FIRST SECTION

Application no. 14303/11 Draško BUDIMIR against Croatia lodged on 7 February 2011

STATEMENT OF FACTS

The applicant, Mr Draško Budimir , is a Croatian national, who was born in 1941 and lives in Split . He is represented before the Court by Ms Garafulić Kukoč and Mr Restović , lawyers practising in Split .

A. The circumstances of the case

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

By a judgment of the Split County Court of 24 June 1948 a flat in Split , measuring 84,49 square metres, at the address Ante Jonjića Street 1 was confiscated from a private owner. It became property of the Split Municipality .

The applicant was an employee of a publicly-owned company “ Brodospas ” from Split and paid obligatory monthly contributions to its housing fund. On 28 October 1980 the Housing Commission of “ Brodospas ” adopted a priority list for granting protected tenancies and the appli cant was the first on the list.

On 21 August 1984 the Housing Commission of the Split Municipality entered a contract by which it ceded the flat at issue to “ Brodospas ” for a period of three years. The applicant was not aware of that contract.

On 22 February 1985 the Worker ’ s Council of “ Brodospas ” adopted a decision granting the flat to the applicant for occupation, and on the same day a contract on grating the flat for his occupation was concluded between the “ Brodospas ” and the applicant. The applicant moved to the flat with his family and has been living there ever since.

O n 3 June 1991, the Parliament enacted the Specially Protected Tenancies ( Sale to Occupier) Act ( Zakon o prodaji stanova na kojima postoji stanarsko pravo ) which regulates the sale of publicly-owned flats previously let under a specially protected tenancy. In general, the Act entitles the holder of a specially protected tenancy on a publicly-owned flat to purchase it under favourable conditions of sale. However, the Act excludes from such favourable treatment the holders of specially protected tenancies on most privately-owned flats.

Under the Denationalisation Act of 11 October 1996 p revious owners (or their heirs) were entitled to claim restitution of the properties expropriated by the State, including dwellings which had been let under the “specially protected tenancy” scheme. Thus, a number of these dwellings became private properties.

The Leases Act ( Zakon o najmu stanova ) of 22 October 1996 in general regulates the legal relationship between lessee and lessor in regard to the lease of flats. It recognises a special category of lessees, those who were previously holders of specially protected tenancies on privately-owned flats. Such a category is, according to the Act, subject to a number of protections, such as an obligation for the owners to contract a lease for an unlimited period of time, the payment of a so called “protected rent”, the amount of which is to be prescribed by the Government, and strictly limited reasons for termination of the lease. This Act abolishes the specially protected tenancy as such.

On 27 March 1997 the applicant asked to purchase the flat from the Split Municipality which did not reply.

On an unspecified date in 2001 the applicant brought a civil action in the Split Municipal Court against the Fund for the Restitution of the Expropriated Property, seeking a judgment in lieu of the contract of sale.

The claim was denied on 6 March 2006 on the ground that the flat had been ceded to “ Brodospas ” by the Split Municipality for a period of three years and that therefore the applicant could not have acquired a specially protected tenancy on it. This judgment was upheld by the Split County Court on 2 March 2007 and the Supreme Court on 9 June 2009.

The applicant ’ s subsequent constitutional complaint was dismissed on 17 June 2010.

On 25 September 2007 the flat was returned to an heir of its previous owner, I.H.

B. Relevant domestic law

The relevant provisions of the Housing Act ( Zakon o stambenim odnosima , Official Gazette nos. 51/1985, 42/1986, 22/1992 and 70/1993) read as follows:

Section 8

“A protected tenancy cannot be acquired in respect of:

1. Flats designated for temporary or provisional accommodation...”

1. The Transfer Prohibition Act

The Act on the Prohibition of the Transfer of Rights to Dispose of and Use Certain Items of Immovable Property in Social Ownership to other Users or into the Ownership of other Natural or Legal Persons ( Zakon o zabrani prijenosa prava raspolaganja i korištenja određenih nekretnina u društvenom vlasništvu na druge korisnike odnosno u vlasništvo drugih fizičkih i pravnih osoba , Official Gazette nos. 53/1990, 61/1991, 25/1993 and 70/1993 – “the Transfer Prohibition Act”), which entered into force on 14 December 1990, banned any transfer of property that had been acquired by means of nationalisation or confiscation.

