BERGER-KRALL AND OTHERS v. SLOVENIA

FIFTH SECTION

DECISION

Application no. 14717/04
Cornelia BERGER-KRALL and others
against Slovenia

The European Court of Human Rights (Fifth Section), sitting on 28 May 2013 as a Chamber composed of:

Mark Villiger, President,

Angelika Nußberger,

Boštjan M. Zupančič,

Ganna Yudkivska,

André Potocki,

Paul Lemmens,

Aleš Pejchal, judges,

and Claudia Westerdiek, Section Registrar,

Having regard to the above application lodged on 15 March 2004,

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

Having regard to the comments submitted by the International Union of Tenants, which had been given leave to intervene by the President (Article 36 § 2 of the Convention).

Having deliberated, decides as follows:

THE FACTS

1. The applicants, whose names and dates of birth are indicated in annex 2, are ten Slovenian nationals. They are members of the Association of Tenants of Slovenia (Združenje najemnikov Slovenije). They are represented before the Court by the Čeferin Law Firm, practising in Grosuplje. The Slovenian Government (“the Government”) are represented by their Agent, Mr B. Tratar, State Attorney General.

A. The circumstances of the case

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

1. Relevant background

(a) Socially-owned flats and “specially protected tenancy” in the former Socialist Republic of Slovenia

3. In the former Socialist Republic of Slovenia, socially-owned dwellings represented a significant part of the housing stock (230,000 housing units). Approximately one-third of the Slovenian population lived in such housing units at the time. According to the doctrine of “social ownership” (družbena lastnina) introduced into the Yugoslav system in the 1950s, such dwellings were owned by the community, the role of public bodies being confined to management.

4. After the Second World War, private dwellings and other premises passed into State ownership through legislation on nationalisation. At the same time, dwellings were built or purchased by socially-owned enterprises or other public bodies. In both cases the latter allocated them to their employees and other entitled persons, who became holders of a “specially protected tenancy” or “occupancy right” (stanovanjska pravica – hereinafter translated either as “specially protected tenancy”, as suggested by the applicants, or as “occupancy right”, as indicated by the Government) under Article 206 of the then Constitution of the Socialist Republic of Slovenia and the existing legislation. The right to a socially-owned dwelling guaranteed the citizen “the permanent use of the dwelling for his personal housing needs as well as for the needs of his family”. The Housing Act 1982 (hereinafter referred to also as the “ZSR”) provided that once allocated by an administrative decision followed by a contract, a specially protected tenancy entitled the holder to permanent, lifelong and uninterrupted use of the flat against the payment of a fee covering maintenance costs and depreciation. The fee (or rent) was determined on the basis of the construction price of dwellings, the requirements of simple replacement of dwellings and in accordance with the standards and norms for maintenance and management of socially-owned dwellings.

5. The Government pointed out that the occupancy right conferred the right to use the socially-owned dwelling only for the purpose of satisfying one’s personal and family housing needs. Its ratio was the economical and efficient use of the housing space, meaning that each family should have at its disposal as much space as it needed, and no more. The occupancy relationship could be terminated and another, more appropriate dwelling could be allocated in the event of a reduction of the number of users of the dwelling (Section 59 of the ZSR). In the Government’s view, this proved that the occupancy right was associated with personal and family needs, and not with a particular dwelling. The concept of family needs was variable and depended on the number of family members. No more than one dwelling could be used at the same time and no one could move into the dwelling without the prior approval of the holder of the occupancy right. The latter was given management entitlements, such as the right and duty to participate in the management of the socially-owned housing. Holders of occupancy rights could exchange dwellings and make alterations to the dwelling, its furnishings and appliances only with the prior written approval of the housing administration (Section 29 of the ZSR).

6. The applicants challenged the Government’s allegation that the specially protected tenancy permitted use of the dwellings for housing purposes only. They observed that the holder of the occupancy right could use the dwelling without restrictions for himself and for the members of his family, did not need any consent to enlarge the number of family members, could perform business activities in a part of the dwelling and could sublease part of it for an agreed rent. He could modernise the dwelling with the agreement of the housing organisation managing the building; if such agreement was denied – which in practice almost never occurred – he could demand substitution of consent in legal proceedings. The dwellings in question could be sold only to holders of occupancy rights, who could – with few very specific exceptions – exchange their dwellings. Any sales to third persons were null and void.

7. In legal theory and judicial practice the specially protected tenancy was described as a right sui generis. On 26 November 1998 the Constitutional Court delivered a decision (Up-29/98) in which it considered that under the legislation of the former Socialist Republic of Slovenia, the specially protected tenancy enjoyed stronger protection than a purely contractual tenancy right. The legal relationship was not limited in time and was linked not only to the holder of the right, but also to persons living with him. It concluded that, because of the very limited volume of transactions involving socially-owned dwellings, the specially protected tenancy had been more akin to a property right than to a tenancy right.

8. When a holder of a specially protected tenancy died, his or her rights were transferred to the surviving spouse or common-law partner (who held the specially protected tenancy jointly) or to a registered member of the family household who was also using the flat. According to the applicants, this also applied if they moved out or divorced. Thus, specially protected tenancies could be passed on from generation to generation.

9. In the Government’s opinion, however, this was not a succession of the occupancy right but rather a specifically regulated transfer of it to one of the users of the dwelling. In this respect, the spouse and common-law partner enjoyed a privileged status. Special provisions applied in the event of divorce (Section 17 of the ZSR) and if it considered that none of the users of the dwelling met the conditions for obtaining the occupancy right after the death of the previous holder, the housing administration could request the said users to vacate the premises (Section 18 of the ZSR).

10. The occupancy right could be cancelled only on limited grounds (Sections 56, 58 and 61 of the ZSR), the most important of which was failure by the holder to use the flat for his or her own housing needs for a continuous period of at least six months without good reason (such as military service, medical treatment, or temporary work elsewhere in the former Socialist Federal Republic of Yugoslavia (the “SFRY”) or abroad; see Section 19 of the ZSR). In this case, the users of the dwelling who had been living together with the holder of the occupancy right for a minimum of two years had the same rights as they would have had if the holder had died. Other grounds were inappropriate and detrimental behaviour, failure to pay the fee, full sublease, use of the dwelling by a person other than the holder of the occupancy right and possession of an unoccupied flat suitable for residence. Although inspections were to be carried out to ensure compliance with these requirements, the specially protected tenancy was rarely, if ever, cancelled on these grounds (see Đokić v. Bosnia and Herzegovina, no. 6518/04, § 6, 27 May 2010). In this connection, the applicants pointed out that it was true that in theory holders of a specially protected tenancy could be moved to a substitute dwelling if the dwelling they were occupying was too large for them and the other users with regard to social standards (see the Government’s allegations in paragraph 5 above). However, according to the applicants, this possibility was in practise never used and there was no case-law on the matter.

11. All employed citizens were required to pay a special monthly housing contribution (approximately 6 to 9 per cent of their monthly income) to the Joint Housing Fund. The latter granted benefits (allocation of a flat under specially protected tenancy, or loan to purchase, construct or renovate a dwelling) on the basis of the principles of mutuality and solidarity with those in need. All socially-owned dwellings were part of the Joint Housing Fund and administered by State institutions, municipalities, social enterprises and other legal entities governed by public law.

12. Before the independence of Slovenia, the applicants or their legal predecessors acquired specially protected tenancy of socially-owned dwellings which had been expropriated under the legislation on nationalisation. Under the legislation in force prior to 1991, no difference in specially protected tenancy was made between tenants of State-constructed dwellings and tenants of nationalised dwellings.

13. On 25 June 1991 the Republic of Slovenia declared its independence. Among the first reforms enacted were the Housing Act 1991 (Stanovanjski zakon) and the Denationalisation Act 1991 (Zakon o denacionalizaciji), aimed at redressing the wrongs committed after the Second World War. The new Constitution of the Republic of Slovenia (Section 33) guaranteed the right to private property.

(b) The Housing Act

14. The Housing Act 1991 (hereinafter referred to also as the “SZ”) provided for the transformation and privatisation of socially-owned dwellings. The Joint Housing Fund (see paragraph 11 above) was dissolved and, with few exceptions, the socially-owned dwellings were transferred ex lege into State ownership or into that of local communities or the National Pension Fund. Those dwellings which had become socially-owned property after having been expropriated from private owners were transferred into the ownership of the municipalities (Section 113).

15. The specially protected tenancy was replaced ex lege with a normal lease contract (Section 141). The previous holders of specially protected tenancies or, in the event of their death, their family members living in the flats, were given the possibility of renting the flats for an indefinite period and for a non-profit rent (which covered maintenance, management of the flat and capital costs – Section 147) or of purchasing them on favourable terms, paying an administratively defined price which was calculated on the basis of a discount of 30% (in the event of payment in instalments) or 60% (in the event of one-off payment) off the estimated value (Sections 117-124).

16. According to the applicants, in practice this meant a price of 5-10% of the market value of the dwelling payable in instalments over 20 years or 5% of the market value payable within 60 days. The right to purchase on favourable terms could be transferred inter vivos or mortis causa to close family members. However, previous holders of specially protected tenancy in previously expropriated flats could only purchase them on favourable terms if the owners agreed to sell them within one year from the restitution of the dwelling (Sections 117 and 125). In that case the 30 or 60 per cent discount (Sections 117 and 119) was offered by the owner, who would then be reimbursed by the municipality.

17. It follows from the above that all previous holders of specially protected tenancies had been given the possibility of taking out new leases (to be signed within six months from the entry into force of the Housing Act 1991). However, the applicants contended that these new leases were less advantageous than the specially protected tenancy. In particular, tenants no longer had secured tenancy of their homes since the owners could move them to other adequate flats without any particular justification (Section 54). There were now nine grounds on which tenants could be evicted for misconduct, compared with three previously. The fault-based grounds for the termination of the lease were (Section 53 of the SZ):

“- if the tenant and any person living with him uses the dwelling counter to the law or the terms of the lease;

- if, by the way they use the dwelling, the tenant or any person living with him causes major damage to the dwelling or common areas, parts, facilities and installations of a multi-dwelling building;

- if the tenant fails twice in succession or two months in the last twelve months to pay rent or costs that are paid in addition to rent within the time-limit specified in the lease;

- if the tenant or any person living with him, by their manner of using the dwelling, frequently or seriously disturbs other residents in their peaceful use of the dwelling;

- if the tenant makes changes to the housing and fixtures without the prior consent of the owner;

- if, in addition to the tenant, a person who is not stated in the contract of lease uses the dwelling for more than thirty days without the owner’s knowledge;

- if the tenant leases out the dwelling without the agreement of the owner or charges a subtenant a higher rent;

- if the tenant does not allow access to the dwelling in cases [specified by law];

- if the tenant or any other person who uses the dwelling performs a prohibited activity there, or a permitted activity in conflict with [the law].”

18. However, before terminating the lease the owner had to give prior written notice to the tenant who was allegedly violating its provisions; no termination was allowed if the inability to pay the rent in full and to entirely fulfill other obligations was due to the social distress of the tenant and the other persons who used the dwelling.

19. Without the owner’s permission, tenants could not sublet a flat, renovate it or decorate it. Nor could they bring new people to the flat (Section 53). The owner could renovate the flat at any time and enter it twice a year (Section 44). The tenant could not freely transfer the lease to another family member or exchange the flat. After the death of the original tenant, only the spouse or a person having lived with the tenant in a permanent relationship, or an immediate family member living in the flat, had the right to take over the lease (Section 56). The tenant had to pay the legally regulated non-profit rent (Section 63), which, unlike the fee (see paragraph 4 above), not only covered maintenance costs and depreciation, but also included a sum to compensate capital costs and management of the dwelling.

(c) The Denationalisation Act

20. The Denationalisation Act 1991 (hereinafter referred to also as the “ZDen”) regulated the denationalisation of property which had previously passed into State ownership through legislation on agrarian reform, nationalisation, confiscation or other forms of expropriation of privately owned properties. Previous owners or their heirs (hereinafter referred to as “previous owners”) were entitled (until 7 December 1993) to claim restitution of the expropriated property. Wherever possible, the property itself was to be returned in natura, including dwellings which had been let under the specially protected tenancy scheme. Where such restitution was not possible, claimants were entitled to substitute property and/or compensation (Section 2).

21. The restitution of dwellings occupied by a tenant did not affect the leases concluded in the meantime, which remained in force (see Section 125 of the SZ and Section 24 of the ZDen).

