ASSOCIATION OF REAL PROPERTY OWNERS IN ŁÓDŹ AND OTHERS v. POLAND

FOURTH SECTION

DECISION

PILOT-JUDGMENT PROCEDURE

Application no. 3485/02

by THE ASSOCIATION OF REAL PROPERTY OWNERS IN ŁÓDŹ

against Poland

and 24 other applications

The European Court of Human Rights (Fourth Section), sitting on 8 March 2011 as a Chamber composed of:

Nicolas Bratza, President,
Lech Garlicki,
Ljiljana Mijović,
Sverre Erik Jebens,
Päivi Hirvelä,
Ledi Bianku,
Zdravka Kalaydjieva, judges,
and Fatoş Aracı, Deputy Section Registrar,

Having regard to the above application lodged on 29 December 2001,

Having regard to the decision to grant priority to the above application under Rule 41 of the Rules of Court,

Having regard to the decision to examine the case simultaneously with the case of Piotrowski v. Poland (no. 27910/07), pursuant to Rule 42 § 2 of the Rules of Court,

Having regard to the decision to apply the pilot-judgment procedure and to adjourn its consideration of applications deriving from the same systemic problem identified in the case of Hutten-Czapska v. Poland (no. 35014/97),

Having regard to twenty-four adjourned similar cases, listed in annex no. 2 to the present decision,

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

Having deliberated, decides as follows:

PROCEDURE

1. The application was lodged by Stowarzyszenie Właścicieli Nieruchomości w Łodzi (“the Association of Real Property Owners in Łódź”), an association set up by landlords residing in Łódź whose property was subject to the rent control scheme in Poland, on behalf of 239 individual applicants – members of the association. The association and individual applicants were represented before the Court by Mr A. Rozenkowski, the president of the association, and Mr B. Orlicki, a lawyer practising in Łódź.

The Polish Government (“the Government”) were represented by their Agent, Mr J. Wołąsiewicz, of the Ministry of Foreign Affairs.

2. After the Chamber had given notice of the application to the respondent Government, pursuant to Rule 54 § 2(b) of the Rules of Court, the representatives of the applicants submitted an updated list of applicants who wished to pursue the application before the Court. That list comprised 96 persons, whose names and personal details are listed in the attached annex no. 1 to the decision.

THE FACTS

A. The circumstances of the case

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

4. Houses belonging to the applicants, or their predecessors in title, were at various dates taken under the so-called “state management of housing matters”, introduced in 1946 and were subsequently made subject to the “special lease scheme”, introduced in 1974, and the system of “controlled rent”, which replaced the latter in 1994 and continued to apply until 10 July 2001 (see also Hutten-Czapska v Poland (merits), no. 35014/97, [GC], §§ 12-14 and 67-84, ECHR 2006-VIII).

5. Since then, i.e. since the entry into force of the Act of 21 June 2001 on the protection of the rights of tenants, housing resources of municipalities and on amendments to the Civil Code (Ustawa o ochronie praw lokatorów, mieszkaniowym zasobie gminy i o zmianie Kodeksu cywilnego) (“the 2001 Act”) the lease of flats in their houses has been governed by the provisions of that law, particularly in respect of rent increases, termination of leases, maintenance and repairs and succession to leases (see Hutten‑Czapska (merits), cited above, §§ 85-106 and 113-146 and Hutten-Czapska v Poland (friendly settlement), no. 35014/97, [GC], §§ 12‑13 and 15-19).

B. Relevant domestic law and practice

1. General background and laws as applicable before the 2001 Act

6. A detailed description of the historical, social and economic background to the case and of laws restricting landlords’ rights until the entry into force of the 2001 Act can be found in paragraphs 12-19 and 67-84 of the Hutten‑Czapska pilot judgment on the merits (cited above).

2. The 2001 Act

7. The relevant provisions of the 2001 Act (as amended on several occasions and as applicable until the adoption of the Hutten-Czapska merits judgment), together with the summary of the related Constitutional Court’s rulings, are set out in paragraphs 85-106, 113 and 124-146 of that judgment.

3. The December 2006 Amendment

8. The Act of 15 December 2006 on amendments to the 2001 Act on the protection of the rights of tenants, housing resources of municipalities and on amendments to the Civil Code (“the December 2006 Amendment”) (ustawa o zmianie ustawy o ochronie praw lokatorów, mieszkaniowym zasobie gminy i o zmianie Kodeksu cywilnego) entered into force on 1 January 2007. It modified a number of legal provisions governing leases, their termination and levels of rent with a view to implementing the Constitutional Court’s judgment of 19 April 2005 and the resultant recommendations for Parliament of 29 June 2005 (see Hutten-Czapska (merits), cited above, §§ 133-142), as well as the subsequent Constitutional Court’s judgments of 17 May 2006 and 11 September 2006. Those judgments are rendered in paragraphs 12-13 of the Hutten-Czapska friendly‑settlement judgment.

(a) New statutory definition of expenses involved in maintenance of a rented dwelling

9. The December 2006 Amendment added a new subsection 8a to section 2(1) of the 2001 Act. Section 2(1) 8a reads:

“If this law refers to expenses connected with maintenance of a dwelling, [this expression] should be understood as expenses incumbent on the landlord and calculated proportionally to the usable surface of the dwelling in relation to the total usable surface of all dwellings in the building, including a fee for perpetual use of the land, property tax and the [following] costs:

(a) maintenance and keeping property in a proper technical condition, as well as renovations;

(b) administration of property;

(c) upkeep of shared premises, lifts, collective aerial installations, intercoms and greenery;

(d) property insurance;

(e) other [items], if they are stipulated in a [lease] agreement.”

(b) New provisions on rent increases and conditions for the termination of leases

10. Following the December 2006 Amendment, section 8a (4) of the 2001 Act[1] is worded:

“An increase whereby rent or other charges for the use of the dwelling would exceed 3% of the reconstruction value of the dwelling within 1 year may take place only in justified cases, referred to in subsections 4(a) and 4(e). At the tenant’s written request, the landlord shall, within 14 days from receipt of the request, give reasons for the increase and its calculation in writing, failing which the increase shall be null and void.”

11. Amended rules for rent increases are set out in the above-mentioned new subsections 4(a)-4(e), which were inserted into section 8a. In so far as relevant, they read:

“4(a) If the landlord does not receive income from rent or other charges for the use of a dwelling at a level covering the costs of maintenance of the dwelling as well as securing to him a return on capital investment and profit, ... an increase enabling him to reach that level shall be considered justified if it remains within the limits set out in subsection 4(b).

4(b) In an increase of rent or other charges for the use of a dwelling, the landlord may include:

(1) a return on capital investment at the maximum level per year:

(a) 1.5% of the investments made by the landlord for the construction or purchase of a dwelling; or

(b) 10% of the investments made by the landlord for the permanent improvement of the dwelling, increasing its usable valueuntil the full return [of such investments];

(2) decent profit.

...

4(e) An increase in rent or other charges for use of a dwelling which does not exceed the average annual general retail price index in the previous calendar year shall be considered justified. The average annual general retail price index for the previous calendar year shall be published, in the form of a communiqué by the President of the Central Statistical Office in the ‘Monitor Polski’, the Official Gazette of the Polish Republic.”

While section 11 of the 2001 Act maintains the general conditions for the termination of leases as applicable on the date of adoption of the pilot judgment (see Hutten-Czapska (merits) cited above, §§ 127-129), pursuant to section 8a (2) and (5)(1-2), a tenant’s refusal to accept a rent increase deemed to be justified under the above-cited provisions is tantamount to a termination of the contract by the end of the period of notice (3 months). Otherwise, it is still open to a tenant to lodge a civil action to have the increase declared unjustified, or justified but in a different amount (ibid. § 125).

(c) New rule governing the civil liability of municipalities for failure to supply social housing to a protected tenant

12. Section 18(3) of the 2001 Act continues to maintain favourable provisions concerning the amount of rent to be paid during the period between the issuing of an eviction order and the vacation of a flat by protected tenants who, on account of their low income, are entitled to social housing from a municipality (see the Constitutional Court’s judgment of 11 September 2006, set out in paragraph 13 of the Hutten-Czapska (friendly settlement) judgment; for the situation concerning the provision of social housing to tenants under the rent‑control scheme as applicable until the adoption of the Hutten-Czapska (merits) judgment, see its paragraphs 79 and 89).

13. In implementation of the Constitutional Court’s judgment of 11 September 2006, the December 2006 Amendment added a new provision (subsection (5)) to section 18, which makes the municipality liable, under the rules of tort, for any damage sustained by the landlord on account of the municipality’s failure to provide the tenant with social housing. This provision reads:

“(5) If the municipality has not provided social housing to a person who is entitled to it by virtue of a judgment, the landlord shall have a claim for damages against the municipality on the basis of Article 417 of the Civil Code.”

Consequently, the municipality’s failure is statutorily deemed to be an “unlawful omission” within the meaning of Article 417 of the Civil Code.

4. Article 417 of the Civil Code

14. In so far as relevant, Article 417 of the Civil Code provides:

“1. The State Treasury, municipality or another legal person wielding public power by virtue of the law shall be liable for damage caused by an unlawful act or omission in the exercise of that power.”

15. The Supreme Court, in its ruling of 25 June 2008 (no. CZP 46/2008) concerning a claim for damages under section 18(5) of the 2001 Act read in conjunction with Article 417 of the Civil Code, confirmed that a landlord was entitled to full compensation for any damage sustained on account of a municipality’s failure to provide social housing to a tenant.

