary to the general interest , as it hampered the development of a free market in the area of rental housing including appropriate maintenance of the existing housing facilities and the construction of new ones.

35 . Despite several increases in the maximum rent permissible under the rent-control scheme , the controlled rent corresponded to some 10 to 20% of free-market rent during the period from 1993 to 2010. The amounts in issue did not even suffice to cover the maintenance costs inherently associated with the houses to which the rent-control scheme applied. The figures put forward by the Government did not allow a different conclusion to be reached. Furthermore , the amendments as regards the maximum controlled rent did not automatically entitle the applicants to charge the tenants corresponding amounts as , in accordance with domestic courts ’ practice , any increase of rent had to be subject to an agreement between landlords and tenants.

2. The Court ’ s assessment

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.

B. Article 13 of the Convention taken together with Article 1 of Protocol No. 1

37 . The applicants further complained that they had no effective remedy available as regards their complaint under Article 1 of Protocol No. 1. They alleged a breach of Article 13 of the Convention , which provides:

“Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.”

38 . The G overnment stated that the alleged breach resulted from the relevant law as it stood.

39 . It has been confirmed by the Constitutional Court , and it has not been disputed between the parties , that the alleged breach of Article 1 of Protocol No. 1 stemmed from the leg al framework governing the rent ‑ control scheme in Slovakia .

40 . In this respect the Court reiterates that Article 13 cannot be interpreted as requiring a remedy against the state of domestic law (see Iordachi and Others v. Moldova , no. 25198/02 , § 56 , 10February 2009 , or Leander v. Sweden , 26 March 1987 , § 77(d) , Series A no. 116 ) .

41 . It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

C. Article 14 of the Convention taken together with Article 1 of Protocol No. 1

42 . The applicants maintained that the re strictions imposed by the rent ‑ control scheme amounted to discrimin atory treatment. They alleged a breach of 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.”

43 . 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.

44 . The applicants disagreed. They argued that the Constitution guaranteed equal rights and protection to all owners. The mere fact that the property was restored to the applicants by the State did not imply that their position was different from other house owners and it did not justify their different treatment as to the scope of their ownership rights.

45 . 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.

For these reasons , the Court unanimously

Declares admissible , without prejudging the merits , the applicant s ’ complaint under Article 1 of Protocol No. 1 , 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;

Declares inadmissible the remainder of the application.

Santiago Quesada Josep Casadevall              Registrar              President

Appendix 1

List of applicants

1. Mr Tibor Mečiar , who was born in 1939 and lives in Bratislava .

2. Mr Vladimír Kalvoda , who was born in 1943 and lives in Bratislava .

3. Ms Adriana Kalvodová , who was born in 1945 and lives in Bratislava .

4. Mr Eberhard Borsig , who was born in 1936 and lives in Bratislava .

5. Ms Mária Borsigová , who was born in 1941 and lives in Bratislava .

6. Mr Richard Kalmár , who was born in 1969 and lives in Bratislava .

7. Mr Rudolf Kapráľ , who was born in 1944 and lives in Bratislava .

8. Ms Emília Kapráľová , who was born in 1945 and lives in Bratislava .

9. Mr Zoltán Holocsy , who was born in 1963 and lives in Bratislava .

10. Mr Miroslav Kubeš , who was born in 1960 and lives in Bratislava .

11. Mr Marián Kubeš , who was born in 1953 and lives in Bratislava.

12. Mr Rudolf Krchniak , who was born in 1956 and lives in Bratislava.

13. Mr Vladimír Šindelár , who was born in 1929 and lives in Bratislava.

14. Ms Krystyna Å indelárová , who was born in 1944 and lives in              Bratislava.

15. Mr Ján Godáň , who was born in 1944 and lives in Bratislava.

16. Habitat , spol. s r.o. , a limited liability company with its registered              office in Bratislava , represented by Mr T. Weis .

17. Mr Vlastimil Kátlovský , who was born in 1939 and lives in Brezová.

18. Mr Ctibor Michalovský , who was born in 1948 and lives in Košice.

19. Mr Miloš Taranza , who was born in 1952 and lives in Bratislava.

20. Lybed , s.r.o. , a limited liability company with its registered office in              Bratislava , represented b y Mr S. ÄŒermák .

21. Mr Zdenko Pinkava , who was born in 1941 and lives in Bratislava.

22. Ms Oľga Gašparíková , who was born in 1951 and lives in Bratislava.

23. Cirkevný zbor reformovanej kresÅ¥anskej cirkvi na Slovensku ,              a religious association with its registered seat in Bratislava ,              represented by Mr I. Peres .

The applicants who are natural persons are Slovak nationals with the exception of Ms K. Šindelárová who is a Polish national. Mr J. God áň is also a national of Swit zerland and Belgium .

Appendix 2

Residential houses owned by the applicants

Applicant

Residential house address

Land Registry

Entry

1.Mečiar Tibor

Panen ská 6 , Bratislava

905

2.Kalvoda Vladimír

Vysoká 25 , Bratislava

4125

3.Kalvodová Adriana

Vysoká 25 , Bratislava

4125

4.Borsig Eberhard

Vysoká 25 , Bratislava

4125

5.Borsigová Mária

Vysoká 25 , Bratislava

4125

6.Kalmár Richard

Mýtna 39 , Bratislava

4494

7.Kapráľ Rudolf

Kvačalova 23 , Bratislava

1360

8.Kapráľová Emília

Kvačalova 23 , Bratislava

1360

9.Holocsy Zoltán

Kvačalova 23 , Bratislava

1360

10.Kubeš Miroslav

Banskobystrická 16 ,

Bratislava

1129

11.Kubeš Marián

Banskobystrická 16 ,

Bratislava

1129

12.Krchniak Rudolf

Moskovská 16 , Bratislava

4201Sasinkova 19 , Bratislava

4201

13.Šindelár Vladimír

Mudroňova 33 , Bratislava

4598

14.Šindelárova Krystyna

Mudroňova 33 , Bratislava

4598

15.Godáň Ján

Mudroňova 33 , Bratislava

4598

16.HABITAT , spol . s r.o .

Saratovská 4 , Bratislava

2407

17.Kátlovský Vlastimil

Blumentálska 6 , Bratislava

4294

18.Michalovský Ctibor

Masarykova 12 , Košice

11703

19.Taranza Miloš

Francisciho 11 , Bratislava

4451

20.Lybed , s.r.o .

Česká 100/9 , Bratislava

2019

21.Pinkava Zdenko

Šancová 2 , Bratislava

4287

22.Gašparíková Oľga

Medená 35 , Bratislava

212

23.Cirkevný zbor reformovanej kresťanskej cirkvi na Slovensku

Obchodná 12 , Bratislava

3675Appendix 3

Difference between the free-market rent and controlled rent as established by an expert at the applicants ’ request

Period

Free-market rent

(monthly price in euros for square metre)

Controlled rent

(monthly price in euros for square metre)

1993

3.18

0.06

1994

4.18

0.06

1995

4.72

0.06

1996

4.9

0.06

1997

4.75

0.06

1998

5.14

0.06

1999

5.9

0.06

2000

6.78

0.2

Until 31 January 2001

7.61

0.2

As from 1 February 2001

7.61

0.28

2002

7.6

0.28

Until 28 February 2003

7.4

0.28

As from 1 March 2003

7.4

0.54

Until 9 January 2004

8.12

0.54

As from 10 January 2004

8.12

0.86

2005

7.2

0.86

2006

6.98

0.86

2007

9.02

0.86

Until 30 April 2008

9.07

0.86

As from 1 May 2008

9.07

0.86

2009

7.02

0.86

2010

5.99

0.86