09 February 2009

FOURTH SECTION

Application no. 1175/06 by Gezim KASMI against Albania lodged on 19 December 2005

STATEMENT OF FACTS

THE FACTS

The applicant, Mr Gezim Kasmi, is a n Albanian national who was born in 1942 and lives in Tirana.

A. Relevant background

During the communist period, all private housing resources (“properties”) were nationalised by the State. Local authorities issued occupancy authorisations, which were tantamount to granting the right to tenancy of a flat (“secure tenancy”). A secure tenancy agreement was concluded between tenants and the State-owned Housing Maintenance Company ( Ndërmarrja Komunale Banesa – “the Housing Company”).

After the end of communist rule, at the beginning of the 1990s, laws were enacted concerning the restitution of nationalised properties to their former owners (“the landlords”) and compensation for them (see “Relevant domestic law and practice” below). The situation was particularly difficult with regard to residential housing, since it was characterised by a shortage of dwellings and the high cost of acquiring a flat.

All State-owned housing was privatised by virtue of a law enacted in 1992 (see “Relevant domestic law and practice” below). It was envisaged that tenants who occupied dwellings that had been returned to their former owners would continue to lease them. They would continue to pay rent, the amount of which would be controlled, and would vacate the dwellings once the State had provided them with new housing.

On two occasions, in 2004 and 2006 respectively, the legislature attempted to regulate this problem. It introduced a time-limit within which tenants had to vacate the dwellings in question. A number of criteria were laid down, the fulfilment of which would eventually result in the eviction of tenants. The new provisions were declared unconstitutional by the Constitutional Court in 2005 and 2007 respectively (see “Relevant domestic law and practice” below).

B . The circumstances of the case

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

The applicant ' s father owned a two-storey house, divided into two apartments. On an unspecified date the State nationalised the house and issued occupancy authorisations to two families: the Shimas, in respect of the apartment on the ground floor, and the Shomos, in respect of the apartment on the first floor. Secure tenancy agreements were concluded between each family and the State.

In 1986 J.Dh. – the Shomos ' son-in-law – moved in with them as a co-tenant. Following the death of the Shomos some time before 1993, it appears that J.Dh. succeeded to the secure tenancy agreement and acquired the rights and obligations of a tenant in relation to the flat. On 30 March 1993 the Municipality of Tirana ordered the Housing Company to conclude a secure tenancy agreement with J.Dh. This order was annulled by a second decision of the Municipality on an unspecified date. Following the Housing Company ' s refusal to conclude a secure tenancy agreement, J.Dh. instituted legal proceedings. As a result, a final court decision of 12 May 1993 ordered the Housing Company to conclude a secure tenancy agreement with J.Dh. To date, it appears that this decision has not been enforced.

In 2001 F. Shima concluded a contract of sale with the National Housing Agency (“the Agency”) for the purchase of an apartment located at a different address. Meanwhile, her son and daughter-in-law, B. Shima and M. Shima, had been granted homeless person status ( statusin e të pastrehit ) on an unspecified date and continued to have occupancy rights to the apartment on the ground floor, although they were in fact living abroad.

C . Administrative proceedings concerning restitution of the property

On an unspecified date the applicant, pursuant to the Property Restitution and Compensation Act (“the Property Act”) lodged a request with the Tirana Commission on Property Restitution and Compensation (“the Commission”) seeking restitution of the house.

By a decision of 27 September 1995 the Commission upheld the property rights of the applicant ' s father over the house. Following the death of the applicant ' s father the domestic courts issued a decision to the effect that the applicant and his siblings had inherited their father ' s property. On 15 August 1997, the applicant ' s and his siblings ' title to the property was entered in the relevant property register ( hipotekë ).

As the applicant could not regain possession of the property, given that it was occupied by J.Dh. and F. Shima, he brought an action seeking the tenants ' eviction.

D . Eviction proceedings before the civil courts

On an unspecified date the applicant asked the Tirana District Court to order the eviction of the tenants from the house, as they did not possess any property rights to it. He submitted that the tenants had never paid him any rent and that they no longer enjoyed homeless person status ( statusi i të pastrehit ). The occupation of the house directly impinged upon his property rights.

On 17 March 2003 the Tirana District Court upheld the applicant ' s action. It found that all the tenants were unlawfully occupying the applicant ' s house and ordered them to vacate the flats.