22. The applicants pointed out that after the enactment of the housing reform, a number of former holders of specially protected tenancy in previously expropriated flats filed requests to purchase the flats. The deadline for filing such requests expired before that for the filing of restitution claims by the “previous owners”. Only when it became clear in individual cases (especially in 1994) that denationalisation proceedings had been initiated, were the former holders of specially protected tenancies informed that their requests to purchase had been rejected.

i. The denationalisation proceedings

23. Holders of occupancy rights could not participate in the denationalisation proceedings to determine the ownership of the property, which meant that they were not notified about the filing of a request for the restitution of the dwelling they were occupying. According to the data submitted by the applicants, 37,000 restitution requests had been filed and in the period until the end of 1999 a yearly average of 2,000 to 5,000 decisions had been rendered, which meant a total of approximately 29,000 decisions, out of which only approximately 24,000 became final. Until 1999 approximately 18% of decisions were for restitution in the form of compensation, 27% for restitution of ownership of free dwellings, 44% for restitution of ownership of occupied dwellings and 8% were refusals or rejections of the requests. This meant that by the end of 1999 a substantial portion of denationalisation procedures had not been completed. Initially in such procedures, the property was returned to the pre-war owners; however, in the vast majority of cases those owners had passed away, which meant that in order to identify the “previous owners” a complex and time-consuming inheritance procedure was necessary.

24. The Government pointed out that tenants were not party to the denationalisation proceedings as restitution did not affect the tenancy relationship and did not prejudice the tenants’ rights or benefits which had a direct basis in law. Moreover, the existence of a tenancy relationship did not affect the decision on denationalisation and restitution (see Constitutional Court decision no. Up-237/97, point 5). However, tenants could participate if they demonstrated a legal interest, notably an interest in recovering their investments. In this regard, the status of party to the denationalisation proceedings was recognised in respect of: (a) any person who, before 7 December 1991 (date of entry into force of the ZDen), had invested in nationalised real estate, whenever and insofar as the proceedings might lead to a ruling on that person’s rights deriving from the investments concerned, and (b) the entities liable for restitution, which in cases of former socially-owned dwellings usually meant municipalities (Section 60 of the ZDen).

ii. Reimbursement of investments

25. The principle of restitution in natura applied also in cases in which the value of the property had increased. Former holders of the occupancy right who had invested in the dwelling could only claim compensation under the law, but not acquire ownership of the dwelling by virtue of such investments. In particular, the occupant could claim total recovery of costs on the condition that the investments had been made prior to 7 December 1991 and that they constituted major maintenance investments and not simple routine maintenance. Upon a judicial action introduced by the tenant, the competent court would appoint a construction expert to assess the value of the property at the time of nationalisation and its value at the time of its restitution; a tenant who could provide evidence of the investments made (they were not required to provide evidence that the community of residents had consented to the investments) could then obtain the difference between the two values of the property (Section 25 of the ZDen). In cases in which a final decision on restitution had already been adopted, a claim for recovery of investments could be filed within one year from the entry into force of the 1998 Act amending the ZDen.

26. The applicants observed that in the event of an increase in the value of the property due to the investments made by the tenant, Section 25 of the ZDen gave three options to the “previous owners”: (a) to request compensation instead of restitution in natura; (b) to request part ownership of the dwelling; (c) to recover the full property and reimburse the tenant. As a rule, the tenants’ requests for reimbursement were examined in sets of proceedings initiated after the denationalisation proceedings, often after the year 2005. However, according to the applicants, the evaluation of the dwellings according to the relevant domestic rules was totally unrealistic, which made the evaluation of the increased value due to new investments unrealistic also. Moreover, only those investments which had increased the value of the dwelling – and not those which had kept the value of the property at the same level since its expropriation – were taken into account. The time-limit for reimbursement of investments was ten years and the parties could reach a friendly settlement on these matters. “Previous owners” frequently made the reimbursement conditional upon the tenants vacating the premises. In the applicants’ opinion, these rules did not guarantee former holders of occupancy rights a fair possibility of recovering the real value of their investments.

(d) The 1994 amendments to the Housing Act and the three “models of substitute privatisation”

27. In the following years, the SZ and the ZDen, as well as the legal acts implementing them, underwent numerous amendments, which on some occasions were more favourable to the tenants, and on others to the “previous owners”.

28. The 1994 amendments to the Housing Act 1991, enacted on 6 April 1994, were more in favour of the tenants. Former holders of a specially protected tenancy who occupied previously expropriated flats which had not been returned to “previous owners” (because no request for restitution had been filed, or the request had been rejected) were allowed to purchase the flats they were occupying (amended Sections 117 and 123).

29. The amended Section 125 further provided that where the dwelling had been returned to the “previous owner”, if he agreed to sell he was eligible for an additional financial reward from public funds (this was the so-called “first model” of substitute privatisation).

30. If the “previous owner” did not agree to sell the dwelling and the tenant decided, within two years from the restitution, to move out and purchase a flat or construct a house, and if the “previous owner” so agreed, he had to pay the tenant compensation amounting to 30 per cent of the value of the dwelling. The tenant was entitled to further compensation amounting to 50 per cent of the value, in thirds, from the municipality, the Slovenian Compensation Fund and the Development Fund of the Republic of Slovenia. In addition, the tenant also had the right to a State loan under certain conditions. This was the so-called “second model” for settling the housing issue.

31. In addition, the 1994 amendments also introduced a so-called “third model”, where a tenant to whom the “previous owner” was not prepared to sell the dwelling could purchase a comparable substitute flat on favourable terms from the municipality if he decided not to purchase another flat or construct a house (amended Section 125). Under this model, the applicants were in the same position as previous holders of specially protected tenancies in State-constructed dwellings who could not purchase the dwelling they had occupied because of practical and legal obstacles.

32. The applicants noted that the right to purchase established by the amended Section 125 of the SZ was legally directly applicable and was not subjected either to preclusive time periods or a statute of limitations. It was a permanent legal option, to be realised on the basis of a unilateral request on the part of former holders of specially protected tenancies (Supreme Court decision of 14 January 2010, no. II Ips 370/2007).

33. However, the “third model” was repealed on 25 November 1999 by the Constitutional Court (decision U-I-268/96), which considered that the additional financial burden had unduly restricted the municipalities’ property rights.

34. On 21 March 1996 the Constitutional Court delivered a decision (U-I-119/94) concerning the pre-emption right of tenants having a contract of unlimited duration (Section 18), such as the previous holders of specially protected tenancies. It held that that pre-emption right, already provided for by the previous legislation, did not interfere with the property rights in respect of dwellings subject to original privatisation under the SZ and the ZDen, since the property right had not yet been established at the time of the entry into force of those acts. However, where property rights had been acquired by other means, the pre-emption right interfered with the right of property and was unconstitutional.

(e) The Housing Act 2003 and further developments

35. Subsequent amendments to the Housing Act 1991, and the new Housing Act enacted in 2003 (hereinafter referred to also as the “SZ-1”), were more favourable to the “previous owners”, who were authorised to raise the non-profit rent by up to 37% in order to cover maintenance costs and other expenses. That increase in the non-profit rent was to be applied only to leases taken out after the amendments entered into force (22 March 2000). However, on 20 February 2003 the Constitutional Court (decision no. U-I-303/00-12) declared this limitation unconstitutional as being discriminatory. It underlined that protecting the status of former occupancy rights holders did not mean that the non-profit rent could not change, and that eliminating the discrepancy in the previous system (under which rents did not cover the real cost of the use of a dwelling) could not be deemed to be an inadmissible interference with the terms of the lease contracts. The protection of acquired rights and the principle of non-retroactivity did not protect tenants from increases in rent. The increase in the non-profit rent was thus extended to all the leases that predated the enactment of the 2000 amendments.

36. The Housing Act 2003 increased from nine to thirteen the number of fault-based grounds on which tenants could be evicted from their homes (unauthorised persons living in the flat, violation of the house rules, tenant’s absence in excess of three months, ownership of another suitable dwelling, either by the tenant or by his or her partner – Section 103). However, tenants could avoid termination of the lease by proving that the problem was not their fault or that it had not been possible for them to rectify the problem within the given time-limit (Section 112(6)). The “previous owner” could also move the tenant to another adequate flat (defined in Section 10 as a flat satisfying the housing needs of the tenant and his immediate family members living with him or her) at any time and without any reason; however, this could be done to the same tenant only once and the removal costs were borne by the “previous owner” (Section 106). In respect of the transferability of the lease after the tenant’s death, a request to take the lease over had to be filed within 90 days (Section 109). For this purpose, a relative up to the second generation who had lived in economic community with the former holder of the occupancy right for more than two years on the day of entry into force of the Housing Act was considered to be an “immediate family member” (Section 180). The tenant had a pre-emption right if the flat was for sale.

37. Furthermore, rent subsidies (up to 80% of the non-profit rent) were available to tenants in the event of financial difficulties; socially disadvantaged people could also apply to the municipalities to obtain another non-profit rental dwelling or a temporary solution for their housing needs (Sections 104 and 121). The 2009 Housing Act Amendment introduced Sections 121a and 121b, which provided for the possibility, for persons who were paying market rents and had unsuccessfully applied for the allocation of a non-profit rental dwelling, to obtain subsidies (amounting to the difference between the market and the non-profit rents). These provisions were aimed at compensating the shortage of non-profit dwellings.

38. The 2003 Housing Act also introduced a “new model” for the so-called “substitute privatisation” for former occupancy right holders. The latter could, within five years after the enactment of the Act or after the decision on denationalisation had become final, exercise their right to purchase another dwelling or to build a house, thus becoming entitled to special compensation (up to 74% of the price of the dwelling – Section 173) and to a subsidised loan for the remaining amount. Entitlement to and level of compensation were determined by the Ministry responsible for housing matters. Tenants who decided to buy another dwelling or build a house were obliged to vacate their rented accommodation no later than one year after receiving the compensation.

39. Furthermore, tenants who did not wish or could not afford to buy a flat could apply to rent a non-profit dwelling (Section 174). The latter was defined as a dwelling rented out by the municipality, the State, a public housing fund or non-profit organisation, allocated on the basis of a public call for applications (Section 87). Under this procedure “tenants of a dwelling expropriated under nationalisation regulations and returned to the previous owner” were awarded a rather high number of points (190), which, according to the Government, offered them good prospects of being given priority and actually being declared eligible. Lease agreements for non-profit dwellings would be concluded for an unlimited period (Section 90).

(f) Statistical data

40. According to information available on the Internet, in 1991 there were some 11,000 housing units eligible for return to “previous owners”. Some 6,300 housing units were returned to ownership in full title, while some 4,700 housing units were returned to “previous owners” while they were occupied by tenants who previously had specially protected tenancies. According to the Government, in 2012 some 2,780 such tenants managed to solve their housing situation by substitute privatisation, that is, by purchasing or building a substitute dwelling, upon receipt of a financial incentive from the State. A further 288 tenants lodged requests and proceedings were still pending at the time of submission of the Government’s observations. An estimated 1,500 tenants would eventually continue to live in the flats they had previously occupied as holders of specially protected tenancies.

41. The applicants emphasised that at the beginning of the housing reform, out of approximately 650,000 housing units in Slovenia 230,000 were socially-owned dwellings used by individuals (approximately one third of the Slovenian population) with specially protected tenancy (see paragraph 3 above). The then legislation did not distinguish between expropriated dwellings and other socially-owned dwellings (see paragraph 12 above) and, in general, individuals acquiring occupancy rights did not even know which source the dwelling came from. This was especially true for those who had acquired occupancy rights several decades after the expropriation. The great majority of holders of occupancy rights who had been given the opportunity to purchase the dwellings on favourable terms had availed themselves of this possibility; only few of them had stayed in the flats on a contractual basis. However, as explained in paragraph 16 above, the possibility to purchase without the “previous owners’s” consent was not given to those who were living in previously expropriated dwellings subject to denationalisation (approximately 4,700 properties, covering 2% of all specially protected tenants). According to the available estimates, in February 2009 approximately 1,500 families (most likely those who could not afford to buy a dwelling) had continued to lease their denationalised dwellings, while approximately 3,200 families had vacated the premises and found a solution to their housing problems elsewhere. According to the applicants, for the former category of families relations with the “previous owners” had often been burdened with judicial and personal conflicts. “Previous owners” applied constant pressure by, inter alia, illegal evictions, rent increases or simply poor building maintenance.

(g) The Slovenian Ombudsman

42. Since 1995, in his regular annual reports the Slovenian Ombudsman has illustrated the difficulties facing tenants in denationalised flats. In his Special Report of 8 January 2002 on the Situation of Tenants in Denationalised Flats he also made a number of proposals designed to remedy the situation: feasible models for substitute privatisation (greater financial incentives to solve the housing issue, for both tenants and “previous owners”), protection of the duration of leases and definition of the non-profit rent, legal mechanisms for the protection of tenants’ rights, such as free legal aid, improved implementation of the right to pre-empt, realistic evaluation of tenants’ investments for the refurbishment of the dwellings.

