Communicated on 17 April 2015

FIRST SECTION

Application no. 37006/13 Gojko GOŠOVIĆ against Croatia lodged on 22 May 2013

STATEMENT OF FACTS

The applicant, Mr Gojko Gošović , is a Croatian national, who was born in 1963 and lives in Split. He is represented before the Court by Ms J. Ćurković Gošović , an advocate practising in Split.

A. The circumstances of the case

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

The applicant is the owner of a flat in Split with a surface area of 106.90 square metres. According to the applicant, that flat is the only real estate in his ownership and his only property of value.

It would appear that in 1971 the housing authorities awarded a specially protected tenancy ( stanarsko pravo ) of the flat to a certain Ms N.R. and her family.

On 5 November 1996 the Lease of Flats Act entered into force. It abolished the legal concept of the specially protected tenancy and provided that the holders of such tenancies in respect of, inter alia , privately owned flats were to become “protected lessees” ( zaštićeni najmoprimci ). Under the Act such lessees are subject to a number of protective measures, such as the duty of landlords to contract a lease of indefinite duration, payment of protected rent ( zaštićena najamnina ), the amount of which is set by the Government and significantly lower than the market rent; and better protection against termination of the lease.

The applicant refused to conclude a lease contract with N.R. under the protected lease scheme.

Therefore, on 16 October 1997 she brought a civil action against him in the Split Municipal Court ( Općinski sud u Splitu ) with a view to obtaining a judgment in lieu of such a contract. She relied on section 33(3) of the Lease of Flats Act.

At the hearing held on 4 November 1998 the applicant argued, relying on section 31(2) of the same Act, that N.R. was not entitled to protected rent because she owned a house in the tourist village of Rogoznica , some 53 kilometres from Split.

At the hearing held on 15 April 2002 the applicant submitted a counter-claim seeking to obtain a judgment ordering N.R. and her family to vacate the flat in question. Relying on section 40(1) of the Lease of Flats Act, he argued that he intended to move into the flat.

By a judgment of 27 February 2008 the Municipal Court found in favour of N.R. and imposed on the applicant a lease contract stipulating protected rent in the amount of 163.56 Croatian kunas (HRK) per month.

On 21 October 2008 the Split County Court ( Županijski sud u Splitu ) dismissed an appeal by the applicant and upheld the first-instance judgment.

Ordinary courts established that N.R. was living in the flat with her son M.R., her daughter-in-law and her grandson whereas the applicant was living with his mother in a flat located in the same building. His mother also owned an adjacent building where he was running his medical practice in one of the flats. The court also found that that N.R. and her son M.R. indeed owned a small summer home in Rogoznica surfacing 18 square metres only.

Against this factual background the ordinary courts held that the conditions provided in section 40(1) of the Lease of Flats Act, as interpreted by the Supreme Court, had not been met and that the applicant was therefore not entitled to refuse to enter into a lease contract with N.R. under the protected lease scheme. In particular, even though the applicant intended to move into the flat and had no other accommodation, he was neither entitled to permanent social assistance or over sixty years of age, nor was N.R. ’ s summer home in Rogoznica located in the same municipality or township.

Those courts also held that, apart from being protected from eviction, N.R. was also entitled to protected rent; the applicant thus having no right to charge her the market rent for living in his flat. That was so because they found that N.R. ’ s summer home did not constitute a habitable house within the meaning of section 31(2) of the Lease of Flats Act.

By a decision of 21 November 2012 the Constitutional Court ( Ustavni sud Republike Hrvatske ) dismissed the applicant ’ s constitutional complaint against the judgments of the ordinary courts, and served its decision on the applicant ’ s representative on 7 December 2012.

B. Relevant domestic law and practice

1. The Lease of Flats Act

The Lease of Flats Act ( Zakon o najmu stanova , Official Gazette no. 91/1996 of 28 October 1996), which entered into force on 5 November 1996, regulates the legal relationship between landlord and lessee with regard to the lease of flats.

(a) Provisions relating to ordinary lease

According to section 6 the rent paid for the use of a flat may be either the protected rent or freely negotiated rent (that is, the market rent).

Pursuant to section 21 a landlord may terminate a lease of indefinite duration, inter alia , if he or she intends to move into the flat or install his or her children, parents or dependants in it.

(b) Provisions relating to protected lease

Transitional provisions (sections 30-49) of the Lease of Flats Act establish a special category of lessees (“protected lessees” – zaštićeni najmoprimci ), namely, those who were previously holders of specially protected tenancies in respect of privately owned flats or those who did not purchase their flats under the Specially Protected Tenancies (Sale to Occupier) Act. Such lessees are subject to a number of protective measures, such as the obligation of landlords to contract a lease of indefinite duration; payment of protected rent ( zaštićena najamnina ), the amount of which is set by the Government; and a limited list of grounds for termination of the lease. The provisions of the Lease of Flats Act relating to ordinary lease apply to protected lease unless the provisions relating to protected lease provide otherwise.

By section 30 of the Act the still existing specially protected tenancies (see paragraph 30 above) were abolished and holders of such tenancies became protected lessees as of its coming into force.