Paragraph 1 of section 1 provided that the prohibition applied to any property appropriated on the basis of legislation listed in that paragraph.

Paragraph 2 of section 1 provided that the prohibition applied to any property appropriated by means of confiscation irrespective of the legislation on which the confiscation measure had been based.

Section 4(1) provided that any contract concluded in contravention of the provisions of the Transfer Prohibition Act was null and void.

Section 6 provided that the prohibition was to apply until the introduction of denationalisation legislation.

2. The Denationalisation Act

(a) Relevant provisions

The Act on Compensation for, and Restitution of, Property Taken During the Yugoslav Communist Regime ( Zakon o naknadi za imovinu oduzetu za vrijeme jugoslavenske komunističke vladavine , Official Gazette nos. 92/1996, 92/1999 (corrigendum), 80/2002 (amendments) and 81/2002 (corrigendum) – “the 1996 Denationalisation Act”), which entered into force on 1 January 1997, enables the former owners of confiscated or nationalised property, or their heirs in the first line of succession (direct descendants and a spouse), to seek under certain conditions either restitution of or compensation for appropriated property. The relevant provisions of the Denationalisation Act read as follows:

I. BASIC PROVISIONS

Section 1

“...

(2) Restitution of property appropriated from former owners within the meaning of this Act shall, in principle, take the form of payment of compensation in money or securities (stocks or shares, or bonds), or, exceptionally, restitution in kind.

...

(4) Ownership of confiscated property shall be awarded to its former owner in accordance with this Act, and if this is impracticable ... the former owner shall have the right to compensation in the form of money or securities.”

IV. SUBJECT OF RESTITUTION

3.1. (a) RESTITUTION OF APPROPRIATED FLATS

Section 22

“(1) Unless they were appropriated by means of confiscation, the ownership of flats ... let under specially protected tenancies shall not be restored to their former owners.

...

(3) The former owner shall have the right to compensation and the tenant [i.e. the holder of a specially protected tenancy] shall have the right to purchase the flat.”

3.1. (b) RESTITUTION OF CONFISCATED FLATS

Section 32

“Ownership of a flat appropriated [by means of confiscation] shall be awarded to its former owner.”

Section 33

“Where the flat is awarded to its former owner, the tenants [i.e. the holders of a specially protected tenancy of the flat] shall acquire the status of [protected] lessees under the provisions of [the Lease of Flats Act].”

Section 35

“(1) The [former] owner and the lessee are bound to conclude a lease contract [with protected rent] within 60 days from the day the decision awarding ownership [of the flat to the former owner] became final.

(2) If the [former] owner refuses to conclude the lease contract, the tenant may enforce his or her right by bringing an action in the competent court within 60 days from the day the [former] owner of the flat refused to conclude the lease contract. The court ’ s decision shall entirely replace the lease contract.”

Section 37(1)

“In the case of further disposal in rem of the flat, the lessee shall have the right of pre-emption.”

VI. EXCEPTIONS FROM RESTITUTION IN KIND OF NATIONALISED, CONFISCATED OR OTHERWISE APPROPRIATED PROPERTY

Section 52

“Unless otherwise provided by this Act, ownership and possession of property of which third persons have acquired ownership on the basis of a valid legal title, or of property which has been handed over into their possession on the basis of a valid legal title for acquiring ownership, shall not be returned to the former owner.”

(b) Case-law of the Supreme Court

In its judgment no. Rev 927/07-2 of 12 February 2008 the Supreme Court held that the time-limit specified in section 35(1) of the Denationalisation Act was not preclusive and that therefore by failing to observe it, a former holder of a specially protected tenancy did not lose his right to conclude a lease contract with protected rent.

3. The Appropriated Property Compensation Fund Act

The Appropriated Property Compensation Fund Act ( Zakon o Fondu za naknadu oduzete imovine , Official Gazette nos. 69/1997, 105/1999 and 64/2000), which entered into force on 12 July 1997, reads as follows in so far as relevant:

Section 13

“The tenants (lessees) of confiscated flats in respect of which no requests for restitution were submitted within the time-limit prescribed by [the Denationalisation Act], or such requests were dismissed by a final decision, shall acquire the right to purchase their flats under the provisions of that Act.”