2. The Association’s undertakings

(a) The “petition”

43. On 3 February 1998 the Association of Tenants (hereinafter, “the Association”), lodged a “petition” with several State authorities, including the National Assembly, the President of the Republic and the Government. It challenged the Housing Act 1991 and the Denationalisation Act 1991, on the ground that they deprived the Association’s members of their specially protected tenancy rights in a manner incompatible with the Constitution of the Socialist Republic of Slovenia, which was still in force at the time when the two acts were passed in 1991. Instead of the privileged specially protected tenancy, which in the Association’s view was in many respects equal to a property right, tenants were granted leases with a temporary non-profit rent. Moreover, once the dwelling had been taken over by a “previous owner”, that contract became an ordinary lease contract. This effectively deprived the tenants of their property and home. In 1991 approximately 45,000 individuals (previous holders of specially protected tenancies and their families), living in 13,000 flats, were concerned by these measures. They considered themselves victims of the transition, in the same manner as “previous owners” whose property had been taken away under the previous regime.

44. The Association also complained that its members were not given all the rights and benefits that other former specially protected tenancy holders enjoyed, such as the right to purchase the dwelling and to have a permanent lease with a non-profit rent. It argued that tenants who – like all its members – were living in dwellings once expropriated, could not purchase their homes, which were subject to restitution to the “previous owners”, whereas all other previous beneficiaries of specially protected tenancies had that possibility. In addition, “previous owners” of flats returned in denationalisation proceedings were selling them to third parties but not to the tenants, who were facing eviction proceedings. In the Association’s view, the restitution of the dwellings to the “previous owners” deprived the tenants of the right to purchase them and resulted in differential treatment between the two groups of tenants with no reasonable ground.

45. The offending legislation allegedly also failed to provide for proper compensation for the money the tenants had invested in the maintenance and improvement of the dwellings. Moreover, the Association complained that its members did not have locus standi in the denationalisation proceedings which were to rule on the ownership of “their” dwellings. It also criticised the constant increases in the non-profit rent, which in its view was approaching levels comparable to the rents charged on the free market. The Association concluded that privatisation and restitution of the expropriated dwellings should be done by paying compensation to the “previous owners” of the dwellings rather than returning their property, as recommended by Resolution 1096 of the Parliamentary Assembly of the Council of Europe (see paragraphs 83-85 below). It requested that an independent expert commission be set up, that the SZ and the ZDen be amended, that the restitution of property as such be stayed and that the National Housing Programme be supplemented.

46. On 2 April 1998 the Government adopted a decision concerning the petition, with an accompanying opinion. The Government did not agree that tenants were the victims of transition. Regarding the right of previous holders of specially protected tenancies to purchase the dwellings, different factual circumstances had to be taken into account. While in some cases the dwellings had been built with State funds, in other cases they had been expropriated from private owners. These “previous owners” might also claim restitution of, and therefore property rights over the dwellings. This meant that they had priority over the former holders of specially protected tenancy rights. In conclusion, as far as the purchase of dwellings was concerned, the two categories of previous holders of specially protected tenancies were not in a comparable position.

47. On the other hand, with respect to other rights and benefits the tenants had been put on an equal footing with all those previous holders of specially protected tenancies who decided not to purchase their dwellings but to rent them on favourable terms. They were all granted the right to rent the dwellings for an indefinite period for a non-profit rent, even after the “previous owner” took over the flat. This had been upheld by the Constitutional Court.

48. The Government also disputed the objection that the impugned legislation did not take into account the investments the tenants had put into the dwellings. They referred to the relevant provisions of the SZ, which granted former specially protected tenancy holders the right to compensation. The Government pointed out that the needs and expectations of the tenants had to be reconciled with those of the “previous owners” of the dwellings, as well as with the limited financial capacities of the State to provide them with housing on favourable terms. They further acknowledged that the tenants, especially elderly people, encountered certain difficulties in their new situation (pressure to move out or to pay a higher rent), but such circumstances had no foundation in the existing legislation. The Government supported the establishment of an expert commission with representatives of both tenants and “previous owners”. It appears that no other authority took a position with respect to the petition.

(b) The administrative proceedings

49. On 8 May 1998 the Association instituted proceedings against the Government with the Administrative Court in Ljubljana, for not initiating the necessary amendments to the SZ and the ZDen. In their view, the legislation in question breached the tenants’ rights under the Constitution and the European Convention on Human Rights, and disregarded Resolution 1096 of the Parliamentary Assembly of the Council of Europe. In particular, the Association repeated the complaints from its petition that the dwellings should not be returned as such, that the tenants had only a limited right to purchase the dwellings, that they did not have locus standi in the denationalisation proceedings and that their investments in the dwellings had not been taken into account.

50. On 3 March 1999 the Administrative Court rejected the complaints, holding that the Government’s decision and the accompanying opinion did not qualify under Section 1 of the Administrative Disputes Act, as then in force, as an individual act or an action infringing the individual’s constitutional rights.

51. On 6 April 1999 the Association appealed to the Supreme Court.

52. On 20 September 2001 the Supreme Court dismissed the appeal and upheld the Administrative Court’s decision of 3 March 1999.

53. On 8 March 2002 the Association lodged a constitutional complaint with the Constitutional Court, challenging the Supreme Court’s decision. It repeated the arguments from the petition and the subsequent court proceedings, and argued in particular that the legislation in issue deprived the tenants of their property and homes.

54. On 11 February 2004 the Constitutional Court rejected the complaint. It upheld the decisions of the Administrative Court and the Supreme Court that the relevant governmental decision and the accompanying opinion could not be challenged in administrative proceedings. In the Constitutional Court’s view, they merely reflected the Government’s policy position with respect to the petition lodged, and were therefore not subject to court review.

(c) The Constitutional Initiative (Ustavna pobuda)

55. On 8 March 2002, at the same time as the constitutional complaint (see paragraph 53 above), the Association, representing a group of previous specially protected tenancy holders, also lodged a constitutional initiative for review of the constitutionality of the SZ, the ZDen, the Administrative Disputes Act 1997 and the relevant judicial practice, and their compatibility with international law binding on Slovenia.

56. On 25 September 2003 the Constitutional Court dismissed the constitutional initiative (decision U-I-172/02-40). It acknowledged that the Association, relying on a number of court proceedings initiated by its members, had a legal interest in challenging the existing legislation since it directly interfered with their rights, interests and legal position, but it ruled that the Constitutional Court did not have jurisdiction to examine the compatibility of the disputed legislation with the provisions of the Constitution of the Socialist Republic of Slovenia, which was no longer in force.

57. Relying on the case-law of the European Court of Human Rights, the Constitutional Court went on to say that in any event the specially protected tenancy could not be interpreted as an absolute right to property under Article 1 of Protocol No. 1, guaranteeing the acquisition of a particular dwelling. Nor could it be said that the claimants’ right to a home had been breached under Article 8 of the Convention since they could remain in the dwellings, with a contract of unlimited duration and for a non-profit rent. In addition, after the tenant’s death, the right of a spouse or a person having lived with the tenant in a permanent relationship, or an immediate family member living in the flat, to take over the tenancy was also guaranteed (Section 56 of SZ).

58. The Constitutional Court had held in its previous decisions that the specially protected tenancy from the former system was a right to be protected by the rule of law. However, in the new system, this right encountered other rights. In transposing the system of specially protected tenancy relations into lease relations, the legislator could not fulfil all the expectations arising from the former socio-economic and political system, which was founded on social property, and not on private property. The rights from the former system could not have remained unchanged and untouched.

59. The State had undergone political and social changes, including the transformation of social property into private property. The challenged legislation and the transformation of specially protected tenancy into simple tenancy rights should therefore be understood as part of these changes. Tenants’ rights were now limited by the rights of the “previous owners” of the dwellings.

60. In particular, the tenants’ right to purchase now competed with the property rights of the “previous owners” of the dwellings. In this conflict of rights, priority was given to the property rights of the “previous owners”. With this argument the Constitutional Court also dismissed the objection that tenants who could not purchase their dwellings because they were subject to restitution to the “previous owners” were discriminated against in comparison with all other tenants, who had the right to buy their dwellings. It held that the factual circumstances of the two groups of tenants were profoundly different. While the rights of one group of tenants had to be reconciled with the rights of the “previous owners” of the dwellings, no such limitation on the rights of the other group of tenants was necessary. The tenants also had a pre-emption right in the event that the “previous owner” decided to sell the dwelling, which could be entered in the land register and was weaker only than the pre-emption right of a co-owner (Section 176 of the SZ-1).

61. As for other rights and benefits, including the right to a non-profit rent, the Constitutional Court considered that all the previous holders of occupancy rights had been placed on an equal footing, regardless of the origin of their dwellings. These rights, in turn, were comparable to the level of protection granted to tenants in other States. General allegations that the legislative definition of the non-profit rent was inappropriate were not sufficient to warrant constitutional review.

62. The Constitutional Court also dismissed the complaint that the tenants did not have locus standi in denationalisation proceedings. Inasmuch as the proceedings were decisive for tenants’ rights, tenants enjoyed locus standi. In particular, this concerned the tenants’ right to compensation for any money invested in the dwelling, which could be claimed from the “previous owner”. On the other hand, on the basis of such financial investments, the tenants did not acquire a property right or the status of claimants in denationalisation proceedings.

63. As to the restitution to the “previous owners” of expropriated dwellings in which tenants were living, the Constitutional Court had already ruled that the relevant provisions of the ZDen were not contrary to the Constitution. Furthermore, the “previous owners” were not free to enter into any lease agreements with the tenants; they merely took over the existing leases the tenants had signed with the municipalities. Finally, the Constitutional Court dismissed the Association’s allegations that Section 1 of the Administrative Disputes Act as then in force was unclear and contrary to the Constitution.

3. Other relevant domestic proceedings

64. In 2005, the Supreme Court deliberated in a case, brought by applicant no. 6 (Mr Primož Kuret), concerning the right of a family member to demand a new non-profit lease after the tenant of the denationalised flat in question had died. The Supreme Court reversed the case-law and decided that users of denationalised flats could not demand the continuation of a non-profit lease following the demise of the tenant; in the Court’s view, they were entitled only to a lease, and the “previous owner” should have been free to determine the amount of the rent without any limitations.

65. Subsequently, a close family member of a deceased former holder of occupancy rights filed a petition for a review of the constitutionality of this new case-law, and a constitutional complaint. In a decision of 7 October 2009 (no. U-I-128/08, Up-933/08), the Constitutional court held that it was unconstitutional to interpret Article 56 of the SZ (see paragraph 19 above) in such a manner that, after the death of the holder of a protected tenancy, the “previous owners” was obliged to lease it to the family members of the deceased for a non-profit rent. It thus confirmed the 2005 decision of the Supreme Court. However, the Constitutional Court clarified that the spouse or the common-law partner of a deceased tenant at the time of the enactment of the SZ was entitled to continue the lease at a non-profit rent.

66. The applicants observed that this case-law allowed “previous owners” to fix an unreasonably high rent, thereby preventing the family members of the deceased tenant (other than the spouse or the common-law partner) from continuing the lease. They alleged that from 2009 onwards a mortis causa transferability of the right to lease had de facto been eliminated.

4. Individual situations of the applicants

67. As the file contained no specific examples of individual situations, in September 2008 the Court requested the applicants to submit factual information in respect of the amount of the original rent in 1991 and that of the present non-profit rent, the surface of the flat, its state of repair and its current market value, as well as a chronological overview of the increases in rent and in the statutory minimum wage.

68. In their reply of 9 November 2008, the applicants gave evidence that they were all original former holders of specially protected tenancies or their legal successors.

69. They stated that the first significant increase (of 100%) in the non-profit rent took place in 1995. At that time, its ceiling annual amount was still 2.9% of the value of the dwelling. Further gradual changes were introduced by the 2000 amendments to the SZ (rent increase of 31%), by the Constitutional Court’s decision and by the SZ-1 (rent increase of 23%). The ceiling amount for the annual non-profit rent was currently 4.69% of the value of the dwelling. They stated that a further rent increase of 43% was foreseen in different municipalities. The non-profit rent paid at the time by the tenants equalled 434.5% of the non-profit rent fixed in 1992.

70. However, the applicants stated that factual information provided by them showed that the non-profit rent in Ljubljana and Maribor was still relatively affordable, as it was below the market rent (see annex 1 – “Table resuming the situation of the individual applicants”). The situation was allegedly different in the countryside, but no concrete information was provided. In certain cases there was no historical data as the documentation no longer existed because of the lapse of time and because the tenants had moved.

71. In 2008, the average market price per square metre in Ljubljana city centre ranged between 2,000 and 3,000 euros (EUR) and in Maribor it was between EUR 1,000 and 2,000 per square metre. As to the statutory minimum wage, in 1991 it amounted to 6,000 Slovenian tolars (SIT, nominally EUR 25.03). In August 2003 it was SIT 110,380 (nominally EUR 460.6) and in July 2008 EUR 566.53.

72. The applicants also stated that they had made significant financial investments in the renovation and refurbishment of the dwellings.