5. The December 2009 Amendment

16. The Act of 17 December 2009 on amendments to the 2001 Act on the protection of the rights of tenants, housing resources of municipalities and on amendments to the Civil Code and amendments to certain other statutes (ustawa o zmianie ustawy o ochronie praw lokatorów, mieszkaniowym zasobie gminy i o zmianie Kodeksu cywilnego oraz o zmianie niektórych innych ustaw) (“the December 2009 Amendment”) entered into force on 28 January 2010. It introduced a new chapter 12a, dealing with the so-called “occasional lease” (“najem okazjonalny”), into the 2001 Act. “Occasional leases” are essentially removed from the operation of most provisions of the 2001 Act, particularly those concerning rent increases, protection of tenants, termination of contracts and restrictions on eviction. They are intended for physical persons who own flats and wish to rent them out in return for a freely determined and contractual rent for a period not exceeding 10 years. A landlord who conducts business activity involving the lease of flats cannot take advantage of this form of lease. The rent and the conditions for its increase are freely determined in a lease agreement and are not subject to any of the limitations foreseen in the 2001 Act (see paragraphs 10-11 above). The procedure for eviction is simplified. When drawing up the lease agreement, the tenant is obliged to make a notarised declaration agreeing to a voluntary vacation of the rented flat on termination of the lease and must indicate a flat to which he is to be evicted should an eviction order be issued against him.

Pursuant to section 3 of the December 2009 Amendment, income received from occasional leases is subject to a reduced tax rate of 8.5% per annum.

6. Other related laws

(a) The 2006 Act

17. The Act of 8 December 2006 on financial assistance for social housing, protected accommodation, night shelters and houses for the homeless (as amended) (ustawa o finansowym wsparciu tworzenia lokali socjalnych, mieszkań chronionych, noclegowni i domów dla bezdomnych) (“the 2006 Act”) sets out the conditions for obtaining financial assistance from the State for the construction of buildings or dwellings designated for social housing (as defined by the 2001 Act) and for the purpose of securing other forms of accommodation for the less well-off.

Such assistance can be obtained by municipalities, unions of municipalities and public benefit organisations (organizacje pożytku publicznego) in connection with the construction, renovation, conversion, alteration of use or purchase of buildings for social accommodation. Depending on the nature of the development, the subsidies available vary from 30% to 50% of the costs of the investment (section 13 as amended on 12 February 2009).

The payments are secured by the State Economy Bank (Bank Gospodarstwa Krajowego) from money allocated to the Subsidies Fund (Fundusz Dopłat).

(b) The August 2007 Amendment

18. The Act of 24 August 2007 on amendments to the 1997 Land Administration Act and certain other statutes (“the August 2007 Amendment”) (ustawa o zmianie ustawy o gospodarce nieruchomościami oraz o zmianie niektórych innych ustaw) introduced an information system for monitoring the levels of rent within Poland. That system is referred to as a “rent mirror” (lustro czynszowe). It stores information on the average rent levels in a given region, thus creating an additional tool for civil courts adjudicating on disputes arising from rent increases by landlords (see Hutten-Czapska (merits), cited above, § 138).

19. Under section 186a of the 1997 Land Administration Act, a new provision introduced by the August 2007 Amendment, a manager administering property that includes flats for rent is obliged to supply information to the relevant local government on the level of rent for flats rented out under tenancy agreements concluded in respect of dwellings in buildings administered by him. This information must include the building’s location, its age and technical condition, the usable area of the flat and its characteristics.

Pursuant to section 6 of the August 2007 Amendment, the municipality is required to publish in the regional official gazette (wojewódzki dziennik urzędowy) an inventory of data on levels of rent for privately‑owned residential dwellings within its administrative borders.

7. The 2008 Act

(a) Relevant provisions

20. The Law of 21 November 2008 on Supporting Thermo‑Modernisation and Renovations (ustawa o wspieraniu termomodernizacji i remontów) (“the 2008 Act”) was adopted by Parliament on 21 November 2008 and entered into force on 19 March 2009.

The Act is part of the Government’s housing programme, aimed at improving the existing housing stock. In particular, it concerns tenement houses – both State and privately-owned – which, as stated in the explanatory report, have been neglected and fallen into disrepair as a result of the operation of the rent-control scheme, which made it impossible for landlords to receive rent that would secure investment in suitable maintenance and renovations. The explanatory report states that because of previous neglect, it will become necessary within the next 8 years to demolish 40,000 tenement houses, containing 200,000 flats, belonging to private individuals, municipalities or housing communes.

21. Under sections 3-7 of the Act, an investor who has carried out renovation or thermo-modernisation work is entitled to the so-called “renovation refund” (premia remontowa) or “thermo-modernisation refund” (premia termomodernizacyjna).

The granting of those refunds is subject to the statutory condition that a given renovation or thermo-modernisation project would result in energy savings, in particular as regards a building’s heating and hot water supply systems. The refunds are available only in respect of larger-scale, costly renovations.

22. A renovation refund means in practice a partial refund of a loan taken out for the purposes of renovating a building, including the replacement of windows, renovations of balconies, fitting of the necessary installations or equipment or alteration of the building resulting in its improvement.

Under section 9, the renovation refund amounts to 20% of a loan taken out by an investor but not more than 15% of the costs of the entire renovation project. Thermo-modernisation refunds are subject to ceilings of 20% and 16% respectively.

The refund payments are to be secured by the State Economy Bank from money allocated to the Thermo-Modernisation and Renovations Fund (Fundusz Termomodernizacji i Remontów).

23. The Act introduced a system of compensatory refunds (premie kompensacyjne) available to owners whose property was subject to the rent‑control scheme between 12 November 1994 and 25 April 2005[2] (see also Hutten-Czapska (merits), cited above, §§ 71-72, 136-141 and 194).

Section 2(13) of the 2008 Act provides:

“ A dwelling subject to the rent-control scheme (lokal kwaterunkowy) shall be a dwelling within the meaning of [the 2001 Act] in respect of which the lease originated in an administrative decision on allocation to a dwelling or had another legal basis dating back to the period before State management of housing matters or the special lease scheme were introduced in the relevant town, and in respect of which rent was:

(a) controlled;

(b) statutorily limited to 3% of the reconstruction value of the dwelling per year;

(c) statutorily limited in its ... increase to 10% per year

during any period between 12 November 1994 and 25 April 2005.”

Section 10 provides:

“1. An investor – a physical person who on 25 April 2005 was an owner or heir to an owner of a building in which there was at least one dwelling subject to the rent‑control scheme – shall be entitled to a refund, hereinafter referred to as a ’compensatory refund’.

2. A compensatory refund shall be granted only once in respect of any one building.

3. A compensatory refund shall be issued for paying off a loan granted for carrying out:

(1) a renovation project; or

(2) the renovation of a one-family house

if [such a project] concerns the building referred to in subsection 1.

4. Except for the renovation referred to in subsection 3(2), a compensatory refund shall be granted with a renovation refund.”

24. In so far as relevant, section 11 provides:

“1. ... a compensatory refund shall be equal to the product of the indicator of the costs of the investment and a sum amounting to 2.1% of the conversion index for each square metre of the usable surface of the dwelling subject to the rent-control scheme and for each year in which the limitations referred to in section 2(13) applied in the period from 12 November 1994 to 25 April 2005 or, if the building was not acquired through succession, from the date of acquisition to 25 April 2005.

2. If an indicator of the costs of the investment is lower than 0.5, for the purposes of the calculation of the compensatory refund it shall be assumed that that indicator is equal to 0.5.

3. If an indicator of the costs of the investment is higher than 0.7, for the purposes of the calculation of the compensatory refund it shall be assumed that that indicator is equal to 0.7.

4. The formula for the calculation of a compensatory refund is set out in the annex to this law.”

25. The annex sets out the following formula:

The components of the formula are listed as follows:

“P – the amount of the compensatory refund

k =a) 0.5 if the indicator of the costs of the investment is lower than 0.5;

b) the indicator of the costs of the investment, if that indicator is not lower than 0.5 and not higher than 0.7;

c) 0.7, if the indicator of the costs of the investment is higher than 0.7.

[The indicator of the costs of the investment is defined in section 2(12) as a ratio of the costs of the thermo-modernisation or renovation investment which fulfils the criteria set out in section 10(1), calculated in relation to 1 square metre of the residential building’s usable area, the price for 1 square metre of the residential building’s usable area as established for the purposes of the calculation of a “guarantee refund” (premia gwarancyjna) – a kind of a loan refund granted by the State to persons who, prior to the transformation to the market economy had savings plans for acquiring a flat from a housing cooperative.]

w – the value of the indicator of the costs of the investment in the municipality on whose territory the building is located as of the date on which an application for a loan has been made;

n – number of rented flats in the building;

pui – usable area of an i-th rented flat;

mi – the period, expressed in months, during which an i-th rented flat was subject to the restrictions referred to in section 2(12), from 12 November 1994 to 25 April 2005, and if the building has not been acquired through succession after 12 November 1994, from the date of acquisition to 25 April 2005.”

26. Under section 19, the State Economy Bank is to transfer refunds to the lending bank if the project is carried out within the time-limit set out in the loan agreement.

Section 19 provides:

“ The State Economy Bank shall transfer a compensatory refund [to the lending bank] after the amount of the loan spent [has reached the level of] the renovation refund granted.”

Section 20 provides that the State Economy Bank is to keep an electronic database register of buildings in respect of which refunds have been granted.

(b) Operation in practice in 2008-2009

27. According to reports published in the Polish press in September 2009, no landlord had by that time taken advantage of the compensatory scheme under the 2008 Act. There were only 5 banks cooperating with the State Economy Bank and involved in the scheme. In contrast, 15 banks offered loans that included thermo-modernisation or renovation refunds. As the Ministry for Infrastructure stated, most banks were not interested in giving loans that included a compensatory refund. The Ministry intended to propose amendments to the 2008 Act whereby landlords who had made investments would be able to profit from the scheme, irrespective of whether they had taken out a loan for this purpose.

(c) The March 2010 Amendment

28. On 5 March 2010 Parliament adopted the Act of 5 March 2010 on amendments to the Law on Supporting Thermo-Modernisation and Renovations (ustawa o zmianie ustawy o wspieraniu termomodernixacji i remontów) (“the March 2010 Amendment”). It entered into force on 7 June 2010.

29. In so far as relevant, section 10 (as amended) currently provides:

“ “1. An investor, a physical person who is an owner of a residential building in which there is at least one dwelling subject to the rent-control scheme or an owner of part of a residential building and who, on 25 April 2005, was the owner of this residential building or this part of the residential building or heir of a person who was the owner on that date – shall be entitled to a compensatory refund.