On 31 March 2003 J.Dh. and the Shimas appealed against the District Court ' s decision. They argued that they had occupied the flats on the strength of lawful occupancy orders issued by the authorities. In so far as they had been granted homeless person status, they maintained that the authorities should not have ordered their eviction from the ground-floor flat.

On 23 April 2004 the Tirana Court of Appeal quashed the District Court ' s decision. It held that both sets of tenants had lawfully occupied the flats on the basis of occupancy authorisations. It found that a room situated on the first floor had been vacated by J.Dh. It ordered F. Shima to vacate a room on the ground floor, as she had already entered into a contract of sale with the Agency in respect of another flat.

On an unspecified date the applicant lodged an appeal with the Supreme Court against the Court of Appeal ' s decision. He maintained that J.Dh. did not possess any occupancy authorisation in respect of the flat. He also submitted that the homeless person status of B. Shima and M. Shima, who had been living abroad for over seven years, did not entitle them to continue to occupy the other flat lawfully.

On 19 July 2005 the Supreme Court upheld the Court of Appeal ' s decision. First, it recognised the applicant ' s undisputed property rights over the house. Second, it found that J.Dh. was lawfully occupying one of the flats on the basis of the final court decision of 12 May 1993 and his homeless person status. Third, it held that B. Shima and M. Shima would continue to occupy the flat lawfully as long as they had homeless person status. Relying on section 14 of the 1993 Property Act (see “Relevant domestic law” below), it found that B. Shima and M. Shima were lawfully occupying the flat. As to F. Shima, it ruled that she had already received a flat, in view of the contract of sale with the Housing Agency.

When the Supreme Court pronounced its judgment of 19 July 2005 the Property Act 1993 had been repealed and replaced by the Property Act 2004 (see “Relevant domestic law” below).

The relevant domestic provisions read:

Article 41

“1. The right of private property is protected by law.

2. Property may be acquired by gift, inheritance, purchase, or any other ordinary means provided for by the Civil Code.

3. The law may provide for expropriations or limitations in the exercise of a property right only in the public interest.

4. Expropriations or limitations of a property right that are equivalent to expropriation are permitted only in return for fair compensation.

5. A complaint may be lodged with a court to resolve disputes regarding the amount or extent of compensation due.”

2. Property Restitution and Compensation Act (Law no. 7698 of 15 April 1993, as amended by Laws nos. 7736 and 7765 of 1993, Laws nos. 7808 and 7879 of 1994, Law no. 7916 of 1995 and Law no. 8084 of 1996 and abrogated by Law no. 9235 of 29 July 2004, and recently amended by Law. no. 9388 of 2005 and Law no. 9583 of 2006)

The Property Act has been described in detail in Driza v. Albania (no. 33771/02, §§ 33-44, ECHR 2007 ‑ ... (extracts)) and Ramadhi and o thers v. Albania (no. 38222/02, §§ 22-30, 13 November 2007). The relevant provisions as regards the present application are set out below.

(a) The Property Act 1993

The relevant provision of the Property Act 1993 provided:

Section 14

“The relationship between tenants and former owners who become landlords pursuant to this law shall be governed by Law no. 7652, dated 23 December 1992, “On the privatisation of state-owned housing”.

If ... the landlord provides the tenant with housing within the same local government unit, consisting of a surface area in accordance with the housing norms in force, ... the tenant shall be obliged to vacate the housing.

The State is obliged to resolve the housing needs of current tenants in accordance with the current housing norms, by giving priority to families with limited financial means.

At their request former owners may be compensated in one of the forms determined by this law.”

(b) The Property Act 2004

In so far as relevant, the Property Act 2004, repealing the 1993 Property Act, provided:

Section 9

“1. Housing which is the property of expropriated landlords shall be vacated by the tenant(s) within three years. The tenants shall continue to pay the rent set by the Council of Ministers for two years after the entry into force of this Act. The Council of Ministers shall be responsible for housing tenants who have been granted homeless person status, by providing a dwelling at a low rent, a low-interest loan or a dwelling whose rent is borne by the State.”