73. Five applicants (Mr Kuret, Ms Berglez, Ms Bertoncelj, Mr Milič and Ms Jerančič) had been forced to move out. Mr Kuret was the only applicant who pursued the legal avenues up to the Constitutional Court. His constitutional complaint was dismissed on 6 July 2006 for lack of legal interest, as he had concluded a settlement with the “previous owner” on 17 March 2006 (see annex 1 – “Table resuming the situation of the individual applicants”).

74. The other applicants, who still occupied the dwellings, were allegedly under pressure, either through court proceedings or through correspondence with the lawyers representing the “previous owners”. They complained about various forms of chicanery and intimidation. All the applicants had had to seek legal advice.

5. The method of calculation of the non-profit rent

75. The parties also gave details as to the method of calculation of the non-profit rent which was introduced by the SZ. Its level might be agreed upon by the parties to the contract of lease, but they had to apply the methodology provided by the law and not exceed the maximum permitted level of non-profit rent. It always represented a percentage (2.9% for dwellings more than 25 years old) of the administrative value of the flat, which was determined by the housing authorities according to the following formula:Value of the dwelling = number of points X value of the point X usable area X effect of size of the dwelling (corrective factor)

76. The rent for dwellings for which tenancy agreements were concluded with the former holders of occupancy rights could not exceed the rent level charged for dwellings more than 25 years old. The values of the point and of the correction factor for surface measurements had always been determined by primary or secondary legislation and as such amended several times. As a general rule, the non-profit rent for newly constructed or renovated flats, of better quality and better equipped, was higher than for older, less well-maintained flats. The non-profit rent was also determined in the light of the state of repair at the time the dwelling was allocated to the tenant, that is, before any investment was made.

77. The Government pointed out that the non-profit rent was a cost-based rent covering the economic costs of a dwelling. It did not include taxes to be paid by the “previous owner” and was meant to cover:

- the depreciation of the dwelling (assets enabling the owner to replace a run-down dwelling after a certain number of years – initially 200, then 60);

- the cost of the capital invested;

- the management of the dwelling;

- the investment and routine maintenance.

78. According to the 1991 rules, for previous holders of occupancy rights, the annual non-profit rent could not exceed 2.9% of the value of the dwelling. These rules were revised in 1995, bringing the percentage to 3.8% for dwellings constructed after 1991. From March 2000 until December 2004, the percentage was 3.81% for dwellings more than sixty years old and 5.08% for dwellings less than sixty years old. For former holders of occupancy rights or persons with whom the “previous owner” was obliged to conclude a contract of lease under Section 56 of the SZ (see paragraph 19 above) the percentage could not exceed 3.81%.

79. The Government observed that the new calculation method had been applied progressively over a span of five years; thus, according to them, for tenants of denationalised dwellings the rent, in real terms, had decreased from 2.9% in 2000 to 2.54% in 2004.

80. The Housing Act 2003 brought the value of the maximum permitted annual non-profit rent up to 4.68% of that of the dwelling, and this notwithstanding the fact that a study ordered by the Ministry responsible for the Environment and Spatial Planning had shown that a rent covering all costs of the use of the dwelling should amount to at least 5.63%. A progressive increase in rents was scheduled up to 31 December 2006 (see Section 181 of the SZ-1 and the Government Decree on the methodology for calculating rents in non-profit dwellings). As a result, for dwellings less than sixty years old, the non-profit rent was immediately decreased by 8%, from 5.08% to 4.68%; for dwellings more than sixty years old (which were the majority), it increased by 21.80%, from 3.81% to 4.68%; lastly, in the approximately 2,500 denationalised dwellings it increased by 84.20%, from 2.54% to 4.68%. On 1 January 2007, the annual non-profit rent in all buildings amounted to 4.68% of the value of the dwelling. It did not increase any more after that date.

81. The Government also emphasised that the value of the “housing point”, which was based on the annual average price per square metre of constructed non-profit dwellings divided by 320 (average number of points for newly constructed non-profit dwellings), increased from 1.88 German Marks (DEM) in 1991 to DEM 3.75 in August 1996. Non-profit rents increased no further in real terms, but they did increase in relation to the growth of the DEM. For dwellings rented after the implementation of the new calculation method introduced in 2000 the value of the point was fixed at DEM 5.39 (and later at EUR 2.63). Each dwelling was given a certain number of points which would take into account the construction quality, time of construction, type and quality of joinery elements, floorings, walls, fitted installations, type and availability of common areas, thermal and acoustic insulation and negative impacts on the use of the dwelling.

82. According to the SZ-1 (Section 118(8) and (9)) the location of the dwelling could also affect its value. The effect of the location on the level of the non-profit rent could be determined by each municipality and might amount to a maximum of 30% of the rent; however, at the time of the Government’s observations, only two municipalities (Nova Gorica and Mengeš) had adopted provisions in this respect; this meant that in all other municipalities, the location of the building did not affect the rent.

B. Relevant international documents

1. Resolution 1096 (1996) of the Parliamentary Assembly

83. On 27 June 1996 the Parliamentary Assembly of the Council of Europe adopted Resolution 1096 on measures to dismantle the heritage of former communist totalitarian systems. In the resolution, the Parliamentary Assembly confirmed that in the transition of the former communist totalitarian systems into democratic systems, the principles of subsidiarity, freedom of choice, equality of opportunity, economic pluralism and transparency of decision-making should play a role. Some of the principles which were mentioned in the resolution as means of achieving these goals were the separation of powers, freedom of the media, protection of private property and the development of civil society. The Parliamentary Assembly also considered that the key to peaceful coexistence and a successful transition process lay in striking the delicate balance of providing justice without seeking revenge.

84. The Parliamentary Assembly advised that property, including that of the churches, which was illegally or unjustly seized by the State, nationalised, confiscated or otherwise expropriated during the reign of communist totalitarian systems in principle be restored to its “previous owners” in integrum, if that was possible without violating the rights of current owners who acquired the property in good faith, or the rights of tenants who rented the dwelling in good faith, and without harming the progress of democratic reforms. In cases where this was not possible, just satisfaction should be awarded. Claims and conflicts relating to individual cases of property restitution should be decided by the courts.

85. The Parliamentary Assembly also recommended that the authorities of the countries concerned verify that their laws, regulations and procedures complied with the principles contained in the Resolution, and revise them if necessary. This would, in the view of the Parliamentary Assembly, help to avoid complaints about these procedures being lodged with the control mechanisms of the Council of Europe under the European Convention on Human Rights, the Committee of Ministers’ monitoring procedure, or the Assembly’s monitoring procedure under Order No. 508 (1995) on the honouring of obligations and commitments by member States.

2. Policy Guidelines on Access to Housing for Disadvantaged Categories of Persons, adopted by the European Committee for Social Cohesion

86. On 14 – 16 November 2001 the European Committee for Social Cohesion (the “ECSC”) adopted the Policy Guidelines on Access to Housing for Disadvantaged Categories of Persons prepared by the Group of Specialists on Access to Housing. In the guidelines the ECSC reaffirmed the significance of housing and the corresponding responsibilities of national governments, as recognised in a number of international documents such as the European Social Charter, the UN Habitat Agenda and the Declaration on cities and other human settlements in the new millennium adopted by the UN General Assembly. The ECSC established that according to these documents the Council of Europe member States should ensure affordable housing to disadvantaged categories of persons, by creating an appropriate legal framework for housing markets with regard to property rights, security of tenure and consumer protection. The policies adopted should expand the supply of affordable housing and provide better legal security of tenure and non-discriminatory access to housing for all.

87. In paragraph 15, the ECSC also stated:

 “In countries that have privatised considerable parts of their public housing stock in recent years, appropriate housing policy measures should be introduced which counteract undesirable consequences of housing privatisation and restitution for disadvantaged categories of persons. For example, in countries with a high rate of “poor owner-occupiers”, more emphasis should be given to a general housing allowance system and to public support for the renewal of housing units, for the benefit of both owners and tenants in restituted dwellings.”

88. The ECSC defined the term “disadvantaged categories of persons” as denoting all persons or groups of persons who are disadvantaged on the housing market for economic, social, psychological and/or other reasons and who consequently require appropriate assistance to facilitate their access to housing.

3. The 2003 Report of the Commissioner for Human Rights on his visit to Slovenia

89. On 15 October 2003 the Commissioner for Human Rights, Mr Alvaro Gil-Robles, issued a Report on his visit to Slovenia in May 2003, in which, among other topics, he addressed the situation of tenants living in former socially-owned dwellings which were eventually returned to the “previous owners”. He likened the position of tenants who lost their privileged specially protected tenancy to the position of landlords who acquired the ownership of such dwellings but not the use of them. He observed that, in contrast to the majority of other holders of specially protected tenancy, the tenants in denationalised dwellings did not have the advantage of being entitled to purchase the flats they lived in, and he acknowledged the fear of many of them, now already elderly, that they would not be able to afford possible rent increases in the future.

90. For the landlords, however, he noted that they could not really take possession of the dwellings either. They took over ownership of the property with a number of obligations vis-à-vis the tenants, whom they had not themselves selected and for whom they had to maintain the social character of the rent charged. Thus, the “previous owners” were not supposed to make any substantial profit from their property, nor could they terminate the tenancy agreement without complying with a number of specific conditions. He also pointed out that the fact that the landlords had finally recovered their expropriated dwellings was fair and could not be contested as such.

91. The Commissioner thus established that “there can be neither winners nor losers in this situation, because both sides may be considered disadvantaged,” and concluded his report by recommending that the legislator consider a new amendment to the legislation “to settle the problems facing one side while also protecting the interests of the other.”

4. Collective complaint No. 53/2008, European Federation of National Organisations Working with the Homeless (FEANTSA) v. Slovenia

92. Following its ratification, the Revised European Social Charter became a part of the Slovenian legal order as from 11 April 1999. In September 2008 the international non-governmental organisation FEANTSA (European Federation of National Organizations Working with the Homeless) filed a collective complaint (no. 53/2008) with the European Committee of Social Rights. It alleged that tenants of flats denationalised at the end of the socialist regime had suffered a revocation of the title of property, an increase in the price of accommodation and a reduction of the possibilities of acquiring adequate accommodation.

93. In a decision on the merits, of 8 September 2009, the European Committee of Social Rights concluded that Slovenia was violating the right to housing of former holders of occupancy rights under Article 31 §§ 1 (promotion of access to housing of an adequate standard) and 3 (accessibility of price of housing to those without adequate resources), Article 16 (right of the family to social, legal and economic protection) and Article E (prohibition of discrimination) of the Revised European Social Charter.

94. The Committee held that prior to SZ the right of tenants of non-profit flats in Slovenia to adequate housing was clearly protected by law. The rules introduced by SZ (allowing former holders of occupancy rights to purchase, at an advantageous price, the flats in which they were living, and whose ownership had been transferred, on a transitional basis, to public entities) were also deemed to ensure sufficient legal security in the occupation of the dwellings. The Committee considered, however, as regards former tenants of flats that had been returned to the “previous owners”, that the combination of insufficient measures for the acquisition of or access to a substitute flat, the evolution of the rules on occupancy and the increase in rents, were likely to place a significant number of households in a very precarious position, and to prevent them from effectively exercising their right to housing.

95. Moreover, Slovenia had failed to show that the affordability ratio of the poorest applicants for housing was compatible with their level of income. Former holders of occupancy rights, in particular elderly persons, had been deprived of the opportunity to purchase the flat they lived in, or another one, on advantageous terms, and of the opportunity to remain in the flat, or move to and occupy another flat, in return for a reasonable rent.

96. Finally, the treatment accorded to former holders of occupancy rights in respect of flats acquired by the State through nationalisation or expropriation, and returned to the “previous owners”, was manifestly discriminatory in relation to the treatment accorded to tenants of flats that were transferred to public ownership by other means. The Committee observed that there was no evidence of any difference in the situation of the two categories of tenants, and that the original distinction between the forms of public ownership in question was in no way imputable to them and had no bearing on the nature of their own relationship with the public owner or administrator.

97. On the basis of the decision of the European Committee of Social Rights on the merits, at its 1116th meeting the Committee of Ministers of the Council of Europe adopted Resolution CM/ResChS(2011)7, welcoming the measures already taken by the Slovenian authorities and their commitment to bring the situation into conformity with the Social Charter. The Committee of Ministers looked forward to Slovenia reporting, in its next report concerning the relevant provisions of the European Social Charter, that the situation had been brought into full conformity.

98. The applicants alleged that in spite of the above decision and resolution, no substantial step had been taken to positively regulate their situation.

5. Agreement on Succession Issues

99. The Agreement on Succession Issues was the culmination of nearly ten years of intermittent negotiations under the auspices of the International Conference on the former Yugoslavia and the High Representative (appointed pursuant to Annex 10 to the Dayton Peace Agreement). It entered into force between Bosnia and Herzegovina, Croatia, the then Federal Republic of Yugoslavia, “The former Yugoslav Republic of Macedonia” and Slovenia on 2 June 2004 (see Đokić, cited above, § 43). Article 6 of Annex G, concerning specially protected tenancy, reads as follows:

“Domestic legislation of each successor State concerning dwelling rights (‘stanarsko pravo/ stanovanjska pravica/ станарско право’) shall be applied equally to persons who were citizens of the SFRY and who had such rights, without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.”