...

3. A compensatory refund in respect of a residential building or part of a residential building shall be granted only once.

4. A compensatory refund shall be designated for the reimbursement of entire or partial costs of:

1) a renovation project; or

(2) the renovation of a one-family house.”

30. New subsections 4 and 5 were added to section 12, enabling a landlord to obtain a compensatory refund without the need to take out a bank loan for the investment. In so far as relevant, the amended section 12 currently provides:

“4. If [an investor] intends to carry out a renovation project or renovation referred to in section 10(4) entirely on the basis of financial resources other than a bank loan in connection with which a thermo-modernisation or renovation refund has been granted, he shall make an application for a compensatory refund directly to the [State Economy Bank].

5. In cases referred to in subsection 4, the requirements laid down in section 7(1)1), (2) and (3) 1 shall not apply [the relevant requirements comprise particular conditions that must be fulfilled by other persons wishing to take advantage of the refunds scheme under the 2008 Act, such as a reduction in or savings of energy consumption that must result from a given renovation].”

31. In order to obtain a compensatory refund, a landlord must attach to his application certified copies of documents confirming that his property was subject to the rent-control scheme and indicating the relevant period or periods during which restrictions applied. Also, he must submit documents showing the extent of the renovation work and the estimated cost of the investment.

32. Under the amended section 19(4), the State Economy Bank is to transfer a compensatory refund to the investor after he has incurred expenses arising from the renovation project, in accordance with the indicated extent of the work. The compensatory refund may not exceed the costs of the investment.

33. As a result of the above amendments, a landlord can choose between an ordinary or simplified procedure for obtaining a compensatory refund.

In the ordinary procedure, it is necessary to take out a loan for the planned investment and to fulfil the requirements laid down in section 7 of the 2008 Act with regard to the reduction in energy consumption that must result from a given renovation project. A detailed building plan and construction or energy audit are also required. The minimum cost of the investment must reach the statutory threshold, which is determined by reference to the so-called “indicator of the costs of the investment” (see the components of the mathematical formula for the calculation of the compensatory refund in paragraph 24 above). This indicator may not be lower than 0.05 and higher than 0.7, which in practice means that the refund is available only in respect of substantial investments. A landlord may take advantage of compensatory and renovation refunds or compensatory and thermo‑modernisation refunds at the same time. On termination of the project, the State Economy Bank transfers the money to the lending bank, which deducts the relevant amount from the loan.

In the simplified procedure, a landlord may invest his own money or find sources of finance for the project other than a bank loan. An application must be supported by documents indicating the extent and cost of the planned works, but no building plan, construction or energy audit is required. There is no specific requirement with regard to the cost of the planned investment, but it must be at least equal to or higher than the compensatory refund available to the person concerned. The landlord deals directly with the State Economy Bank in seeking authorisation for and payment of the refund.

A landlord who has chosen the simplified procedure may, if he fulfils the relevant requirements, take advantage of a renovation or thermo-modernisation refund at a future date.

34. The authorities have disseminated detailed information about the conditions for compensatory refunds to persons affected by the operation of the rent-control scheme and a comprehensive explanation of the mathematical formula and its respective components. They also made an information technology system available to potential applicants on the website of the State Economy Bank (), enabling them to calculate or make a simulation of their refund with the help of a special calculator. All the necessary data (applicable conversion indexes, relevant indicators of the reconstruction value of one square metre of the usable area of residential buildings in all regions of Poland, prices for one square metre of a building at a given time and all other relevant statistical information) are also available on the website. Applicants also have at their disposal PDF texts of the 2008 Act, the March 2010 Amendment, the Rules for Investors (Regulamin dla Inwestorów), and two standard application forms for obtaining a compensatory refund – one for the ordinary procedure and one for the simplified procedure.

35. The explanation of the mathematical formula describes, in simple terms, the steps that are to be followed by an applicant in order to calculate the amount of the refund. To this end, applicants indicate the cost of the planned investment, the total usable area of the building in question, the surface area of the flats that were subject to the rent-control scheme and the period during which restrictions applied. After uploading the relevant statistical information giving the price per square metre of their building at the time of lodging an application and an indicator of the reconstruction value of one square metre of the building in the region in question, they obtain the amount of the compensatory refund available.

By making a simulation of the approximate costs of a renovation project, applicants may determine the amount of the available compensatory refund in such a way that it would cover all the costs involved in the investment.

(d) Calculations of hypothetical compensatory refunds supplied by the Government

36. The Government, at the Court’s request, supplied several calculations of hypothetical compensatory refunds in respect of various notional properties situated in the different regions in Poland which, for the purposes of the simulation, were considered to have been subject to the rent‑control scheme for the entire period referred to in the 2008 Act.

The amount varied depending on the specific features of the property and level of the expenses to be incurred. For instance, as of the end of January 2010 an owner of a tenement house in Łódź, with a total surface area of 780 m2 and comprising 12 flats which were all subject to the rent-control scheme for the entire statutory period (12 November 1994 – 25 April 2005) and who would incur expenses of 150,000 Polish zlotys (PLN) (approx. 36,800 euros (EUR)) for a renovation project, would be entitled to a compensatory refund amounting to PLN 366,912 (approx. EUR 90,000). This refund, if recalculated with the help of the calculator accessible via the State Economy Bank’s website, would amount to PLN 393,530 (approx. EUR 96,500) in December 2010; however, since the maximum refund available cannot be higher than the costs of the investment, the landlord would receive PLN 150,000.

If only 6 flats with a total surface area of 490 m2were subject to the rent-control scheme over the relevant period, the compensatory refund would decrease to PLN 230,496 (approx. EUR 56,500) which, given the statutory ceiling, would not change the amount of the reimbursement.

37. The Government were also asked to supply the figures for the refund in a situation where the statutory cut-off date was not 25 April 2005 but 1 January 2007, the date of entry into force of the December 2006 Amendment (see paragraph 8 et seq. above). As of the end of January 2010, such a hypothetical refund would amount to PLN 425,152 (approx. EUR 104,000). The comparison with the refund as determined under the 2008 Act (PLN 366,912) shows a difference of some 15-16%.

(e) Operation of the March 2010 Amendment in practice

38. According to the Government, from 7 June 2010, the date of the March 2010 Amendment’s entry into force, to the end of October 2010, forty-one applications for a compensatory refund had been lodged with the State Economy Bank, of which 12 were granted and the remainder required supplementary information. No application has been rejected and the total amount of refunds granted was PLN 750,000 (approx. EUR 184,000). In contrast, in 2009 only one application was made – and granted.

COMPLAINT

39. The applicants complained that the continued various restrictions on their property rights, including the control of rent increases, limitations on lease termination and vacation of flats, and also defective rules for the recovery of their property maintenance costs imposed on them by successive laws, in particular the 2001 Act, amounted to a breach of Article 1 of Protocol No. 1 to the Convention.

THE LAW

A. Scope of the case before the Court

1. Questions put to the parties by the Court

40. When giving notice of the application to the respondent Government under Rule 54 § 2 (b) of the Rules of Court, the Court referred, in particular, to two points. First, it made reference to the laws adopted after the delivery of the merits and friendly-settlement judgments in the Hutten-Czapska v. Poland case, in particular the December 2006 Amendment, the 2006 Act, the August 2007 Amendment and the 2008 Act. Furthermore, the Court referred to the compensatory scheme under the 2008 Act, providing redress for the Convention violation to landlords affected by the operation of the laws found to be incompatible with Article 1 of Protocol No. 1 in the Hutten–Czapska pilot judgment.

In this connection, it invited the parties to state whether, having regard to the above-mentioned laws, Convention claims under Article 1 of Protocol No. 1 of the applicants and other similarly situated Polish landlords’ had been satisfied at domestic level and, in consequence, whether “the matter ha[d] been resolved” within the meaning of Article 37 § 1 (b) of the Convention and whether, having regard to the features of the compensatory scheme under the 2008 Act, the redress offered by the State for the systemic violation of Article 1 of Protocol No. 1 was satisfactory.

41. Accordingly, the Court’s examination of the case is limited at this stage to the issue of whether or not it is justified to apply Article 37 § 1 of the Convention.

2. Individual and general dimension of the case

42. The present case, originally lodged by 239 Polish landlords and currently pursued by 96 applicants, and the related case of Piotrowski v. Poland and the remaining 24 similar adjourned cases currently on the Court’s docket, originated in the same structural shortcoming that was found by the Court in the Hutten–Czapska case to be at the root of its finding of the violation of Article 1 of Protocol No. 1. That shortcoming was defined as “a systemic problem connected with the malfunctioning of domestic legislation in that: (a) it [had] imposed, and continue[d] to impose, restrictions on landlords’ rights, including defective provisions on the determination of rent; [and] (b) it [had] not and still [did] not provide for any procedure or mechanism enabling landlords to recover losses incurred in connection with property maintenance” (see Hutten-Czapska (merits), cited above, the third operative provision of the judgment).

The Court perceived the problem as “a combination of restrictions on landlords’ rights, including defective provisions on the determination of rent, which [had been] and still [wa]s exacerbated by the lack of any legal ways and means enabling them at least to recover losses incurred in connection with property maintenance, rather than as an issue solely related to the State’s failure to secure to landlords a level of rent reasonably commensurate with the costs of property maintenance” (ibid. § 237).

In that connection, it directed that “in order to put an end to the systemic violation identified in the present case, the respondent State must, through appropriate legal and/or other measures, secure in its domestic legal order a mechanism maintaining a fair balance between the interests of landlords and the general interest of the community, in accordance with the standards of protection of property rights under the Convention” (ibid. the fourth operative provision of the judgment).

In consequence, the Court, applying the pilot-judgment procedure in the individual applicant’s case, not only recognised the Convention violation in respect of all actual and potential applicants who found themselves in a similar situation but also made clear that general measures at national level were called for in execution of the judgment and that those measures should take into account the other persons affected and remedy the systemic defect underlying the Court’s finding of a violation.