(i) The Constitutional Court ' s decision concerning section 9 § 1 of the Property Act 2004 (Decision no. 26/05)

In its decision no. 26 of 2 November 2005, the Constitutional Court declared unconstitutional section 9 § 1 of the Property Act 2004. It attached importance to the fact that the relevant provision had worsened the status of tenants compared to the provisions that existed before the new Act entered into force. It found that the amendment to the legislation did not respect the principle of legal certainty. It concluded that a limitation on tenants ' right to shelter could not be justified by the public interest of upholding landlords ' property rights. The decision, in so far as relevant, reads:

“Until the entry into force of the above provision, tenants of State-owned dwellings which were previously private property were entitled to certain rights..., in particular: a fixed rent at 1993 levels until a solution is found to the housing problem; the provision of housing by the State through its National Housing Agency, in compliance with the criteria laid forth in Law no. 7652 of 23 December 1992. On the basis of these provisions the State, firstly, undertook to provide housing by means of privatisation, in compliance with the criteria that were used for privatisation of housing in 1992, and, secondly, guaranteed that rents would remain unchanged until the solution of the [housing] problem.

Section 9 § 1 [of the Property Act of 2004] makes essential changes to tenants ' rights. While, under previous provisions, the State undertook to resolve the housing problem by enabling tenants to become owners on the basis of criteria that applied to the rest of the population, the contested provision does not expressly state this obligation on the State. The [Act] envisages the provision of housing through low-rent dwellings, low-interest loans or [the payment of] rents ... by the State.

Moreover, in contrast with the previous provision, which “froze” rent increases until a final solution was found to the housing problem, the contested provision expressly envisages the payment of such rents for the first two years after the Act ' s entry into force, implying that rents would be liberalised on the expiry of this time-limit.

The new Act contains other provisions which seriously worsen tenants ' status. While the previous Act provided that dwellings would be vacated when their tenants were provided with permanent housing, the contested provision arbitrarily envisages that tenants are to vacate the dwellings within three years.

It is clear that section 9 § 1 [of the Property Act 2004] greatly impinges upon some of the rights that tenants had acquired under the previous legislation....

The Constitutional Court also observes that section 9 § 1 [of the Property Act 2004] breaches the principle of legal certainty... Legal certainty presumes, inter alia , the trust that citizens should have in the State and the irreversibility ( pandryshueshmërinë ) of the law. That trust is related to the fact that citizens should not have to worry continuously about the ever-changing nature and consequences of legal norms which impinge upon and worsen a previously settled status.

... This principle [of legal certainty] cannot prevail in every instance. Thus, if the legal regulation of a relationship is directly influenced by the public interest, it is the latter which prevails over the principle of legal certainty.

In the instant case, the amendment to the law, in favour of a certain group of the population, cannot be justified by an essential public interest. It is true that the amended provision favours property owners; on the other hand, however, it discriminates against another group, impinging upon tenants ' right to shelter. Denying tenants ' rights to become owners and ending their lease without guaranteeing another dwelling cannot be justified on any public interest ground.”

(c) The Property Act 2006

The Property Act 2006 amended section 9 of the 2004 Act as follows:

Section 9

“1. Dwellings which are the property of expropriated landlord(s) and which were leased to tenants by the State before the entry into force of Law no. 7652, dated 23 December 1992, ' On Privatization of State-owned Housing ' , which are used for housing needs shall be transferred to the possession of the expropriated owner(s), when one of the following conditions is met:

a. The housing needs of the tenants have been met in any other lawful way;

b. The expropriated landlords provide the tenants with a dwelling that has a surface area no smaller than the dwelling they already use and which is in an approximately similar condition and within the same local government unit, until such time as the tenants ' housing needs are met in one of the other ways provided for by this section.

c. The tenants conclude a loan contract with a financial institution, in accordance with the first and second paragraph of section 25 of Law no.9232 of 13 May 2004, ' On social programmes for the housing of inhabitants of urban areas ' ;

d. (ç) The tenants benefit from housing or a plot of land as provided for by section 25 (13) of Law no. 9232 of 13 May 2004, ' On social programmes for the housing of inhabitants of urban areas ' ;

(i) The Constitutional Court ' s decision concerning section 9 § 1 of the Property Act 2006 (Decision no. 11/07)

In decision no. 11 of 4 April 2007 the Constitutional Court declared unconstitutional section 9 § 1 of the Property Act 2006. It followed the same line of reasoning as in its decision no. 26/05. It recommended that the Council of Minister adopt new legislative measures to fill the legal vacuum.