COMPLAINTS

100. The applicants complained under Article 1 of Protocol No. 1 that they had been deprived of their specially protected tenancy without adequate compensation.

101. Relying on Article 8 of the Convention, they further argued that losing their specially protected tenancy had deprived them of their homes.

102. Under Article 14 of the Convention, taken in conjunction with Article 1 of Protocol No. 1, the applicants argued that they had been treated differently from the tenants of dwellings not subject to restitution, as they could not purchase the flats they were occupying without the agreement of the “previous owners”.

103. Under Article 6 § 1 of the Convention, the applicants maintained that they did not have sufficient access to a court to challenge the alleged infringements of their rights and that they did not have locus standi in the denationalisation proceedings.

104. Relying on Article 13 of the Convention, the applicants complained that they did not have at their disposal any effective legal remedies to challenge the alleged violations of their substantive Convention rights.

THE LAW

A. The Government’s objections to admissibility

1. Incompatibility ratione temporis

(a) The Government’s objection

105. The Government objected that the application was incompatible ratione temporis with the provisions of the Convention. They observed that the facts which constituted the alleged interference with the applicants’ rights were the entry into force, on 19 October 1991, of the SZ and the transferral to municipalities and other legal persons of the ownership of previously socially-owned dwellings, which provided a legal basis for the abolition of social property in the housing field and for the denationalisation process. From that moment onwards, it should have been clear to the applicants that the dwellings which they were occupying would be subject to restitution under the provisions of the ZDen (which entered into force on 7 December 1991). The occupancy rights were cancelled from the Slovenian legal system at that moment, which is the time at which the alleged “expropriation” took place.

106. The Government also recalled that interference with an individual’s home or his or her property could not constitute a continuous violation (see, inter alia, Blečič v. Croatia [GC], no. 59532/00, § 86, ECHR 2006-III, and Malhous v. the Czech Republic [GC] (dec.), no. 33071/96, ECHR 2000-XII). The mere consequences of this instantaneous act could not be interpreted as a “state of deprivation” constituting a continuing violation. Since the SZ and the ZDen entered into force prior to Slovenia’s accession to the Convention (28 June 1994), the application related to facts outside the temporal jurisdiction of the Court. Such conclusion could not be altered by the proceedings instigated later before the Constitutional Court, as the rejection of the constitutional initiative was not a new interference with the applicants’ rights.

107. The option to purchase the dwellings provided for by Articles 117 et seq. of the SZ was not an entitlement arising from the former occupancy right, but a method of privatisation enabling the transition to a market economy. Such an option was not a compensation for the withdrawal of the occupancy right. The same applied to the “third model” of substitute privatisation. In any event, the applicants never expressed their wish to avail themselves of the possibility provided for by this model. Under these circumstances, the applicants’ allegation that the violation of their rights was the result of a number of acts adopted by the Slovenian State after the ratification of the Convention could not be accepted.

(b) The applicants’ position

108. The applicants observed that at the time of Slovenia’s ratification of the Convention the right of former holders of specially protected tenancy in denationalised dwellings to purchase a flat under the so-called “third model” of substitute privatisation was acknowledged by law. It was repealed five years later, at the end of 1999 (see paragraphs 31-33 above).

109. It was true that some measures relevant to the applicants’ situation had been adopted before the ratification; however, the violations complained of in the present application resulted of a combination of these measures with those enacted after the ratification. The latter were decisive for the violations in issue.

110. As far as their complaints under Article 14 of the Convention and Article 1 of Protocol No. 1 were concerned, the applicants recalled that the latter provision did not prohibit deprivation of property, which could be acceptable if just compensation was paid to the injured party. In the present case, the deprivation of the just compensation and of the right to purchase occurred in November 1999, when the “third model” was repealed by the Constitutional Court. This event was also the one which constituted discrimination contrary to Article 14.

111. Practically all the alleged interferences with the applicants’ Article 8 rights had occurred after the ratification and no ratione temporis objection could be retained concerning those denationalisation proceedings complained of under Article 6 of the Convention which were still pending at the date of ratification.

112. The applicants also recalled that the Convention was a binding legal act in Slovenia even before its ratification: on 27 November 1990 the National Assembly had accepted that the Declaration of Respecting Fundamental Conventions of the Council of Europe and the Constitutional Court was in practice applying the Convention provisions (see Constitutional Court’s decision of 10 December 1992, no. U-I-98/91-21).

(c) The Court’s assessment

113. The Court reiterates that its jurisdiction ratione temporis covers only the period after the date of ratification of the Convention and its Protocols by the respondent State. After ratification, the State’s acts must conform to the Convention or its Protocols and subsequent facts fall within the Court’s jurisdiction even where they are merely extensions of an already existing situation (see, for example, Almeida Garrett, Mascarenhas Falcão and Others v. Portugal, nos. 29813/96 and 30229/96, § 43, ECHR 2000-I). Accordingly, the Court is competent to examine the facts of the present case for their compatibility with the Convention only in so far as they occurred after 28 June 1994, the date of the ratification of the Convention and Protocol No. 1 by Slovenia. It may, however, have regard to the facts prior to ratification inasmuch as they could be considered to have created a continuous situation extending beyond that date or may be relevant for the understanding of facts occurring after that date (see Hutten-Czapska v. Poland [GC], no. 35014/97, §§ 147-153, ECHR 2006‑VIII).

114. The Court observes that the applicants’ complaints relate to the overall situation affecting them as a result of the adoption of the Housing Act 1991 and of the Denationalisation Act 1991. This situation obtained on 28 June 1994 and continues more than 18 years after the entry into force of the Convention and its Protocols for Slovenia (see, by contrast, Šilih v. Slovenia [GC], no. 71463/01, § 140, ECHR 2009). Moreover, a legal decision affecting the applicants’ situation, notably the rejection by the Constitutional Court of the third model of substitute privatisation, occurred on 25 November 1999 (see paragraph 33 above), which is more than five years after the entry into force of the Convention in respect of Slovenia.

115. The Government’s plea of lack of jurisdiction ratione temporis must accordingly be dismissed.

2. Non-exhaustion of domestic remedies

(a) The Government’s objection

116. The Government objected that the applicants had failed to properly exhaust domestic remedies. They recalled that internal remedies should be lodged in compliance with the procedural rules and requirements laid down in the national legislation. In the present case, the Government were ready to accept that the applicants had in part exhausted domestic remedies by complaining, in their quality of members of the Association of Tenants which was representing their interests, about the establishment of the ownership right in favour of the municipalities and about the restitution of dwellings. They noted, in this respect, that the Constitutional Court had recognised that the Association had legal interest in the constitutional review of the relevant provisions of the SZ and of the ZDen (see paragraph 56 above). Apart from complaints concerning their personal circumstances, the applicants were mainly targeting the legal framework of the housing reform; therefore, a constitutional initiative for review of the constitutionality thereof was an effective remedy.

117. However, that constitutional initiative referred to a “considerable aggravation of the situation of former holders of occupancy rights to denationalised dwellings ... because the inclusion of profit elements change[d] the previously non-profit rent to profit rent”, without quoting any constitutional provision which was allegedly contravened. A general allegation that the legal definition of non-profit rent was inappropriate was not sufficient for a review of constitutionality, and indeed the Constitutional Court had rejected this part of the initiative as being manifestly ill-founded (see paragraph 61 above).

118. As to the applicants’ constitutional complaint, it was lodged in contravention of the provisions of the domestic legislation and not admitted for consideration (see paragraphs 53-54 above). In this regard, the Government noted that the administrative action was rightly rejected by the Administrative and Supreme Courts for procedural reasons (it could be lodged against a silence vis-à-vis a petition but not, as in the present case, against a response to such a petition – see paragraphs 49-52 above) and that, therefore, the Constitutional Court could not establish any violation of constitutionally protected rights.

119. As to their individual situations, the applicants had at their disposal numerous remedies under the law of obligations, allowing them to request respect for their tenancy relationship and protection of their contractual rights, as well as other civil law remedies (general compensation protection, protection from the disruption of peaceful enjoyment of possession, for example). In the event of poor maintenance of the dwelling, inspectors could inspect the premises and order that the necessary work be done at the “previous owner’s” expense. Tenants could also request assessment of the level of rent by an administrative body and the refund of non-depreciated investments on moving out, provided that these investments were made with the consent of the community of tenants or of the “previous owner”, as well as the full recovery of investments that had increased the value of the real estate. Indeed, investments had been repaid to applicants nos. 1 (Mrs Berger-Krall), 5 (Mrs Kugler), 7 (Mr Logar) and 9 (Mr Milič). Applicants nos. 3 (Mrs Bertoncelj), 6 (Mr Kuret) and 10 (Mrs Zalar) had withdrawn their claims for the refund of investments. Applicants nos. 2 (Mrs Berglez) and 4 (Mrs Jerančič) had never made such a claim, while the claim of applicant no. 8 (Mrs Marguč) had been rejected for failure to supplement it when so invited by the competent authority.

(b) The applicants’ position

120. The applicants observed that in the present case the only available and effective legal remedy at their disposal was an initiative for review of the constitutionality of the relevant legislation, as the measures complained of were of a general and abstract nature (abolishment of the specially protected tenancy and the right to purchase and subsequent failure to provide another form of just compensation), and did not depend on individual and specific legal acts or actions. This was also true for the limitations of the tenants’ rights and the introduction of new grounds for eviction, as well as the exclusion of the applicants from the denationalisation proceedings, which found their way directly into the law. This was also acknowledged in substance by the Government.

121. In Slovenia it was possible to abrogate a law or to establish that it was unconstitutional or contrary to the Convention only through an initiative for review of constitutionality.

122. It was true that the Association, of which the applicants were members, had also tried to obtain redress through a petition to the Government, subsequent judicial review of administrative acts and a constitutional complaint (see paragraphs 43-54 above). However, this was definitely not a legal remedy required to be exhausted under Article 35 § 1 of the Convention. It was a mere petition to the authorities in order to alert them to the inappropriateness of the existing legislation. Neither the Constitutional Court nor the Supreme Court had jurisdiction to amend the domestic law through judicial review of administrative acts or in response to a constitutional complaint. As regards the latter remedy, the Constitutional Court could only annul or amend an individual or specific act or action, not a law or other regulation.

123. The civil law remedies mentioned by the Government (see paragraph 119 above) were not means whereby the applicants could remedy the alleged systematic violations of their Convention rights, but only of regulating the mutual legal rights and obligations arising from the landlord/tenant relationship. The present application was not directed against violations of the applicants’ rights by the “previous owners”, but against the fact that the authorities had deprived the applicants of their former rights without just compensation and imposed new rights and obligations allegedly incompatible with the Convention. When individual applicants referred to disputes with the “previous owners”, it was to further demonstrate how questionable the new legislation was.

124. In any event, the Government had not shown that any remedy other than an initiative for review of constitutionality was accessible to the applicants and afforded them any real prospects of obtaining redress.

125. Through the Association, the applicants made use of the only available effective remedy (the initiative for review of constitutionality), challenging all the relevant legal provisions of the SZ. On 10 September 2003 the Association widened the initiative by referring to the provisions of the SZ-1. It developed the arguments in terms of compatibility with the Convention which were subsequently put forward in the present application. Albeit eventually rejected, the petition was examined on the merits by the Constitutional Court (see paragraphs 56-63 above).

(c) The Court’s assessment

126. The general principles on the exhaustion of domestic remedies are exposed in Sejdovic v. Italy ([GC], no. 56581/00, §§ 43-46, ECHR 2006‑II). The Court will apply these principles to the different legal avenues invoked by the Government. It emphasises, at the outset, that the rule of exhaustion of domestic remedies is neither absolute nor capable of being applied automatically; in reviewing whether the rule has been observed, it is essential to have regard to the particular circumstances of the individual case. This means, among other things, that the Court must take realistic account not only of the existence of formal remedies in the legal system of the Contracting Party concerned but also of the general legal and political context in which they operate, as well as the personal circumstances of the applicants (see, among other authorities, Akdivar and Others v. Turkey, 16 September 1996, §§ 66 and 68-69, Reports of Judgments and Decisions 1996-IV; Orchowski v. Poland, no. 17885/04, §§ 105-106, 22 October 2009; Demopoulos and Others v. Turkey (dec.) [GC], nos. 46113/99, 3843/02, 13751/02, 13466/03, 10200/04, 14163/04, 19993/04 and 21819/04, § 70, ECHR 2010-...; Kurić and Others v. Slovenia [GC], no 26828/06, § 286, 26 June 2012).