B. Application of the pilot-judgment procedure

43. The object of the Court’s designating a case for a “pilot-judgment procedure” is to facilitate the speediest and most effective resolution of a dysfunction affecting the protection of the Convention right in question in the national legal order.

The pilot-judgment procedure is primarily designed to assist the Contracting States in fulfilling their role in the Convention system by resolving problems at national level, thereby securing to the persons concerned their Convention rights and freedoms as required by Article 1 of the Convention, offering to them more rapid redress but also, at the same time, making it unnecessary for the Court to adjudicate on large numbers of applications similar in substance which it would otherwise have to take to judgment (see Broniowski (friendly settlement), [GC], no. 31443/06, § 35, ECHR 2005-IX; Hutten-Czapska (merits), cited above §§ 231-234; and Wolkenberg and Others v. Poland (dec.) no. 50003/99, 4 December 2007, §§ 34-35, ECHR 2007‑XIV).

44. Another important aim of this procedure is to induce the respondent State to resolve large numbers of individual cases arising from the same structural problem at the domestic level, thus implementing the principle of subsidiarity which underpins the Convention system. Indeed, the Court’s task as defined by Article 19, that is, to “ensure the observance of the engagements undertaken by the High Contracting Parties in the Convention and the Protocols thereto”, is not necessarily best achieved by repeating the same findings in a large series of cases (see E.G. and 175 Other Bug River applications v. Poland (dec.), no. 50425/99, § 27, ECHR 2008-...; and Suljagić v. Bosnia and Herzegovina (no. 27912/02), § 62, ECHR 2009-...).

The respondent State’s action should primarily aim at the resolution of the systemic dysfunction found in the pilot judgment and at the introduction, where appropriate, of effective domestic remedies in respect of the violations in question. If, however, the respondent State fails to adopt such measures following a pilot judgment and continues to violate the Convention, the Court will have no choice but to examine the remaining cases pending before it and to take them to judgment so as to ensure effective observance of the Convention (see E.G. v. Poland, cited above, § 28; and Suljagić, ibid.).

45. This adjudicative approach is pursued with due respect for the Convention organs’ respective functions. While it falls to the Committee of Ministers to evaluate the implementation of individual and general measures under Article 46 § 2 of the Convention (see Broniowski (friendly settlement), cited above, § 42; Hutten-Czapska v. Poland (friendly settlement) [GC] no. 35014/97; 42, ECHR 2008 ...; and Suljagić, cited above, § 61) the Court, in its examination of follow-up cases after the adoption of the pilot-judgment, has the power to decide whether, in view of the remedial action taken by the State, the matter giving rise to the Convention complaints in those cases “has been resolved” for the purposes of Article 37 of the Convention and whether or not it is justified to continue the pilot-judgment procedure (see Wolkenberg and Others cited above, § 77; and E.G., cited above, §§ 25-29).

46. Thus, it is inherent in the pilot-judgment procedure that the Court’s assessment of the situation complained of in a “pilot” case necessarily extends beyond the sole interests of the individual applicant and requires it to examine that case also from the perspective of the general measures that need to be taken in the interest of other potentially affected persons (see Hutten-Czapska (merits), cited above, § 238; Broniowski (friendly settlement), cited above, § 36; and Hutten-Czapska (friendly settlement), cited above, § 33).

The same logic applies to the Court’s interpretation of the notion of “respect for human rights as defined in the Convention and the Protocols thereto” in cases dealt with in the context of this procedure, where the Court, in determining whether it can strike the application out of its list pursuant to Article 37 § 1 (b) of the Convention on the ground that the matter has been resolved, will have regard not only to the applicant’s individual situation but also to measures aimed at resolving the general underlying defect in the domestic legal order identified in the principal judgment as the source of the violation found (see Wolkenberg and Others, cited above, § 35; and, mutatis mutandis, Broniowski (friendly settlement), cited above, § 36-36 and Hutten-Czapska (friendly settlement), cited above, § 35).

47. In consequence, the ruling in the present case, chosen by the Court for the examination of the issue whether or not it is justified to apply Article 37 § 1 of the Convention and to continue the pilot-judgment procedure initiated in the Hutten-Czapska case, will have consequences for all the similar adjourned cases.

C. Application of Article 37 of the Convention

48. In so far as relevant, Article 37 provides:

“1. The Court may at any stage of the proceedings decide to strike an application out of its list of cases where the circumstances lead to the conclusion that

...

(b) the matter has been resolved; ...

However, the Court shall continue the examination of the application if respect for human rights as defined in the Convention and the Protocols thereto so requires.

2. The Court may decide to restore an application to its list of cases if it considers that the circumstances justify such a course.”

1. The parties’ submissions

(a) The Government

49. The Government submitted that in implementation of the Hutten-Czapska pilot judgment on the merits and the friendly-settlement judgment, they had taken a number of legislative initiatives aimed at resolving the systemic problem identified in that case and at providing similarly affected persons with redress for the violation of their right of property. As a result, several new or amending laws had been enacted by the Polish Parliament in the period from December 2006 to March 2010.

(i) As regards global solutions aimed at resolving the systemic problem identified in the pilot judgment

50. The Government first referred to the December 2006 Amendment, stressing that it had had an important, positive impact on the property rights of landlords. In line with directives emanating from the Constitutional Court’s judgment of 19 April 2005 and its June 2005 Recommendations[3], they had introduced a clear definition of expenses incurred in the maintenance of rented property and a rule that they had to be covered by the rent derived from a flat. It further expressly laid down that a landlord was entitled to increase rent to an amount covering not only maintenance costs but also to secure a return on capital investment and a fair – decent – profit from the lease of the property.

Moreover, in order to compensate loss of rent incurred by landlords in consequence of delays on the part of the authorities in providing social accommodation to protected tenants in respect of whom eviction orders had been issued, section 18(5) of the December 2006 Amendment had explicitly made the authorities liable for any damage sustained in this connection. In particular, it had enabled landlords to recover the difference between the rent paid by a tenant and a freely-determined and market-related rent.

51. In turn, the 2006 Act was enacted in order to stimulate investment in the construction of social accommodation and the adaptation, development and renovation of municipal buildings with residential dwellings. In enacting this law, the State had recognised the problems faced by municipalities responsible for providing council flats to persons entitled to such accommodation under court judgments ordering their eviction from privately-owned flats and for securing shelter for destitute and homeless persons.

The 2006 Act had introduced a system of State subsidies, amounting to 30-50% of the costs of investment available to the municipalities and other entities referred to in the law. These measures were aimed at gradually enlarging the existing pool of municipal property designated for social accommodation and ensuring a more efficient provision and distribution of low-rent flats for the less well-off, who had previously occupied privately-owned dwellings subject to the former rent-control scheme.

52. The August 2007 Amendment had subsequently introduced a new tool for monitoring the levels of rent in Poland – the so-called “rent mirror”, the purpose of which was to ensure transparency of rent increases and facilitate the determination of rent and other charges in individual lease agreements concluded in a given locality. This tool was also used by civil courts dealing with disputes on rent increases initiated by tenants who did not accept increases made by landlords. Its aim was to provide the courts with reliable data enabling them to assess the justification for such increases. The operation of this mechanism was continually monitored by the Ministry for Infrastructure.

53. The Government further pointed out that, on their initiative, Parliament had adopted the December 2009 Amendment to the 2001 Act introducing the so-called “occasional lease” – a lease based on a fully contractual and market-related rent, to be freely determined by the parties. All owners who were physical persons and did not conduct a business activity involving the lease of flats could take advantage of this possibility. Most provisions of the 2001 Act, in particular those regarding the protection of tenants, conditions for rent increases, termination of lease agreements and restrictions on evictions, did not apply to the occasional lease. As a result, the owner of an unoccupied flat could conclude a lease agreement based on flexible rules and, as a prospective tenant was required to make a notarised declaration that he would vacate the flat on termination of the lease, the procedure for eviction was simplified and did not depend on the provision of social accommodation to the tenant.

54. The Government stressed that the above-mentioned measures had been adopted to ensure the speediest and most effective implementation of the Hutten-Czapska pilot judgment and had fundamentally changed the previous system of housing laws, found by the Court to have been in violation of Article 1 of Protocol No. 1 to the Convention. They emphasised that those measures had been taken as part of the ongoing process of systemic transformation of the country and had had to achieve a balance between the interests of landlords and tenants. Thus, pursuant to paragraph 239 of the pilot judgment, containing the Court’s directives on the general measures to be applied in order to put an end to the systemic violation of the right of property, the Polish State had been obliged “through appropriate legal and/or other measures, to secure in its domestic legal order a mechanism maintaining a fair balance between the interests of landlords, including their entitlement to derive profit from their property, and the general interest of the community – including the availability of sufficient accommodation for the less well-off – in accordance with the principles of the protection of property rights under the Convention”.

55. The Government further underlined that the Court had expressly acknowledged in the pilot judgment the need to balance the conflicting interests of landlords and tenants, holding in paragraph 225 that “the Polish State, which [had] inherited from the communist regime the acute shortage of flats available for lease at an affordable level of rent, had to balance the exceptionally difficult and socially sensitive issues involved in reconciling the conflicting interests of landlords and tenants” and that it “had, on the one hand, to secure the protection of the property rights of the former and, on the other, to respect the social rights of the latter, often vulnerable individuals”. Accordingly, in the light of the Court’s directives, the domestic authorities had been required to take steps that were aimed not only at erasing the consequences of the breach of the Convention for landlords, but also at improving the general housing situation in Poland through the allocation of substantial financial resources from the State budget for the construction of new residential buildings, the renovation of existing property and other means of stimulating investment in social accommodation.

56. In the Government’s opinion, those tasks had been successfully carried out and the underlying systemic problem identified in the pilot judgment and defined by the Court as “a combination of restrictions on landlords’ rights, including defective provisions on the determination of rent, which was and still is exacerbated by the lack of any legal ways and means enabling them at least to recover losses incurred in connection with property maintenance” had been satisfactorily resolved at domestic level.