3. The Privatisation of State-owned Housing (banesa shtetërore) Act (Law no. 7652 of 23 December 1992)

The Act was intended to privatise State-owned housing and to create a free housing market, thus empowering tenants to become owners. Under the Act, individuals residing in State-owned flats pursuant to a secure tenancy agreement were entitled to transfer these flats into their private ownership subject to completion of a set of actions, payment of the full privatisation price and registration of the property at the relevant property office.

Section 16 of the Act provided that homeless citizens were entitled to receive loans from financial institutions to resolve their housing needs. The interest payments would be borne by the State budget through the National Housing Agency. Section 19 stipulated that rents for dwelling which had previously been private property would be liberalised as from December 1995. Section 25 stipulated that the State would become an actor in alleviating the housing problem through the establishment of specialised institutions.

(a) The Constitutional Court ' s decision concerning the interpretation of the Privatisation of State-owned Housing Act (Decision no. 11/93)

In decision no. 11 of 27 August 1993 the Constitutional Court gave an interpretation of the Privatisation of State-owned Housing Act (Law no. 7652) and the Property Act 1993. It held, inter alia , that no discrimination resulted from the existence of two categories of tenants, as provided for under the domestic laws. The decision, in so far as relevant, reads:

“The [Constitutional] Court observes that Law no. 7652, dated 23 December 1992, “On the Privatisation of State-owned Housing” and Law no. 7698, dated 15 April 1993, “On Property Restitution and Compensation”, govern the problems of the privatisation of State-owned housing and of the restitution of properties to former landlords and compensation for them.

Under both laws, tenants of State-owned dwellings have the right to privatise them in compliance with the conditions prescribed under the law. In order to resolve their housing needs, tenants of dwellings that have been returned to the former landlords have been granted the right to receive loans from financial institutions, the interest payments of which [loans]... are to be borne by the State budget, as expressly provided for in section 16 of the Act, or, alternatively, are to be housed as tenants in dwellings to be constructed by the State under section 25 of the said Act.

The different solutions to the housing problems that concern these categories of tenants do not arise from any type of discrimination between them, but are a result of the different status they enjoy: the first are tenants of State-owned dwellings, the second are tenants of dwellings that have been allocated to their previous owners.”

4. The State Contribution to Homeless Families Act (Law no. 8030 of 15 November 1995, as amended by Law no. 8647 of 24 July 2000)

Section 11 of the 1995 Act introduced the notion of liberalisation of the rents that tenants would be obliged to pay. It established the ratio of the rent payable by the tenant and the State.

By decision no. 5 of 27 February 1997, the Constitutional Court declared unconstitutional section 11. It found that, in view of the financial circumstances experienced by Albanian households, the ratio of the rent payable by tenants placed a disproportionately heavy financial burden on them. It recommended that the Government fill the resulting legal vacuum.

On 24 July 2000, Parliament enacted the 2000 Act, which entered into force on 1 January 2001. In so far as relevant, section 10 of the Act provided:

“... homeless citizens who live in dwellings belonging to former landlords shall pay a rent on the basis of the rates that they were paying at the time of entry into force of Law no. 7698 of 15 April 1993 ' On Property Restitution and Compensation ' .”

It appears that such a system of controlled rents is still in force.

COMPLAINT

The applicant complains under Article 1 of Protocol No. 1 to the Convention about a violation of his property rights as a result of the impossibility of recovering possession of the house .

QUESTION TO THE PARTIES S

1. Has there been an interference with the applicant ' s right to peaceful enjoyment of his possessions, within the meaning of Article 1 of Protocol No. 1?

(a) If so, which rule of Article 1 of Protocol No. 1 to the Convention applies in the instant case?

(b) If so, was the interference in the public interest and in accordance with conditions provided for by law, within the meaning of Article 1 of Protocol No. 1?

(c) If so, did the interference impose an excessive individual burden on the applicant (see, for example, Immobiliare Saffi v. Italy [GC] ( no. 22774/93, § § 43-59 , ECHR 1999 ‑ V ) ?

2. Do the Government consider that the present case raises issues of a structural and systemic nature in relation to secure tenancies (see, in particular, Hutten-Czapska v. Poland [GC], no. 35014/97, ECHR 2006 ‑ ...; Broniowski v. Poland [GC], no. 31443/96, ECHR 2004 ‑ V ) ?

3. The Government are requested to submit information on the relevant legislative framework in relation to housing and the relevant remedies introduced after the Constitutional Court ' s decision no. 11 of 4 April 2007.