127. The Court first notes that in their observations (see paragraph 123 above) the applicants explained that their complaints were not directed against alleged violations of their rights by the landlords, but against the regulations adopted by the authorities in the housing field. It follows that civil claims against individual landlords are not remedies that relate to the breaches alleged. The applicants were therefore not required to exhaust them.

128. As to the fact, invoked by the Government, that the applicants’ administrative action was rejected for failure to comply with the formal requirements laid down in domestic law (see paragraph 118 above), the Court observes that the complaint concerned a petition to the Government aimed at having the relevant legislation amended. In such a case the authorities enjoy wide discretion as to whether the requested amendment is necessary. Thus, in the Court’s opinion, the petition was not a legal judicial remedy which the applicants would be required to exhaust before introducing an application in Strasbourg. The same applies to the subsequent administrative proceedings aimed at challenging the rejection of the petition.

129. The Court further observes that, in their quality of members of the Association of Tenants, the applicants challenged the legislation, which in their view affected their Convention rights, before the Constitutional Court by means of a constitutional initiative (see paragraphs 55-63 above). The Government acknowledged that this remedy was, in principle, an effective one (see paragraph 116 above) and the Constitutional Court examined it on the merits. Had it accepted the applicants’ arguments, the Constitutional Court had the power to annul the relevant parts of the legislation in question. Under these circumstances, the Court considers that the applicants were not required to make use of any other legal remedy.

130. It is true that the Government alleged that part of the initiative – notably, the part referring to the inclusion of profit elements in the hitherto non-profit rent – was rejected because the applicants had failed to quote any constitutional provision they considered had been contravened (see paragraph 117 above). The Court notes, however, that the inclusion of profit elements constitutes only a minor part of the applicants’ complaints brought before it. The latter are mainly directed against the whole framework of the housing reform and against the repeal of the “third model” of substitute privatisation. Moreover, by arguing that the legal definition of the non-profit rent was inappropriate, the applicants have, in substance, complained about its proportionality and reasonableness in the specific circumstances of their case. That being so, the alleged failure to quote a relevant constitutional provision before the Constitutional Court could not amount to a failure to comply with requirements laid down in Article 35 § 1 of the Convention.

131. It follows that the Governments’ objection of non-exhaustion of domestic remedies should be dismissed.

3. Lack of victim status

(a) The Government’s objection

132. The Government argued that the applicants lacked victim status within the meaning of Article 34 of the Convention. They relied on the case of Willis v. the United Kingdom (no. 36042/97, 11 June 2002), in which the Court considered that the risk, for the applicant, of being deprived of a widow’s pension because of his gender was strictly hypothetical, as it was not certain that he would qualify for such a pension. In the present case, the SZ protected the legal status acquired by holders of occupancy rights by guaranteeing them the right to a tenancy relationship for an indefinite period at a non-profit rent. Therefore, it did not affect the applicants; the simple fact that the ownership relationship was regulated in a manner that did not meet their expectations could not give them victim status. The applicants alleged, in substance, that their rights had been violated directly as a result of amendments to the legislation, and challenged the legislative framework regulating the tenancy relationship. In this connection, the Government referred to Strunjak and Others v. Croatia ((dec.), no. 46934/99, 22 March 1999), in which the Court stated that the termination of an occupancy right did not, per se, amount to a violation of Article 8 of the Convention and that an applicant invoking that provision should show that judicial proceedings had been started against him in view of obtaining his removal from the premises (also, Sorić v. Croatia (dec.), no. 43447/98, 16 March 2000).

133. Moreover, the applicants’ allegations concerning the deterioration of their legal status were purely hypothetical. The alleged introduction of new grounds for eviction and of the right of the “previous owner” to move the tenant to another dwelling was contained in statutory provisions which had not been applied to the applicants and had had no direct legal consequences for them. Their allegations in this respect were therefore an actio popularis.

134. As far as the applicants complained that the transformation of the occupancy right into contractual tenancy had placed their fate in the hands of private individuals, and therefore put their right to a home in jeopardy, the Government observed that “jeopardy” was a mere subjective term not corresponding to any legally recognised right. The repeal by the Constitutional Court of the so-called “third model” of substitute privatisation had not directly affected the applicants, as proven by the fact that none of them had applied to purchase a substitute dwelling (only applicant no. 5 – Mrs Kugler – had asked for a list of available unoccupied dwellings, which had not been sent to her as she had failed to enclose, as requested, the relevant documents).

135. At the date of entry into force of the SZ, applicant no. 6 (Mr Kuret) was not the holder of the occupancy right but merely one of the legal users of the dwelling to which his father (Mr Niko Kuret) held the right. At that time, as an immediate family member, he did not even have the right to a tenancy relationship. Therefore, in the Government’s opinion, the provisions of the SZ had not had any direct effect on his legal situation. Moreover, applicant no. 6 had concluded a friendly settlement “of all mutual relations”, in which he explicitly withdrew any further claims against the “previous owner” of the dwelling, and therefore also the possibility to appeal against the Supreme Court judgment of 21 April 2005 (no. II Ips 98/2004 – see paragraph 64 above). He had thus forfeited any victim status he might have had.

136. The same applied to applicant no. 2 (Mrs Berglez), who had not lodged a request to purchase the dwelling she was living in or any other suitable dwelling. She had refused to sign a contract of lease and thus lived in the dwelling without the necessary legal title. In the Government’s opinion, she was in no position to claim that her legal status had deteriorated because of the action taken by the Republic of Slovenia.

137. The Government also recalled that, by analogy with the former legislation of the Socialist Republic of Slovenia, the SZ had established that where a former holder of occupancy rights no longer needed housing protection (because he owned another dwelling or because of other circumstances), the “previous owner” of the dwelling in which he was living was not obliged to sign a lease contract. This was notably the case for applicants nos. 2 (Mrs Berglez), 7 (Mr Logar), 9 (Mr Milič) and 10 (Mrs Zalar), who had resolved their housing needs by purchasing another dwelling. The Government argued that under these circumstances, they could not be considered victims of the alleged violations.

138. The Government also pointed out the following:

- The spouse of applicant no. 1 (Mrs Berger-Krall) owned a vineyard cottage and a house of 91 square metres (m²) suitable for habitation;

- Applicant no. 2 (Mrs Berglez) had received a grant of EUR 38,752.08 and a soft loan of EUR 28,774.92; she had purchased a dwelling in Maribor;

- Applicant no. 7 (Mr Logar) had received a grant of EUR 53,276.42 and a soft loan of EUR 89,223.57; he had purchased an 82 m² dwelling;

- Applicant no. 8 (Mrs Marguč), together with her husband, owned a 64 m² house in a prestigious location by the sea in Piran, which was suitable for habitation;

- Applicant no. 9 (Mr Milič) had received a grant of EUR 45,975.98 and a soft loan of EUR 21,524.02, and had purchased a 75 m² dwelling;

- Applicant no. 10 (Mrs Zalar) had received a grant of EUR 32,262.99 and a soft loan of EUR 72,737.02; she had purchased two dwellings, one measuring 84 m² and of the other 148 m².

139. Moreover, in their observations of 5 June 2012 the applicants had stated that they had never explicitly or implicitly claimed that they did not have sufficient means of subsistence or that they had no property and would therefore be entitled to social benefits or subsidised rent (see paragraph 144 below). In the Government’s opinion, this statement was an admission that the continuation of the tenancy for a non-profit rent did not constitute a threat to the family lives of any of the applicants and that the increases in the non-profit rent did not violate their Convention rights. As a close family member could not purchase the dwelling unless he or she obtained the written consent of the former occupancy right holder, applicant no. 6 (Mr Primož Kuret), who had not obtained such consent, could not be considered a victim from this point of view, as he was not a member of a protected category.

(b) The applicants’ position

140. The applicants reiterated that the alleged violations of the Convention, which had deprived them of the specially protected tenancy and of the right to purchase, plus the interferences with the right to rent and the situation in denationalised dwellings, were the result of acts of the legislative body and/or the Constitutional Court. These abstract and general acts had interfered with the legal and actual status of the applicants. By November 1999, when the “third model” was repealed by the Constitutional Court without warning (see paragraph 33 above), none of the applicants had availed themselves of the right to purchase a substitute dwelling. They were therefore victims of the abolition of this model. Those former holders of occupancy rights who had availed themselves of that right before 1999 had found a satisfactory solution to their housing problem and had not applied to the Court, as no violation of their Convention rights had occurred.

141. The applicants also reiterated that their complaints were not directed against the “previous owners” of the denationalised dwellings, but against the systemic situation created by acts or omissions imputable to the Government. It was not the “previous owners” who were violating the domestic legislation, but rather the domestic legislation which was violating the applicants’ Convention rights. The actions of some landlords were referred to in order to further substantiate the effects of the lease relationship imposed by the domestic legislator and the conflicts created by it. The alleged violations of the Convention would have occurred even in the absence of tense tenant/landlord relations in individual cases, as the contractual terms of the lease provided for in the domestic law would still have been inadequate to compensate for the deprivation of the specially protected tenancy.

142. Similarly, it was immaterial to establish whether the applicants had an arguable claim for the reimbursement of the investments made in the dwellings and whether they had tried to enforce such a claim. These considerations were relevant only with regard to the scale of the damage suffered, and therefore with regard to the question of the application of Article 41 of the Convention. The fact that the applicants had invested extensively in the dwellings they were occupying was important because it proved that under the specially protected tenancy they had regarded themselves as the de facto owners of their flats.

143. The fact that individual applicants might have reached settlements with the “previous owners” was also immaterial. Those settlements concerned only their relations with the landlords, not with the Republic of Slovenia. The same applied to those applicants who had chosen the so-called “second model” of substitute privatisation, moving out of their dwelling and buying costly alternative flats on the free market with a public contribution (see paragraph 30 above). Indeed, this fact did not constitute compensation or redress for the violations of the Convention alleged in their application to the Court. By reaching friendly settlements with the landlords or by choosing the “second model”, the applicants had only been trying to avoid, as far as possible, the deterioration and uncertainty of their housing situation. Again, these facts were relevant only with regard to the scale of the damage suffered.

144. Furthermore, the applicants had never claimed that they were without means and did not possess any property, or that they were entitled to special social welfare benefits (such as subsided rent). The application was lodged by persons of average income and normal social status. The protection of the Convention was not limited to socially vulnerable individuals, or dependent on the property situation of the applicants. The possible social threat was nevertheless an element of suffering and distress, to be taken into account under Article 41 of the Convention.

145. Some applicants had inherited other real estate after being deprived of their specially protected tenancy and before ownership of another suitable dwelling became a ground for eviction. This could not lead to the conclusion that the matter had been resolved within the meaning of Article 37 § 1 (b) of the Convention, as the circumstances complained of still obtained and the effects of the alleged violations had not been redressed. The applicants had not recovered their specially protected tenancy or the right to purchase, or received any fair compensation. After having lodged the application, some of the applicants were still in their original dwellings and their situation had worsened. Those who had moved out had done so in order to avoid problems and the lack of legal protection, and for many of them this had meant reducing their standard of living by moving to worse dwellings or making great material sacrifices.

146. The applicants also pointed out the following:

- In February 2003 applicant no. 1 (Mrs Berger-Krall) had divorced from her husband, who had moved out of her flat. Therefore, any reference to Mr Janez Krall’s properties (see paragraph 138 above) was irrelevant; in any event, the real estate concerned was not equivalent to applicant no. 1’s dwelling;

- It was true that applicant no. 8 (Mrs Marguč) was the owner of a holiday home in Piran (see paragraph 138 above), which was bought before 2003, when ownership of another suitable dwelling was not yet a ground for termination of the lease. That dwelling was in another part of Slovenia, and was a poorer housing unit in terms of surface and construction than the flat Mrs Marguč was occupying. The applicant’s health made it difficult for her to climb several storeys (which would be the case in the holiday flat) and she worked in Ljubljana. The market value of the flat in Piran was between EUR 150,000 and EUR 180,000, so even if she sold it, and taking into account that she had no savings, Mrs Marguč would not be able to buy a suitable dwelling in Ljubljana.

(c) The Court’s assessment

147. As far as the Government contends that the applicants’ allegations are purely hypothetical and that they were not directly affected by the measures complained of (such as the repeal of the “third model” or the new grounds for eviction – see paragraphs 132-134), the Court reiterates that the Convention guarantees individual rights and does not envisage the bringing of an actio popularis for the interpretation of the rights it contains, or permit individuals to complain about public acts simply because they consider that those acts contravene the Convention (see Tanase v. Moldova, [GC], no. 7/08, § 104, ECHR 2010-...). Complaints must therefore be brought by or on behalf of people who claim to be victims of a violation of one or more of the provisions of the Convention. The concept of victim must, in theory, be interpreted autonomously and irrespective of domestic concepts such as those concerning an interest or capacity to act. In order for an applicant to be able to claim to be a victim of a violation of the Convention, he or she must be able to show that they have been directly affected by the impugned measure (see Sanles Sanles v. Spain (dec.), no. 48335/99, ECHR 2000-XI, with further references, and L.Z. v. Slovakia (dec.), no. 27753/06, § 71, 27 September 2011).