(ii) As regards redress for persons affected by the systemic violation of Article 1 of Protocol No. 1

57. In addition to the general solutions addressing the systemic problem, the authorities had also secured to injured persons redress for the past violation of their property rights on account of the operation of the rent‑control scheme.

In discharging their obligation to secure such redress, which they had taken upon themselves under the terms of the friendly-settlement agreement concluded in respect of just satisfaction under Article 41 of the Convention in the pilot case, the Government had submitted to Parliament a Bill on Supporting Thermo-Modernisation and Renovations. It had been adopted shortly after the conclusion of the friendly settlement. The 2008 Act had entered into force on 19 March 2009 and had introduced a system of refunds financed by the State budget and designated for the partial reimbursement of loans taken out by owners of tenement houses in connection with thermo‑modernisation and renovation projects. The money earmarked for this purpose had been allocated to the Renovation and Thermo‑Modernisation Fund, administered by the State Economy Bank. Although any owner of a tenement house or one-family house could take advantage of renovation or thermo-modernisation refunds, each amounting to up to 20% of loans taken out for such projects, owners affected by the operation of the previous rent-control scheme could also apply for the so-called “compensatory refund”.

The Government maintained that this special entitlement was based on the “principle of usefulness”, as the granting of the refund was connected with the modernisation of tenement houses. It also constituted a form of State financial assistance for landlords, enabling them to mitigate the consequences of the deterioration of their property caused by insufficient rent in the past and the resultant lack of proper maintenance and impossibility of carrying out necessary repairs and renovations.

58. The compensatory refund was calculated on the basis of several factors, related to a property’s features and locality, and was available in respect of the period from 12 November 1994 to 25 April 2005. The first date had been taken by the Court itself as the beginning of the period of the operation of the rent-control scheme in Poland for the purposes of its ruling in the pilot case. The second date was the one on which the Constitutional Court’s judgment of 19 April 2005 had entered into force. It had been chosen by the Government since, in their view, that ruling had marked the end of the rent-control scheme in Poland, particularly as it had struck down the provisions of the 2004 Amendments restricting increases in rent that exceeded 3% of the reconstruction value of the dwelling to a maximum yearly ceiling of 10% of the current rent.

59. Lastly, the Government referred to amendments to the 2008 Act which, at the time of filing their observations, they intended to propose to Parliament. The Government’s proposal – which was later accepted, as Parliament had enacted the March 2010 Amendment (see paragraphs 27‑36 above) – had been prompted by an assessment of the operation of the refunds scheme in practice. It had emerged from reports obtained from the Ministry for Infrastructure, which monitored the functioning of the scheme on a regular basis, that making the granting of compensatory refunds conditional on previously taking out a loan and limiting their availability to large-scale renovation projects constituted serious practical obstacles for entitled persons. Moreover, it had become apparent that the global banking crisis could generally undermine the Government’s renovation and thermo-modernisation programme. In the circumstances, it had been decided to simplify the procedure for granting compensatory refunds. While a landlord could still profit from a double advantage in respect of important, more costly renovations – a renovation or thermo-modernisation refund coupled with a compensatory refund, to be paid against a loan taken out for this purpose, it would become open for persons who wished to carry out smaller-scale renovations to obtain a compensatory refund without borrowing money from the bank and without renouncing entitlement to a renovation or thermo-modernisation refund. Those refunds could be granted at a future date. Other requirements would also be relaxed; a renovation project would not have to be aimed at achieving energy savings, a landlord would no longer be obliged to produce a building plan and a construction or energy audit and it would suffice for him to submit documentation indicating the scale and estimated costs of the investment.

In order to encourage potential applicants the authorities had disseminated, through the State Economy Bank’s official website, comprehensive information about the possibility of receiving compensatory refunds. This included an explanation of the mathematical formula for the calculation of a compensatory refund. In this connection a special tool – “a calculator” - was created, with the help of which an entitled person could make a simulation of a refund based on the estimated costs of the investment. Using the calculator an investor could adjust the costs in such a way that the refund would cover them in their entirety. Further amendments would make compensatory refunds available to persons owning part of a tenement house, which should facilitate the procedure for co-owners of properties with a complicated ownership structure, belonging to several heirs, who would then be able to receive refunds independently, without the need for joint investment.

In sum, the amendments eliminated all the perceived shortcomings of the compensatory scheme, making it fully accessible to victims of the systemic violation found in the pilot judgment and providing them with sufficient just satisfaction for the purposes of Article 41.

(iii) Conclusion

60. The Government concluded that the above-mentioned laws, which had been adopted with a view to securing a rapid and effective implementation of the Court’s directives laid down in the pilot judgment, had effectively removed obstacles to the peaceful enjoyment by Polish landlords of their property rights. They had consequently eliminated the underlying systemic problem identified in that judgment.

In turn, the 2008 Act, in particular after it had been amended, provided injured persons with satisfactory redress for past violations at domestic level.

Accordingly, the purpose of the pilot-judgment procedure had been achieved and the Convention claims of the present and potential applicants would be best resolved by the means that had been put in place in the national legal order, not in an international procedure before the Court. Otherwise, the Court’s role in the pilot-judgment procedure – which was, as it had repeatedly held, to identify structural or systemic problems and assist the States in resolving such problems at national level by offering redress to applicants – would be seriously undermined. In this regard, the Government relied on the above-cited Wolkenberg decision, in which the Court had stated that its role after delivery of the pilot judgment and after the State had implemented the general measures in conformity with the Convention could not be converted into providing individualised financial relief in repetitive cases arising from the same systemic situation.

In view of the foregoing, the Government invited the Court to strike the application out of its list of cases on the ground that the matter giving rise to the applicants’ complaints had been resolved within the meaning of Article 37 § 1 (b) of the Convention.

(b) The applicants

61. The applicants disagreed. A substantial part of their submissions concerned the restrictions imposed on the property rights of landlords under the laws found to have been in breach of the Convention in the pilot judgment. In particular, they referred to the background to the 2001 Act and the defective provisions of that act. They stressed that it was important to consider the past limitations in the context of the present-day situation because their financial and legal consequences extended beyond the time during which they had operated. Indeed, it had been the former state of affairs which had led to the situation where their properties had fallen into disrepair and diminished significantly in value.

The 2001 Act had so far been in force for 10 years and, as demonstrated by a series of Constitutional Court judgments which repeatedly found the Act’s various provisions to be unconstitutional, had not met the standards of the protection of property rights set forth in the Polish Constitution. Over that period the Act had been amended several times, often hastily and perfunctorily. Notwithstanding the many amendments and the Government’s various legislative actions, the State had still failed to adopt any satisfactory, comprehensive solution that would secure a fair balance between the interests of landlords and tenants.

(i) As regards global solutions aimed at resolving the systemic problem identified in the pilot judgment relied on by the Government

62. The applicants considered that the laws adopted in 2006-2010 and referred to by the Government could not be seen as a satisfactory resolution of the underlying systemic problem indentified in the Hutten-Czapska pilot‑judgment.

They first referred to the 2001 Act, submitting that despite a number of amendments it still maintained restrictive provisions on the termination of leases and eviction of tenants. Section 11(2)2 of the 2001 Act[4] allowed a landlord to terminate a lease only if a tenant had fallen into rent arrears for three full consecutive months and only if the landlord had also given the tenant one further month to pay off the arrears and the current month’s rent. In other words, a landlord could give one month’s notice only . During that period the tenant would usually pay no rent at all. Moreover, pursuing an action for eviction was subject to considerable court fees. Such proceedings would normally last around eighteen months. Their termination would not, however, change the situation much, since the execution process would take a further six to seven years and tenants would still pay no rent. More often than not the execution of an eviction order would be suspended by the court until a tenant had been provided with social accommodation by the municipality – which could take a very long time, given the scarcity of council flats available. For instance, in Łódź alone three thousand families were waiting to be allocated social accommodation under final eviction orders. In practice, for many years a tenant would occupy the flat at the landlord’s expense. This, in the applicants’ view, amounted to impunity for tenants.

In this context, the mere possibility of suing a municipality before a civil court to seek damages arising from its failure to provide the tenant with social accommodation was not a satisfactory solution to the problems faced by landlords, considering the high court fees and costs involved as well as the anticipated length of the proceedings.

63. Similarly, the applicants did not see how their situation could be improved by the introduction of the occasional lease. This form of lease was almost unused, largely on account of fiscal burdens. In any event, it had been designated for owners of single flats who did not occupy them, rather than for landlords who, like the applicants, were members of an association and generally had more than one flat for rent.

In sum, it could not be said that the Polish State had secured in the domestic legal order a “mechanism maintaining a fair balance between the interests of landlords and the general interests of the community in accordance with the standards of protection of property rights under the Convention”, as the Court had directed in the pilot judgment.

(ii) As regards redress for persons affected by the systemic violation of Article 1 of Protocol No. 1 available under the 2008 Act

64. Referring to the refunds introduced by the 2008 Act, the applicants agreed that, in theory, these could have improved the landlords’ situation as they had been designed to compensate for the continued insufficient rent and encourage them to invest in their property and carry out renovation work, thus modernising long-neglected buildings and improving their technical condition. In practice, however, the authorities had made the granting of refunds subject to so many strict requirements that in consequence only one landlord had taken advantage of the refund scheme in the first year following the 2008 Act’s entry into force.

65. Firstly, as confirmed by the Government, renovation refunds were not available in respect of relatively small renovation projects, which meant that a landlord had no real choice as to the scale of his investment. After having been deprived by the State of income from the lease of his property for many years, a landlord was effectively forced either to undertake a major overhaul of his property and take out a large, long-term loan from one of the few authorised banks or to give up his entitlement.

Secondly, taking out a loan for the investment was in any event a statutory condition imposed on a landlord, since the refunds were paid only in the form of partial reimbursement of loans and only after termination of the project. Given that, on average, there was at least one tenant in every tenement house who failed to pay rent, the generally poor state of those houses and the need to provide the bank with satisfactory security for a loan, the prospects of borrowing a substantial sum of money were very low. In addition, taking out a loan involved a high financial risk for landlords because, should their rental income not suffice to repay instalments, they would risk becoming bankrupt.