Section 31(1) provides that the owner of the flat and the former holder of a specially protected tenancy in respect of the same flat shall enter into a lease contract of indefinite duration where the lessee shall have the right to protected rent. Section 31(2) states that the protected lessee does not have the right to protected rent if he or she runs a business in a part of the flat or owns a habitable house or flat.

According to section 33(2) the lessee has to submit a request for the conclusion of a lease contract stipulating protected rent to the landlord within six months from the Act ’ s entry into force or from the day on which the decision determining the right of that person to use the flat becomes final.

Section 33(3) states that if the landlord does not enter or refuses to enter into a lease contract stipulating protected rent within three months of the receipt of the lessee ’ s request, the lessee can bring an action in the competent court with a view to obtaining a judgment in lieu of the lease contract.

The grounds for termination by a landlord of the lease of a flat to a protected lessee are set out in section 40 of the Lease of Flats Act, which reads as follows:

“(1) Apart from the grounds stipulated in section 19 of this Act, a landlord may terminate the lease of a flat to a protected lessee, on the grounds:

- provided for in section 21(1) of this Act,

- if he or she does not have other accommodation for himself or herself and for his or her family, and is [either] entitled to permanent social assistance on the basis of the special legislation or is over sixty years of age.

(2) [ Invalidated by the Constitutional Court as unconstitutional by a decision of 31 March 1998. ]

(3) In the case referred to in paragraph 1, second sub-paragraph, of this section the local government ... shall provide the protected lessee with another suitable flat [in the use of which he or she shall retain] the rights and obligations of a protected lessee.

(4) The landlord or the local government in the cases referred to in paragraphs 2 and 3 of this section are not bound to provide the protected lessee with another suitable flat if he or she owns a suitable habitable flat in the territory of the township or municipality where the flat in which he or she lives is located.

(5) ...”

By a decision of 31 March 1998 the Constitutional Court invalidated as unconstitutional, inter alia , paragraph 2 of section 40 which provided that in the case referred to in paragraph 1, first sub-paragraph, of that section the landlord could terminate the protected lease only if he or she had provided the protected lessee with another habitable flat under housing conditions that were not less favourable for the lessee. After that decision by the Constitutional Court, the Supreme Court , in decision Rev-486/02-2, Gzz 74/02 of 21 February 2007, specified that a landlord who intends to move into his or her own flat or install his or her children, parents or dependants therein is entitled to terminate the lease contract of a flat to a protected lessee (or to refuse to enter into a lease contract) only if (a) the landlord does not have other accommodation for himself or herself and for his or her family, and is either entitled to permanent social assistance or is over sixty years of age; or (b) the lessee owns a suitable habitable flat in the same municipality or township where the flat in which he or she lives is located.

Section 41 defines the notion of a “suitable flat”, referred to in paragraphs 3 and 4 of section 40, as a flat located in the same township or municipality, which complies in terms of its size with the “one person one room” principle and which does not have a greater number of rooms than the flat the protected lessee has to move out of.

2. The Property Act

Sections 66-99 of the Ownership and Other Rights In Rem Act ( Zakon o vlasništvu i drugim stvarnim pravima , Official Gazette no. 91/96 with subsequent amendments), which entered into force on 1 January 1997 (“the Property Act”), regulate condominium ( vlasništvo posebnih dijelova nekretnine , etažno vlasništvo ). This is a form of (co-)ownership of a multi-unit building where there is separate and distinct ownership of individual units (such as flats or business premises) and co-ownership of communal areas of the building (such as entrances, staircases, hallways, the roof, heating system, elevators, etc.) and of the land under it.

Section 84(1) provides that a co-owner in a condominium is bound to maintain, at his or her own expense, the individual unit (for example, a flat) he or she owns individually and has to bear all public levies in connection with that unit.

According to section 89(1) and (2) the costs of maintenance of and improvements to a condominium are incumbent upon all co-owners in proportion to their share in the condominium. Co-owners must set up a common reserve fund ( zajednička pričuva ) into which they have to pay a condominium fee ( doprinos za zajedničku pričuvu ).

COMPLAINT

The applicant complains under Article 1 of Protocol No. 1 to the Convention that he has been unable to either evict the protected lessee from, and move into his own flat, or charge the market rent for its lease. He submits, in particular, that mont hly protected rent (HRK 163.56) he is entitled to receive is not only significantly lower than the market rent (HRK 7,000) but is also by HRK 40 lower than the monthly condominium fee he has to pay as a co-owner of the building in which the flat is located.

QUESTIONS TO THE PARTIES

1. Was the judgment of the Split Municipal Court of 27 February 2008 whereby it refused to order the protected lessee living in the applicant ’ s flat to vacate it, in violation of the applicant ’ s right to peaceful enjoyment of his possessions guaranteed by Article 1 of Protocol No. 1 to the Convention?

2. In the negative, has there been a violation of that right having regard in particular to the level of protected rent the applicant has been entitled to receive under the domestic legislation in respect of his flat subject to the protected lease scheme (see Statileo v. Croatia , no. 12027/10 , 10 July 2014) ?