148. In the present case, the Court considers that the substance of the applicants’ complaints should be interpreted in the sense that, taken as a whole, the housing reform and its subsequent amendments have adversely affected the situation of those former holders of specially protected tenancies who occupied denationalised dwellings. Moreover, the latter have allegedly been discriminated against compared with other categories of tenants. Under these circumstances, the Court is of the opinion that individual applicants cannot be regarded as deprived of victim status for the simple reason that some of the new rules have not been (or not yet been) applied to them. In the ambit of the present case, in order to substantiate their interest in challenging the new legislation, the applicants should basically prove that they belong to the category of tenants whose rights were allegedly suppressed without just compensation and which has allegedly been discriminated against. All the applicants fall into this category.

149. Insofar as the Government refer to the particular circumstances of individual applicants (notably, their entitlement to occupy the flats they live in, their ownership of other real estate, their financial situation and/or the financial grants received by them – see paragraphs 135-139 above), the Court considers that these issues do not touch the applicants’ victim status as such but are relevant considerations to assess whether there was interference with the applicants’ rights under Article 1 of Protocol No. 1 and Article 8 of the Convention and, in the affirmative, whether this interference was proportionate and necessary in a democratic society.

150. It follows that the Government’s objection for lack of victim status formulated in paragraphs 132-139 above should be dismissed.

4. Failure to respect the six-month rule

(a) The Government’s objection

151. The Government observed that the applicants had complained, inter alia, about the repeal of the “third model”, and had expressly indicated that this had marked the “termination of the process of ‘expropriation’ of the occupancy right”. However, the “third model” ceased to apply in 2000, following the Constitutional Court’s decision of 25 November 1999 (no. U-I-268/96), applicable as of 8 January 2000 (see paragraph 33 above). It followed that the application, introduced on 15 March 2004, was out of time as far as this specific complaint was concerned.

(b) The applicants’ position

152. The applicants observed that the Constitutional Court’s decision of 25 November 1999 repealing the “third model” was not the final decision regarding the status of former holders of specially protected tenancies. This decision did not mean that municipalities were no longer obliged to facilitate the realisation of the right to purchase of former holders of occupancy rights, but merely created a legal vacuum. The highest authorities in Slovenia started to discuss possible solutions, including financing substitute dwellings from the State budget. Only with the enactment of the Housing Act 2003 (see paragraphs 35-38 above) did it become clear that the legislator would not replace the “third model” with any other suitable solution. The Association introduced an initiative for review of constitutionality which was rejected by the Constitutional Court only on 25 September 2003 (see paragraph 56 above). Had the Constitutional Court accepted that the status of previous holders of specially protected tenancies was incompatible with the Convention, the problem would have been solved in the domestic legal order. The application, which was lodged with the Court within six months of the Constitutional Court’s decision, could therefore not be considered out of time.

(c) The Court’s assessment

153. The Court reiterates that as a rule, the six-month period runs from the date of the final decision in the process of exhaustion of domestic remedies (see Varnava and Others v. Turkey [GC], no. 16064/90, § 157, ECHR 2009‑.., and B.Z. and Others v. Sweden (dec.), no. 74352/11, § 31, 29 May 2012). It further observes that, by repealing the “third model”, the Constitutional Court deprived the applicants of the possibility of purchasing a comparable substitute flat on favourable terms from the municipalities (see paragraphs 31-33 above). In the applicants’ opinion, this fact had worsened their situation in respect of the housing reform and deprived them of the one means of compensation for the loss of the specially protected tenancy that they considered to be fair, thus upsetting the fair balance between the private and public interests.

154. Basing themselves, inter alia, on this fact, the applicants subsequently introduced a constitutional initiative for review of the constitutionality of the relevant legislation and judicial practice. The Court has already found that this remedy was an effective one (see paragraph 129 above). The Constitutional Court had to determine whether the housing reform and its subsequent developments – including the repeal of the “third model” – had illegitimately affected the situation of former holders of specially protected tenancy rights in denationalised buildings. It was also called upon to rule on a plea of discrimination based on the fact that tenants in denationalised dwellings could not purchase their flats (see paragraph 60 above).

155. In the light of the above, the Court considers that the final domestic decision concerning the applicants’ complaints was the Constitutional Court’s decision of 25 September 2003 dismissing their constitutional initiative. As the present application was introduced on 15 March 2004, the Government’s objection that the application was lodged out of time should be dismissed.

5. Abuse of the right of petition

(a) The Government’s objection

156. The Government underlined that in “several passages of their individual applications” the applicants “either refer[red] to untrue data or [did] not provide the Court with essential data”. In their opinion, this constituted an abuse of the right of individual petition.

157. In particular, applicant no. 2 (Mrs Ljudmila Berglez) had submitted false information in her application about her entitlement to live in the dwelling, and withheld crucial information about the dwelling she had purchased and the financial help she received from the State (see the individual circumstances of applicant no. 2 described in paragraphs 234 and 252-253 below).

158. Applicant no. 3 (Mrs Ivanka Bertoncelj) had explicitly waived her tenancy rights and failed to inform the Ljubljana Administrative Unit about the outcome of her talks with the “previous owner” of the dwelling. This information and full information about the agreement concluded on 25 November 2005 (entailing payment of monetary compensation in her favour in the amount of EUR 100,000 – see paragraph 254 below) was not submitted to the Court. On 29 November 2005, applicant no. 3 had transferred her right to compensation to her daughter.

159. In his application of 10 November 2008, applicant no. 9 (Mr Dušan Milič) had not mentioned the fact that the “previous owner” had been ordered to pay him SIT 400,000 (approximately EUR 1,670), representing the revaluation of the 20% participation paid by Mr Milič to acquire the occupancy right, or that on 28 June 2007 he had obtained the non-refundable sum of EUR 45,975.98 (see paragraph 260 below).

(b) The applicants’ position

160. The applicants considered the Government’s allegations concerning the abuse of the right of individual petition “misplaced and offensive”.

161. It was not true that applicant no. 2 (Mrs Berglez) had given false information to the Court. Only eleven years after her eviction (which occurred in 2000), agricultural land she had inherited had been classified as a building site; its value had suddenly risen and Mrs Berglez had been able to sell it and buy a 65 m² flat in Maribor, which was smaller than her previous home and not as nice.

162. Applicant no. 3 (Mrs Ivanka Bertoncelj) had decided to leave her dwelling and opt for the “third model”; however, this model had been repealed and she could not afford to purchase another dwelling on the free market. She had reached an agreement with the “previous owners” only to obtain the reimbursement of her investments.

163. Lastly, it was true that after lodging his application applicant no. 9 (Mr Milič) had voluntarily left his dwelling. However, this information had not been withheld from the Court; the applicant had explicitly explained that he was solving his housing issue elsewhere. The sum received by the applicant in public financial contributions was relevant only in connection with Article 41 of the Convention and for this reason had not been described in detail in the application form.

(c) The Court’s assessment

164. The Court points out that, according to Rule 47 § 6 of the Rules of Court, applicants, acting in person or through their legal representatives, are under the continuous obligation to keep the Court informed of all important circumstances regarding their pending applications. It recalls that an application may be rejected as abusive under Article 35 § 3 of the Convention if, among other reasons, it was knowingly based on untrue facts (see Rehak v. Czech Republic (dec.), no. 67208/01, 18 May 2004, and Keretchashvili v. Georgia (dec.), no. 5667/02, 2 May 2006). Incomplete and therefore misleading information may also amount to an abuse of the right of application, especially if the information concerns the very core of the case and no sufficient explanation is given for the failure to disclose that information (see Khvichia v. Georgia (dec.), no. 26446/06, 23 June 2009, and Pirtskhalaishvili v. Georgia (dec.), no. 44328/05, 29 April 2010).

165. Turning to the present case, the Court observes that the Government objects, essentially, that some of the applicants did not provide full information about developments in their housing situation and about the financial help they had received. The applicants disputed this contention.

166. Even assuming that some updates of the applicants’ individual situations were not promptly brought to its attention, the Court considers that this information did not concern the very core of the case, which pertains to the general adverse effects of the housing reform for former holders of specially protected tenancies in denationalised dwellings. Nor can it be said that the application was knowingly based on untrue facts.

167. In these circumstances, the Court finds that the grounds which might have led to the rejection of the present application as an abuse of the right of individual petition are insufficient. The Government’s objection must therefore be dismissed.

B. Complaint under Article 1 of Protocol No. 1 to the Convention

168. The applicants complained that they had been deprived of their specially protected tenancy without receiving adequate compensation.

They relied on Article 1 of Protocol No. 1 to the Convention, which reads as follows:

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”

1. The Government’s objection of incompatibility ratione materiae

(a) Arguments of the parties

(i) The Government

169. The Government objected that the applicants’ complaint was incompatible ratione materiae with the provisions of Article 1 of Protocol No. 1, as the right to reside in a real estate unit not owned by an applicant could not constitute a “possession” (they referred to J.L.S. v. Spain (dec.), no. 41917/98, ECHR 1999-V; Kozlovs v. Latvia (dec.), no. 50835/00, 23 November 2000; Kovalenok v. Latvia (dec.), no. 54264/00, 15 February 2001; H.F. v. Slovak Republic (dec.), no. 54797/00, 9 December 2003; Bunjevac v. Slovenia (dec.), no. 48775/09, 19 January 2006; and Gaćeša v. Croatia (dec.), no. 43389/02, 1 April 2008; and also Durini v. Italy, no. 19217/91, Commission’s decision of 12 January 1994).

170. The Government argued that the applicants’ (unrealistic) expectation that dwellings constructed before the Second World War with private funds (and not with social resources) and nationalised under the socialist system would not be returned to their “previous owners” was based on a misinterpretation of the nature of the occupancy right. They pointed out that Article 1 of Protocol No. 1 should apply only to a person’s existing possessions. The occupancy right did not confer ownership rights and the dwellings had been allocated to the applicants for “management” and permanent use. They had to recognise the authority of the “indirect possessor” (the socially-owned property) in compliance with the social order then in force. The possession of the dwelling was linked to the duration of the occupancy relationship, but was not based on a permanent and inalienable right to ownership or another right in rem.

171. Even though it might be difficult to compare anachronistic concepts of socially-owned property with traditional property in a democratic society, it was clear that the occupancy right was, mutatis mutandis, more akin to a tenancy. According to the Commentary to the former legislation, it was a special set of “management” entitlements, on the basis of which the holder had the right to use the socially-owned dwelling for the purpose of satisfying personal and family housing needs. It was not associated with a particular dwelling but rather with the holder’s personal housing needs and those of his family: should these needs change (for instance because the number of users decreased), the occupancy relationship could be terminated provided that another dwelling that suited the altered circumstances was allocated to the holder of the occupancy right. Moreover, the occupancy relationship could be terminated if the holder had not been using the dwelling, had fully subleased it or if the dwelling was being used by a third person.

172. The holder had to pay the “socially agreed price in the form of rent”; the occupancy right was not transferable (except in cases provided by law) and could not be inherited. Regulated transition was possible to one of the users of the dwelling: the heir of a tenant who at the time of the latter’s death was living in the same flat might enter into the same tenancy relationship with the owner. The holder of occupancy right could not dispose of the dwelling (with the exception of an exchange of socially-owned dwellings) and was not allowed to make alterations without the prior approval of the community of tenants. The occupancy relationship could be terminated on fault-based reasons, which were very similar to the grounds for termination of any tenancy relationship.

173. In the light of the above, the Government argued that the occupancy right was comparable to a tenancy relationship, albeit concluded for an indefinite period. The applicants merely had the right to reside in a dwelling which was not owned by them; this right was considered neither a property right nor any other real right, but was in essence an obligation, established or terminated according to the provisions of the law on obligations. The Constitutional Court’s decision no. Up-29/98, to which the applicants referred (see paragraph 7 above) was an isolated one and could not constitute “case-law”; moreover, it should be understood in the context of the peculiar status of the complainant in that case, who had suffered harm because of the actions of the municipal authority, which had encumbered an asset that was subject to a ban on trade.

174. The Government further observed that the possibility of purchasing the dwelling, provided for in the SZ, did not apply to socially-owned dwellings which had become public property by way of nationalisation, as they were subject to the obligation of restitution. Such possibility did not constitute an entitlement arising from the former occupancy right, and was introduced only later (with the “third model”) for flats other than those occupied by the applicants, as a method of privatisation (and not, as wrongly argued by the applicants, as a kind of compensation for the withdrawal of the occupancy right). Moreover, the right to purchase the dwelling should be differentiated from the pre-emption right guaranteed to any holder of occupancy rights, which depended upon the “previous owner’s” free decision to sell the property. Thus, the applicants had no enforceable right to purchase the flats in which they were living and had no legitimate expectation to acquire ownership of them. In any event, Article 1 of Protocol No. 1 did not guarantee the right to acquire property (Sorić v. Croatia (dec.), no. 43447/98, 16 March 2000; Slivenko and Others v. Latvia (dec.) [GC], no. 48321/99, § 121, ECHR 2002-II; and Kopeckỳ v. Slovakia [GC], no. 44912/98, § 35 (b), ECHR 2004-IX).