66. The applicants also criticised the statutory ceiling on the maximum refund available. Assuming that an entitled person took out a loan covering 100% of the investment costs, he could obtain a renovation refund for up to 20% of the loan already spent but, at the same time, two further statutory restrictions reduced the amount obtainable: a refund could not exceed 16% of the investment costs and the value of 2-year energy savings as determined by an energy audit. In consequence, the refund eventually received would in reality be only of a symbolic nature.

Furthermore, the applicants maintained that it should be borne in mind that the State Economy Bank had at its disposal restricted financial resources for annual allocation to the Thermo-Modernisation and Renovation Fund; these were subject to the maximum annual limits applicable to each type of refund. This meant that if the limits were reached the granting of refunds would have to be temporarily suspended.

67. Lastly, referring to the June 2010 Amendment, the applicants pointed out that the changes adopted recently were illusory and did not make refunds more accessible in practice. It was true that the procedure for granting compensatory refunds had been simplified and that, to obtain such refunds, landlords were no longer required to take out a loan since they could finance the investment from “other sources”. However, no such sources were in reality available, since there was no other system of State assistance or subsidies for landlords. It was common knowledge that, after many years of enduring the restrictions and economic burden of the rent-control scheme imposed by the State and being unable to maintain their property in a proper state, landlords had at their disposal only scarce, if any, financial resources of their own. In these circumstances, the means for redressing the violation of their Convention right advanced by the Government were available only in theory and were devoid of any meaningful effect.

(iii) Conclusion

68. In conclusion, the applicants submitted that the Polish State had failed to adopt satisfactory measures, capable of removing the restrictions on their property rights and of providing them with redress for the violation of Article 1 of Protocol No. 1, as directed in the pilot judgment. Accordingly, in so far as their Convention claims were concerned, the matter had not been “resolved” within the meaning of Article 37 § 1 (b). They asked the Court to continue the examination of their cases and to find a violation of their right of property.

2. The Court’s assessment

(a) Amendments to Polish legislation

69. It is common ground that in the years 2006-2010 the Polish State enacted several laws in the area of housing, whose aim was to ensure the implementation of the general measures indicated by the Court in the Hutten-Czapska pilot judgment on the merits of 19 June 2006 (see paragraphs 49 and 61 above). However, the parties disagreed in their assessment of the impact that those laws had had on the property rights of landlords. The Government maintained that the underlying systemic problem identified in the pilot case had been eliminated as the situation had been brought into line with the Convention standards, whereas the applicants argued that the amending and new statutes had had only negligible effects on their general situation (see paragraphs 50-56 and 62-63 above).

70. In the Hutten-Czapska friendly-settlement judgment of 28 April 2008 the Court has already had regard to certain new developments at domestic level in the context of general measures covering other persons affected by the systemic violation, referred to in the Government’s declaration, which constituted an integral part of the settlement (see Hutten-Czapska (friendly settlement), cited above, §§ 27 and 37-43).

With regard to the December 2006 Amendment and the introduction of new provisions governing rent increases, the Court found as follows:

“In particular, the new provisions introduced by the December 2006 Act clarifying the criteria for rent increases and enabling landlords to increase rent in order not only to cover costs of maintenance of property but also to receive a return on capital investment and “decent profit” seem to remove the previous legal obstacles to raising rent above rigid statutory percentage ceilings based solely on the so-called “3% reconstruction value of the dwelling”, whatever the particular condition or characteristics of property. While the said “3%” remains as one of the points of reference, an increase in rent in order to secure “decent profit” has been recognised as a “justified case” where a landlord may legitimately raise the rent (see paragraphs 15-17). This, in comparison to the previous situation as described in the principal judgment (see Hutten-Czapska, cited above, §§ 71-146), must be seen as a significant improvement.”

Furthermore, it noted that the new rules in section 18(5) of the 2001 Act, enlarging the scope of the municipal authorities’ civil liability for failure to provide protected tenants with social accommodation had “enable[d] landlords to recover compensation for losses incurred in that connection” and that this measure, in combination with the development of social accommodation under the 2006 Act, could be seen as “evidently designed to remove the effects of the previous and remaining restrictions on the termination of leases and the eviction of tenants”, even though the results of the State’s subsidies in that field would “be seen only in a longer time‑frame” (ibid., § 41).

It was also noted that, by virtue of the August 2007 Amendment, the Polish State had introduced an information system for monitoring levels of rent within Poland, as a tool designed to assist civil courts in resolving disputes arising from rent increases by landlords (ibid. § 37).

71. In reviewing those legislative measures in the present-day situation and in the context of the instant case, the Court finds no reason to depart from the findings made in the friendly-settlement judgment.

In that connection, the Court would recall that in the pilot judgment on the merits it held that “the violation of the right of property in the present case is not exclusively linked to the question of the levels of rent chargeable but, rather, consists in the combined effect of defective provisions on the determination of rent and various restrictions on landlords’ rights in respect of termination of leases, the statutory financial burdens imposed on them and the absence of any legal ways and means making it possible for them either to offset or mitigate the losses incurred in connection with maintenance of property or to have the necessary repairs subsidised by the State in justified cases” (see Hutten‑Czapska, cited above, § 224; see also paragraph 42 above).

In the Court’s view, amended section 8a (4) of the 2001 Act (see paragraphs 10-11 above), stipulating that any increase in rent intended to cover the costs of maintenance and to secure to a landlord a gradual, statutorily-determined return on capital investment for the construction, purchase or the permanent improvement of property and a so-called “decent profit” is ipso iure justified and seems to have adequately addressed the previous lack of legal rules for recovery of costs of maintenance (see also the third operative provision of the merits judgment). It has also created the legal and practical conditions for landlords to reclaim expenses incurred in connection with the acquisition and modernisation of their property and put in place safeguards designed to protect their right to derive profit from rent (see Hutten–Czapska, cited above, § 239).

72. The applicants, who did not express any overt criticism of the new rules on rent increases, underlined that the restrictions on the termination of leases and evictions had not been lifted. In particular, they referred to a number of legal and practical obstacles faced by landlords in the procedure for the vacation of flats occupied by protected tenants failing to pay rent – such as the length of the procedure, high court fees and the scarcity of social accommodation. This, in their opinion, led to a situation where they could neither regain their property for many years, nor recover the rent due from the tenant (see paragraph 62 above).

It is true that the general conditions for the termination of leases as applicable on the date of the adoption of the pilot judgment are still in force. However, the termination of a lease agreement is now also linked to a tenant’s refusal to accept any rent increase that remains within the statutorily defined limits. One of the elements relevant for the increase is, as stated above, “decent profit” (see paragraphs 11 and 71 above). Alternatively, a tenant may challenge an increase before a civil court but any increase made in compliance with section 8a (4) (a)-(e) of the 2001 Act is bound to be found justified (see paragraph 11 above). In the Court’s view, this solution seems to attenuate at least to some extent the effects of the remaining limitations on the termination of leases and, despite the fact that the impugned provisions remain as such unchanged, can be seen as an element of a “mechanism maintaining a fair balance between the interests of landlords and the general interest of the community”, as referred to in the fourth operative provision of the pilot judgment.

In this regard, the Court would also reiterate that, as it already held in that judgment, the Polish State, which inherited from the communist regime an acute shortage of flats available for lease at an affordable level of rent, had to balance the exceptionally difficult and socially sensitive issues involved in reconciling the conflicting interests of landlords and tenants (see Hutten-Czapska (merits), § 225). For that reason, the process of wiping out all the causes and consequences of the violation of the Convention found in the pilot case must necessarily take place gradually. Having regard to the complexity of that process, involving large-scale policy decisions and important changes to Polish legislation not only in the area of housing but also in regard to social assistance, state-subsidies, construction and land administration, the State cannot be censored for maintaining for the time being the restrictive rules on the termination of leases.

Furthermore, although the applicants seem to consider that a claim for damages under section 18(5) of the 2001 Act read in conjunction with Article 417 of the Civil Code is not a satisfactory solution for recovering losses caused by staggered evictions of protected tenants, they did not support their opinion by any convincing argument capable of showing that that remedy would be ineffective in relation to their pecuniary claims (see paragraph 62 above). In contrast to their contention, the Polish Supreme Court’s case-law clearly confirms that a landlord is entitled to full compensation for any damage sustained on account of a municipality’s failure to provide social accommodation to a tenant (see paragraph 15 above).

73. The Government attached importance to the introduction of the so-called “occasional lease” by virtue of the December 2009 Amendment and stressed that this form of lease was not subject to any provisions on the levels of rent, termination of leases and eviction under the 2001 Act (see paragraph 53 above). The applicants did not see how this could improve their situation as an “occasional lease” was tailored to owners of single flats, not to those owning tenement houses (see paragraph 63 above).

The Court does not consider that at this stage of the pilot-judgment procedure it is called upon to determine what particular effects the December 2009 Amendment, an instrument apparently designed to encourage owners of unoccupied flats to rent them out on the free market, may or may not have on the property rights of landlords. This task falls to the Committee of Ministers which, in fulfilling its function under Article 46 § 2 of the Convention, will have to make its own global evaluation of all the above-mentioned laws in the context of the implementation of the general measures indicated in the pilot judgment (see also paragraph 45 above).

74. For the purposes of the present ruling, it suffices for the Court to conclude that its previous – positive – assessment of the laws introduced by the Polish State, as stated in the friendly-settlement judgment (see Hutten-Czapska (friendly settlement, § 43), is still valid and that, likewise, in the context of this case the State’s remedial action aimed at resolving the systemic problem is a factor relevant to the issue of “respect for human rights as defined in the Convention and the Protocols thereto” within the meaning of Article 37 § 1 of the Convention.

(b) Redress for the violation of the Convention afforded to other persons affected

75. The Court notes at the outset that the remedies under the 2008 Act originated in the respondent Government’s declaration, made at the time of the conclusion of the friendly-settlement agreement in the pilot case, whereby they recognised their obligation to make available to other victims of the systemic violation identified in the pilot judgment “some form of redress for any damage caused to them by the operation of the impugned rent-control legislation” (see Hutten-Czapska (friendly settlement), cited above, § 27).