4. The Specially Protected Tenancies ( Sale to Occupier) Act

The Protected Tenancies ( Sale to Occupier) Act ( Zakon o prodaji stanova na kojima postoji stanarsko pravo , Official Gazette no. 27/1991 with further amendments - “the Act”) regulates the conditions of sale of flats let under protected tenancies.

Section 1 of the Act gave the right to the holders of protected tenancies of publicly-owned flats to purchase the flats under favourable conditions, provided that each holder bought only one flat.

Section 161 paragraph 1 of the Property Act ( Zakon o vlasništvu i drugim stvarnim pravima , Official Gazette no 91/1996) reads as follows:

“An owner has the right to seek repossession of his or her property from a person in whose possession it is.”

5. The Lease of Flats Act

(a) Relevant provisions

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 the landlord and the lessee with respect to the lease of flats. It recognises a special category of lessees (“protected lessees” – zaštićeni najmoprimci ), namely those who were previously holders of specially protected tenancies on privately owned flats or those who did not purchase their flats under the Specially Protected Tenancies ( Sale to Occupier) Act. That category is subject to a number of protections, for instance, the obligation of landlords to contract a lease for an unlimited period of time; payment of protected rent ( zaštićena najamnina ), the amount of which is to be prescribed by the Government; and limited list of grounds for termination of the lease.

Pursuant to the Act, a landlord may terminate the lease of a protected lessee in the following cases:

- if the lessee does not pay the rent or charges;

- if the lessee sublets the flat or part of it without permission from the landlord;

- if the lessee or other tenants in the flat disturb other tenants in the building;

- if another person, not named in the lease contract, lives in the flat for longer than thirty days without permission from the landlord, except where that person is a spouse, child or parent of the lessee or of the other legal tenants in the flat, or a dependant of the lessee or a person on whom the lessee is dependent;

- if the lessee or other legal tenants do not use the flat as living accommodation but for other purposes;

- if the landlord does not have another flat and is entitled to social welfare benefits or is more than sixty years of age.

Under section 40(1) of the Act, the landlord may also terminate the lease of a protected lessee if the landlord intends to move into the flat himself or install his children, parents or dependants in it.

Section 30 provided that by the Act ’ s entry into force, specially protected tenancies were to be abolished and the holders of such tenancies were to become protected lessees.

Section 33(2) provided that the lessee had to submit a request for the conclusion of a lease contract with 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 became final.

(b) Case-law of the Constitutional Court

In its decision no. U-1031/2000 of 1 June 2005 the Constitutional Court held that the time-limit set forth in section 33(2) of the Lease of Flats Act was not preclusive and that therefore by failing to observe it, a former holder of a specially protected tenancy did not lose her right to conclude a lease contract with protected rent.

COMPLAINTS

The applicant complains under Article 6 § 1 of the Convention about the outcome of the civil proceedings in question.

He further complains that his right to respect for his home was violated.

He also complains under Article 1 of Protocol No. 1 that his right to property was violated.

Lastly, he complains that he was discriminated against as regards his rights in respect of the flat he occupies.

QUESTION S TO THE PARTIES

1. Has there been interference with the applicant ’ s right to respect for his home, within the meaning of Article 8 § 1 of the Convention? If so, was that interference in accordance with the law and necessary in terms of Article 8 § 2 of the Convention?

2. Was the applicant ’ s claim to purchase the flat he occupies under favourable conditions under the Protected Tenancies (Sale to Occupier) Act “sufficiently established” to attract applica bility to Article 1 of Protocol No. 1 to the Convention? If so, did the refusal by the national courts to grant him claim to purchase the flat at issue amount to an interference with the applicant ’ s peaceful enjoyment of possessions, within the meaning of Article 1 of Protocol No. 1? If so, was that interference 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? In particular, did that interference impose an excessive individual burden on the applicant (see Immobiliare Saffi v. Italy, [GC], no. 22774/93, § 59, ECHR 1999-V?] ?

3. Has the applicant suffered discrimination in the enjoyment of his Convention rights , contrary to Article 14 of the Convention read in conjunction with Article 8 of the Convention or Article 1 of Protocol No. 1 to the Convention ?

The Government are invited to submit two copies of all relevant documents, including a civil case-file and all decisions concerning the granting of the right to occupy the flat to the applicant by his former employer “ Brodospas ” as well as all documents relative to the ownership of the flat in question between 1948 and the present day.