76. The parties expressed different views on the adequacy of the compensatory scheme introduced by the 2008 Act. The Government submitted that the compensatory refunds afforded to the persons affected at domestic level constituted sufficient just satisfaction for the purposes of Article 41, thereby rendering further examination of this case and other similar cases by the Court no longer justified (see paragraphs 57-60 above). The applicants, who accepted that the scheme could in theory improve their situation, strongly criticised a number of formal and other requirements attached to the entitlement which, in their view, made the entire scheme practically inoperative (see paragraphs 64-66 above).

77. The Court finds that the compensation mechanism devised by the Polish authorities has certain distinctive features in comparison with the usual solutions for affording financial reparation for prejudice sustained. In particular, it first requires a claimant to incur expenses, which may subsequently be reimbursed, partly or entirely only if several further statutory conditions are met (see paragraphs 23-26 and 28-33 above).

As the applicants rightly stated, the general scheme of refunds is founded on the assumption that an entitled person would either obtain a substantial bank loan to cover the necessary investment cost involved in the renovation of a tenement house or have another source of financing the investment, which in some situations might be unrealistic. They also pointed out – as was admitted by the Government – that renovation and thermo-modernisation refunds were available only in respect of very extensive property development and work, the costs of which many persons could barely afford, if at all (see paragraphs 59 and 65-66 above).

78. It is true that the redress system operates on a purely reimbursement basis, linking compensatory and other refunds to completed development projects to modernise property that has fallen into disrepair due to the defective operation of the rent-control system, rather than as a disbursement fund granting payments covering past damage. However, in the Court’s view, this particular aspect does not of itself make it inefficient or inaccessible.

The provisions for compensatory refunds are included in a statute whose essential aim is not to compensate but rather to encourage – through financial incentives – owners to invest in their properties in a manner that would not only boost their value but also result in the reduction of energy consumption (see paragraphs 20-26 and 28-33 above). While the general interest of the community in promoting energy-efficiency measures could well justify this solution, the applicants are right in stating that the requirement to achieve the statutory standards – fixed at a fairly high level –for the minimum cost of the investment and for energy savings necessitated large-scale, costly construction work, not leaving much choice to the owner as to the extent of the development. However, these shortcomings, which were recognised by the Government as early as the first year following the 2008 Act’s entry into force, were promptly eliminated by the March 2010 Amendment (see paragraphs 27-35 above).

79. In particular, the Court notes that the March 2010 Amendment introduced an alternative, simplified procedure for granting compensatory refunds by removing a number of statutory conditions previously attached to the entitlement. Landlords may at present choose between the procedure for granting a compensatory refund in combination with renovation or thermo-modernisation refunds, subject to the above-mentioned strict requirements, and the simplified procedure, aimed solely at obtaining a compensatory refund. The latter choice does not exclude the possibility of claiming one of the other refunds at a later date (see paragraphs 33 and 59 above).

Under the simplified procedure, entitled persons are no longer required to obtain a prior bank loan for the planned investment but may finance it from other sources. They have full discretion as to the scale and costs of their renovation project, since compensatory refunds can be claimed separately, without the need for them to meet the strict technical and other requirements set by the 2008 Act for renovation and thermo-modernisation refunds, such as the rigid indicators of costs of the investment, and the need to achieve a reduction in energy consumption and supply complex technical documentation (see paragraphs 33 and 59 above). More importantly, as there is no minimum amount fixed for the costs of the investment, except for the stipulation that the compensatory refund to be granted cannot be higher than the expenses actually incurred for the renovation, applicants may even, using various simulations, tailor the future costs so as to have them entirely covered by the refund (see paragraphs 33-36 above).

In addition, the authorities made considerable efforts to disseminate information about the availability of compensatory refunds and the relevant procedure through the State Economy Banks’ website. The persons entitled have at their disposal all the necessary data enabling them to calculate – or make a simulation of – their refunds on the basis of the mathematical formula laid down in the 2008 Act, with the help of a special calculator facilitating the use of the formula (see paragraphs 34-35).

Having regard to the above developments, which appear to have addressed adequately all the various points of concern and misgivings voiced by the applicants, the Court concludes that their reservations concerning the practical accessibility of the compensatory scheme are misconceived.

80. There is, however, another aspect of that scheme which was not challenged by the applicants but which the Court raised of its own motion.

Sections 2(13) and 10 of the 2008 Act (see paragraph 23 above), lay down, among other things, that compensatory refunds are available to those persons whose property was subject to the rent-control scheme “during any period between 12 November 1994 and 25 April 2005”. The first date was taken by the Court as the beginning of the period under its consideration in the pilot case, having regard to the Court’s jurisdiction ratione temporis and the actual impact of the impugned housing laws on the applicant’s property rights (see Hutten-Czapska (merits), cited above, §§ 152 and 194). However, the cut-off date of 25 April 2005, on which the Constitutional Court’s judgment of 19 April 2005 entered into force, was, as acknowledged by the Government, selected by the Polish authorities because they considered that that ruling had marked the end of the operation of the restrictions imposed under the rent-control scheme (see paragraph 58 above; see also Hutten-Czapska (merits), cited above, §§ 136-141).

The Court would reiterate that the Government’s argument to this effect, adduced before the Grand Chamber, was rejected in unambiguous terms (ibid. §§ 221-222). In particular, in paragraph 222 of the pilot judgment the Court held:

“In consequence, it cannot be said that the Constitutional Court’s judgment has in itself eased the disproportionate burden placed on the exercise of landlords’ property rights by the operation of the impugned laws. Nor can it be said that the general situation underlying the finding of the violation in the present case has thereby been brought into line with Convention standards. In contrast, in the light of that judgment and the June 2005 Recommendations it is clear that not much progress in that field can, and will, be achieved unless the above-mentioned general defects of the Polish housing legislation are removed rapidly and the entire system is reformed in a manner ensuring genuine and effective protection of this fundamental right in respect of other similarly situated persons.”

Furthermore, in its ruling concerning the general measures Court made it clear that the systemic violation of Article 1 of Protocol No. 1 still continued on the date of adoption of the judgment, namely 17 May 2006 (ibid. § 237).

81. While the Court itself drew the parties’ attention to this issue, it does not, after considering the matter, find it necessary in this case to give a ruling as to the present or future effects of the Government’s decision (see paragraph 37 above) on the general adequacy of the redress scheme under the 2008 Act. This matter will more appropriately be dealt with by the Committee of Ministers in its supervision of the execution of the pilot judgment.

For the purposes of its own assessment of the compensatory mechanism at the present phase of the pilot-judgment procedure, the Court, as follows from its above conclusions (see paragraphs 77-79), is satisfied that the system introduced by the Government offers to the persons affected reasonable prospects of recovering compensation for the damage caused by the systemic violation of their property rights.

(c) Whether “the matter has been resolved” for the purposes of Article 37

82. It remains for the Court to determine whether, in view of the foregoing, “the matter has been resolved” within the meaning of Article 37 § 1 (b) of the Convention.

83. As stated above, it is a fundamental feature of the pilot-judgment procedure that the Court’s assessment of whether the matter involved in the case has been resolved is not limited to relief afforded to an individual applicant and to solutions adopted in his case, but necessarily encompasses general measures applied by the State in order to resolve the general underlying defect in the domestic legal order identified in the pilot case as the source of the violation found (see paragraph 46 above; see also Hutten‑Czapska (merits), cited above, § 238).

84. The Court, in order to conclude that the matter raised in the pilot‑judgment follow-up applications “has been resolved” and that it is, therefore, legitimate to strike them out of its list of cases, must be satisfied that the remedial action taken by the respondent State in implementation of the general measures indicated by the Court, including means for redress for the systemic violation, provided the applicants with relief at domestic level that make its further examination of their cases no longer justified. In accordance with Article 37 § 1 in fine, the Court must also establish that there are no special circumstances regarding respect for human rights as defined in the Convention and the Protocols thereto, which require the continued examination of those cases. Such a conclusion by the Court is, however, without prejudice to its decision, pursuant to Article 37 § 2, to restore at any time the applications to its list of cases if the circumstances, in particular failure to achieve continued compliance with the Court’s pilot judgment on the part of the respondent State, so require (see Wolkenberg and Others, cited above, § 77; and E.G. and 175 Bug River applications, cited above, §§ 25 and 28-29; see also paragraph 44 above).

85. The Court has already held that the global solutions adopted by the respondent State in order to resolve the underlying systemic problem identified in the pilot judgment have addressed, in a satisfactory manner, the previous lack of legal provisions enabling landlords to recover costs involved in the maintenance of property, thus protecting them against financial losses in situations where the rent paid by tenants was insufficient. The Court has also noted that the new legal rules which are now in place allow them to include in the rent charged a gradual return on capital investment for the acquisition or modernisation of property. Furthermore, a landlord’s right to derive profit from rent has been expressly guaranteed by law (see paragraph 71 above).

86. As regards redress for past prejudice suffered by persons affected by the defective operation of the rent-control scheme, the Court reiterates that under Article 41 of the Convention it may afford just satisfaction to the party injured by a violation of the Convention or the Protocols thereto if the internal law of the High Contracting Party concerned allows only partial reparation to be made. However, the Court would do so only if “necessary”.

The reference back to the domestic system in this provision reflects the subsidiarity principle on which the Convention system is founded; the national authorities have at their disposal a much wider range of legal and other measures capable of providing appropriate relief tailored to the particular circumstances of a given case, whereas relief available in the international procedure before the Court is, in most situations, limited to a pecuniary award.

87. In the framework of the pilot-judgment procedure, one of the essential characteristics of which is the incitement of the respondent State to introduce a remedy for all victims of a systemic violation (see paragraph 44 above), the responsibility for affording reparation is necessarily shifted back to the domestic authorities. The Court’s principal task, as defined by Article 19 of the Convention, is “to ensure the observance of the engagements undertaken by the High Contracting Parties in the Convention and the Protocols thereto”, the adjudication on awards under Article 41 being only accessory to this task. In consequence and having regard to the purpose of the pilot-judgment procedure which, as stated above, is to assist States in resolving systemic problems at national level, thereby securing to persons concerned their Convention rights and freedoms as required by Article 1 of the Convention, the Court’s role after the delivery of the pilot judgment and after the State has taken remedial action in conformity with the Convention cannot be converted into providing individualised financial relief in each and every repetitive case arising from the same systemic situation (see Wolkenberg and Others, cited above, § 76; see also paragraphs 43-44 above).

88. In the present case the Court has found that the redress scheme introduced by the 2008 Act offers to the persons affected reasonable prospects of recovering compensation for damage caused by the systemic violation of Article 1 of Protocol No. 1 identified in the pilot case (see paragraph 81 above). Consequently, the authorities have established a mechanism enabling the practical treatment of reparation claims for the Convention breach, which may be regarded as serving the same function as an award under Article 41 of the Convention.

89. In view of the foregoing, in particular its assessment of the global solutions adopted by the Polish State and the redress scheme available at domestic level, the Court holds that the matter giving rise to the present application and the remaining “rent-control” applications against Poland “has been resolved” for the purposes of Article 37 § 1(b) of the Convention and that it is no longer justified to continue the examination of these cases.

D. Consequences for the application of the pilot-judgment procedure

90. While it still remains for the Committee of Ministers to supervise, in accordance with Article 46 of the Convention, the execution of the Hutten-Czapska merits and friendly-settlement judgments and the discharge by the Polish State of its obligation to ensure the implementation of the general measures indicated by the Court, the Court’s task under Article 19 of the Convention has been fulfilled. In these circumstances, the continued application of the pilot-judgment procedure is no longer justified. Consequently, the Court closes the pilot-judgment procedure applied in the Hutten-Czapska judgment of 19 June 2006 in respect of Polish rent-control cases.

This ruling, as stated above, is without prejudice to any decision it might take to restore the present application and the remaining adjourned applications to the list of cases, pursuant to Article 37 § 2 of the Convention, or to deal substantively with subsequent cases if the circumstances so justify (see paragraph 84 above, with references to Wolkenberg and Others and E.G. and 175 Other Bug River applications).

For these reasons, the Court unanimously

1. Decides to strike the application out of its list of cases;

2. Decides to strike the 24 remaining similar adjourned applications listed in annex no. 2 to this decision out of its list of cases;

3. Decides to close the pilot-judgment procedure applied in the case of Hutten-Czapska v. Poland (no. 35014/97).

Fatoş AracıNicolas Bratza
              Deputy RegistrarPresident

Annex no. 1

List of the applicants, members of the Association of Real Property Owners in Łódź, pursuing the application

1RozenkowskiAndrzej, the President

2ApostolidisKrzysztof

3BiernackiMarek

4BorowskaJadwiga

5BrandenburgMałgorzata

6Bryl-Bukowska Halina

7BrylskaMarta

8BrzezińskiHenryk

9BudrynKrystyna

10BukszyńskaJanina

11ChodakowskaMaria

12ChrostowskiLech

13CichomskiMarek

14Czernielewska-Rutkowska Izabel

15DedońskaHenryka

16DobroszekHenryk

17DośpiałEwa

18DurajBolesław

19DziedziurskiMarek

20DziubaRyszard

21DziubińskaStanisława

22EmilianowiczJolanta

23FeigeMarianna

24FochtmanMirosław

25GóralskaIrena

26GórzyńskiWiesław

27HlebowiczMałgorzata

28IbrahimImad

29JanaczekKarol

30Kamińska-Marcinkowska Maria

31KaniewskaGrażyna

32KarśnickiAndrzej

33KarwackaJadwiga

34KasińskiJan

35KawczyńskaRenata

36KaźmierczakJan

37KejnaJan

38KonkaJadwiga

39KorulskaKrystyna

40KospinDaniela

41KowalskiZbigniew

42KozłowskiTomasz

43KrekoraMichał

44KrekoraJan

45KrupskiMarek

46KruszWitold

47KukiełkaAnna

48KuleszaJacek

49KusiakJarosław

50LaśkiewiczZbigniew

51LemańskaHanna

52LudwiczakAnna Elżbieta

53MackiełłoJan

54MałyskaZofia

55MatuszakJanina

56MazurekHelena

57MiągowskiTomasz

58MichałowskaZofia

59OkunowiczJadwiga

60OlejnikTomasz

61OlszewskiKazimierz

62ParadowskaAnna

63PinteraMichał

64PolKrzysztof

65PorczyńskaElżbieta

66ProchowskaZofia

67RatanowZbigniew

68SabatElżbieta

69SekułaAleksander

70SmaczyńskaMirosława

71SmulskaBarbara

72SobczykMarianna

73SokołowskaElżbieta Teresa

74Sowińska-DębskaDorota

75StasiakZofia

76StrzeleckiJan

77SupadyAnna

78SzletyńskiStanisław

79SzpilarewiczAnna

80SzulcCzesław

81TomaszewskiAndrzej

82TrawińskiLech

83Turska-WoźniakEwa

84WągrowskaElżbieta

85WałęsińskiWłodzimierz

86WilczyńskiAndrzej

87WitczakLeszek Zenon

88WitkowskiCzesław

89WojtczakKrystyna

90WojtowiczAnna

91WorpusJan

92ŻarysGrażyna

93ŻarysTadeusz

94ZawieruchaRomana

95ZgodzińskaUrszula

96ŻylińskaGrażyna

Annex no. 2

List of 24 adjourned “rent-control cases” against Poland

1.application no. 39512/98, lodged on 6 July 1997 by Mr Ryszard KOCYBA, represented in the proceedings before the Court by Ms Z. Aczkiewicz‑Piela, a lawyer practising in Tarnowskie Góry;

2.application no. 48821/99, lodged on 7 November 1998 by Mr Ryszard PAWLUS;

3.application no. 51775/99, lodged on 22 January 1999 by Ms Wiesława EDER;

4.application no. 51794/99, lodged on 23 April 1999 by Mr Edmund KORAL;

5.application no. 65181/01, lodged on 21 February 2000 by Mr Robert ALASZKIEWICZ;

6.application no. 66695/01, lodged on 13 August 2000 by Mr Bogdan BOROWIK;

7.application no. 73989/01, lodged on 29 September 2000 by Mr Jan Maciej OSTROWSKI;

8.application no. 12178/02, lodged on 25 September 2001 by Ms Janina OSTROWSKA;

9.application no. 16500/02, lodged on 21 October 2001 by Mr Jan ŁYSKO;

10.application no. 16663/02, lodged on 4 April 2001 by Mr Antoni TRUSZKOWSKI;

11.application no. 23781/02, lodged on 12 June 2002 by Mr Cezary BOHRER;

12.application no. 28945/02, lodged on 17 July 2002 by Mr Piotr OWCA;

13.application no. 14440/03, lodged on 10 April 2003 by Mr Wojciech MALICKI;

14.application no. 23457/04, lodged on 18 June 2004 by Mr Jerzy SEIFERT, represented in the proceedings before the Court by Mr J. Paterek‑von Sperling;

15.application no. 7626/05, lodged on 24 February 2005 by DPL, represented in the proceedings before the Court by Mr J. Bigajczyk, a lawyer practising in Poznań;

16.application no. 10032/05, lodged on 1 February 2005 by EXIM, represented in the proceedings before the Court by Mr J. Bigajczyk, a lawyer practising in Poznań;

17.application no. 10736/05, lodged on 5 March 2005 by Mr E. SCHLESINGER, represented in the proceedings before the Court by Mr J. Bigajczyk, a lawyer practising in Poznań;

18.application no. 17906/05, lodged on 27 April 2005 by Mr Bogdan PIETRUSIŃSKI;

19.application no. 24459/05, lodged on 23 June 2005 by Ms Anna CZARCIŃSKA;

20.application no. 1236/06, lodged on 23 December 2005 by Mr Arkadiusz GRABOWSKI;

21.application no. 22510/06, lodged on 12 May 2006 by Mr Jerzy WOJTECZEK;

22.application no. 22776/06, lodged on 15 May 2006 by Mr Wacław CHYŁKOWSKI, represented in the proceedings before the Court by Mr S. Czacharowski, a lawyer practising in Bydgoszcz;

23.application no. 38966/08, lodged on 4 August 2008 by Ms Barbara KOWOLIK;

24.application no. 8995/08, lodged on 23 January 2008 by Mr Piotr KOZŁOWSKI.

THE FACTS

As in the case of The Association of Real Property Owners in Łódź v. Poland (no. 3485/02) and the related case of Piotrowski v. Poland (no. 27910/07), houses belonging to the applicants or their predecessors in title were at various dates taken under the “state management of housing matters” introduced in 1946 by the communist authorities. Similarly, their property was subsequently made subject to the special lease scheme”, the system of “controlled rent” and restrictions imposed under the 2001 Act, which are described at length both in the Hutten-Czapska pilot judgment and in the above main decision in the case of The Association of Real Property Owners in Łódź (see §§ 6-7).

COMPLAINTS

In all the cases the applicants in essence complained about various aspects of the continued restrictions on their property rights imposed by the Polish housing legislation, in particular the State control over increases in rent and the limitations on the termination of leases and eviction that reduced their ability to use their property and derive a profit from it in a manner contrary to Article 1 of Protocol No. 1 to the Convention.

[1]1. The provision applicable on the date of adoption of the Hutten-Czapska merits judgment read: “An increase whereby rent or other charges for the use of the dwelling would exceed 3% of the reconstruction value of the dwelling within 1 year may take place only in justified cases. At the tenant’s written request, the landlord shall, within 7 days, give reasons for the increase and its calculation in writing.” (see Hutten-Czapska, cited above, § 125).

[2]. The date of entry into force of the Constitutional Court’s judgment of 19 April 2005 (see Hutten-Czapska, cited above, §§ 136-141).

[3]. See §133-142 of the Hutten-Czapska merits judgment.

[4]. The provision is rendered in § 87 of the Hutten-Czapska (merits) judgment.

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