175. It was true that the “third model” provided for the option of purchasing another dwelling; however, this model had been abrogated in November 1999. As none of the applicants had applied to purchase such a dwelling, it could not be argued that they had an enforceable claim in this regard.

176. The applicants’ claims for recovery of investments (see Article 25 of the ZDen) could not be considered “possessions” within the meaning of Article 1 of Protocol No. 1 unless there was a “legitimate expectation” based on a regulation or a final judgment. The mere hope that such claims might be granted could not bring Article 1 of Protocol No. 1 into play. The Government never denied the rights of those applicants who had obtained a final favourable decision in this regard. In any event, entitlement to recover investments could not be the basis for the establishment of ownership of the dwellings.

177. As far as applicant no. 2 (Mrs Berglez) was concerned, the Government observed that she had applied to sign a lease contract out of time; her conditional claim had therefore lapsed as a result of her failure to comply with a statutory regulation and could not, for this reason also, be considered a “possession”.

178. The case of Mago and Others relied on by the applicants (see paragraph 180 below) could not be compared with the present one as, unlike Slovenian law, the Dayton Peace Agreement had established that all occupancy right holders in Bosnia and Herzegovina were entitled to return to the homes they had lived in before the war. It was true that under the former regime a socially-owned dwelling could be sold only to its occupancy right holder; however, this was not an entitlement deriving from the occupancy right, but a measure aimed at the preservation of the value of socially-owned property used for housing, and sale was permissible only under certain conditions and at the price determined by the appraiser.

(ii) The applicants

179. The applicants pointed out that the “specially protected tenancy”, which they had acquired in all good faith, implied the exclusive right to live in the dwelling for an indefinite period, the right to transmit it inter vivos or mortis causa to family members who lived with the tenant concerned, and the exclusive right to purchase the dwelling. It thus had all the essential characteristics of a right of ownership and the only thing missing was the title of owner. It was not based on a precarious contract but on a constitutionally protected civil right of a permanent nature, which could be terminated only in legally regulated extreme cases, connected to the fact that in the former social order all individuals should dispose of goods according to their needs. Therefore, the specially protected tenancy constituted a “possession” within the meaning of Article 1 of Protocol No. 1.

180. In any event, according to the Court’s case-law, even a legitimate expectation to lease could be regarded as a possession (Stretch v. the United Kingdom, no. 44277/98, § 32, 24 June 2003). The Court had also held that the cancellation of a specially protected tenancy amounted to a deprivation of possession (Mago and Others v. Bosnia and Herzegovina, nos. 12959/05, 19724/05, 47860/06, 8367/08, 9872/09 and 11706/09, §§ 77-78 and 95, 3 May 2012).

181. Furthermore, it should be kept in mind that at the time of Slovenia’s ratification of the Convention and until the end of 1999, all former holders of specially protected tenancies had the right, not subjected to time limitations, to purchase a dwelling on very favourable terms, either the one they were occupying or, under the “third model”, another comparable flat. In the applicants’ view, this right also constituted a “possession”, as it guaranteed the possibility to acquire ownership of a dwelling upon payment of a minimum financial contribution (5%-10% of the market value of the property – see paragraph 202 below). Its exercise depended upon a unilateral request by the former holder of the occupancy rights, and in most cases the tenants had to wait until the end of the denationalisation proceedings only to establish whether the right to purchase was to be exercised on the existing dwelling or on a substitute dwelling. The Court had considered as a “possession” the right of former holders of specially protected tenancies to purchase a dwelling in other Republics of the SFRY (Brezovec v. Croatia, no. 13488/07, § 45, 29 March 2011). The present case, concerning a right to purchase with no temporal limitation, was to be distinguished from that of Gaćeša v. Croatia ((dec.), no. 43389/02, 1 April 2008), cited by the Government (see paragraph 169 above), where the law clearly fixed a time-limit for exercising the said right and the applicant had missed it. In Slovenia, the so-called “third model” had been repealed by the Constitutional Court without any prior announcement or warning.

182. Contrary to the Government’s allegations, the right to purchase was not just a legal privilege but also a means of compensating for the forceful deprivation of the specially protected tenancy, which was the form the legal title to housing took at that time. This was clear from the nature of the specially protected tenancy, in so far as only its holder – and not other users of the dwelling – was granted the right to purchase, and that right was recognised also in respect of a substitute dwelling. In this connection, the applicants pointed out that the Court had already classified as a “possession” an existing legal right to just compensation for deprivation of property taken prior to the ratification of the Convention (see Broniowski v. Poland [GC], no. 31443/96, § 133, ECHR 2004-V).

(iii) The third-party intervener

183. The International Union of Tenants (hereinafter, the “IUT”), a non-governmental organisation whose headquarters are located in Stockholm, argued that a right to tenancy constituted a “possession” within the meaning of Article 1 of Protocol No. 1 (Larkos v. Cyprus ([GC] no. 29515/95, ECHR 1999-I). Even more so the “specially protected tenancy”, which assured a high level of legal protection to the applicants and their families.

(b) The Court’s assessment

184. The Court considers that the question of the applicability of Article 1 of Protocol No. 1 is linked to the substance of the applicants’ complaint. It therefore decides to join it to the merits.

2. The substance of the applicants’ complaint

(a) Arguments of the parties

(i) The applicants

(α) Scope of the complaint

185. In their application, the applicants alleged that the respondent Government had never defined any reasonable grounds or public interest for depriving them of their specially protected tenancy. The only reason given had been the transition of the previous socialist system to a market economy. In the applicants’ view, only the “previous owners” had benefited from these changes, and conferring a private benefit on a private party could not be in the public interest as defined by Article 1 of Protocol No. 1.

186. In their observations in reply, however, the applicants stated that they did not reproach Slovenia, as such, for the abolishment of the specially protected tenancy and/or the restitution of the dwellings to the “previous owners”. Still, a number of actions and omissions imputable to the State during the period of implementation of the reforms had, in their opinion, violated their Convention rights and created a situation which was unbearable both for the previous holders of occupancy rights and for the “previous owners”. The result of the denationalisation was a purely formal restitution of the dwellings: “previous owners” were obliged to lease them out for a non-profit rent at least until the death of the former holder of the specially protected tenancy and could, in principle, get rid of the tenant only by offering substitute rented accommodation.

187. The legislation which existed from 1994 until 1999, contemplating the “third model” was “more sensible and ... in accordance with the Convention”. However, this model had been withdrawn before the majority of former holders of specially protected tenancies could benefit from it, and from that date onwards the State had failed to ensure the required fair balance. The applicants referred to the dissenting opinion of Judge Lojze Ude appended to the Constitutional Court’s decision of 25 November 1999. Since the end of 1999 former holders of occupancy rights living in denationalised dwellings had been left without any suitable compensation for the deprivation of their specially protected tenancy rights, while at the same time “previous owners” could not fully enjoy their restituted dwellings.

(β) Whether there was an interference with possessions

188. Citing the case of Velikovi and Others v. Bulgaria (nos. 43278/98 and others, § 161, 15 March 2007), the applicants alleged that the interference with their rights under Article 1 of Protocol No. 1 should be examined in the light of the multitude of measures adopted “from 1991 to at least the end of 1999 and possibly also until today”.

(γ) Whether the interference was lawful

189. The applicants first alleged that, regard being had to the fact that the previous Constitution was still in force at the moment of the enactment of the SZ, the deprivation of their specially protected tenancy had been unlawful. However, in their observations in reply they specified that they would not persist in this claim, as the facts in issue occurred in 1991, before the Convention was ratified by Slovenia.

190. The applicants argued that the interference with their possessions had not been lawful on other grounds. They noted that at the time of the Constitutional Court’s decision repealing the “third model” (November 1999 – see paragraph 33 above), Slovenia had already ratified the Revised European Social Charter, which was a constitutive part of its domestic legal order. In its decision of 8 September 2009 (see paragraphs 93-96 above), the European Social Committee had found that the “combination of insufficient measures for the acquisition of or access to a substitute flat, the evolution of the rules on occupancy and the increase in rents” were contrary to Article 31 § 1 of the Charter and that the discrimination between former holders of occupancy rights in the right to purchase was incompatible with Article E. It followed that the Constitutional Court’s decision had violated a binding ratified international instrument.

(δ) Whether the interference was in the general interest

191. The applicants did not contest that the abolition of the specially protected tenancy and the restitution of nationalised property might have been regarded as pursuing a legitimate aim and as being in the general interest. They considered, however, that the same could not be said of the absence of compensation for the loss of their occupancy rights and for the abolition of the right to purchase.

192. By repealing the “third model”, the Constitutional Court had acted against the public interest. This model was meant to balance the interests of the former holders of occupancy rights and the “previous owners” on one side and those of the municipalities on the other side. It had somehow compensated for the fact that for dwellings expropriated through nationalisation or confiscation after the Second World War, the right of former “previous owners” to restitution was given precedence over the right of former holders of specially protected tenancies to purchase on favourable terms. It was the only model that represented an actual right to purchase a dwelling and was possible to use even in the event of restitution and despite the “previous owner’s” reluctance to sell.

193. The Constitutional Court repealed the “third model” suddenly, without any warning or transition period in which former holders of specially protected tenancy might exercise the right to purchase. It did so merely because the “third model” interfered with the property rights of the municipalities, without taking into account the intention behind the legislation, the interests of the private actors involved and the fact that the municipalities had acquired the socially-owned dwellings gratuitously via the enactment of the SZ.

(ε) Proportionality of the interference

194. The applicants recalled that in the restitution process the State should not create disproportionate new wrongs while trying to attenuate old injuries. The legislation should make it possible to take into account the particular circumstances of each case, avoiding putting a disproportionate burden on persons who had acquired possessions in good faith (Pincová and Pinc v. the Czech Republic, no. 36548/97, § 58, 5 February 2003, and Velikovi and Others, cited above, § 178). In the present case, the disproportion lay in the repeal of the tenant’s right to purchase under the “third model”. As from the year 2000, the two alternatives available to the applicants (namely, continuing to lease the existing dwelling or moving out of it and obtaining a financial contribution) were neither a suitable compensation for the loss of the specially protected tenancy nor a comparable alternative to the right to purchase. In this connection, the applicants pointed out the following.

(ζ) Specially protected tenancy

195. The applicants argued that the specially protected tenancy was the strongest civil right over a socially-owned dwelling. It was a sui-generis right comparable to ownership and the exclusive right to purchase precluded everybody else from acquiring ownership of the same dwelling. The specialised literature cited by the Government, stating that the protected tenancy was a non-property right, should not be understood in a negative sense but in the sense that it represented more than a property right, as it also comprised some managerial entitlements. In any event, the Government’s allegations did not take due account of the reasoning followed by the Constitutional Court in its decision Up-29/98 (see paragraph 7 above).

196. It was true, as pointed out by the Government, that specially protected tenancies existed only over socially-owned dwellings; indeed, specially protected tenancy and private ownership were mutually exclusive. The former was a permanent right which could cease to exist only in exceptional situations defined by law (see paragraph 10 above), which could be divided into fault-based grounds (damage, disturbance to other residents, failure to pay the fee) and grounds of needlessness, reflecting the general principle that no-one should have more property than they needed (failure to live in the dwelling for more than six months, total sublease of the dwelling, ownership of another suitable empty dwelling).

197. Under the previous system, dwellings could be sold only to specially protected tenancy holders (see paragraph 6 in fine above); this situation changed dramatically with the housing reform, as former holders of occupancy rights were only given a pre-emptive right; if the tenant refused to pay the “previous owner’s” asking price the dwelling could be sold on the free market.

(η) Leases

198. By contrast, the right to continue the lease represented an essential degradation of the status enjoyed by the applicants under the specially protected tenancy. For the majority of holders of occupancy rights a new leasing relationship (even for an indefinite period) was only a temporary solution until they could purchase a dwelling. However, they had to postpone the realisation of their right to purchase, as in most cases they had to wait for the conclusion of a denationalisation procedure to find out whether the dwelling was being returned to a “previous owner”; they then had to wait for that “previous owner” to say whether he consented to a favourable sale as per the “first model” of substitute privatisation; if not, they could opt for the so-called “third model”. In practice, therefore, until the end of 1999 (when it was repealed by the Constitutional Court – see paragraph 33 above) the latter model was used to good effect only in few cases. After it was repealed the right to lease became a permanent solution, allowing tenants to remain in the dwellings they were occupying.

199. The right to lease was weaker than the specially protected tenancy in that: (a) only persons named in the lease contract were allowed to reside with the tenant; (b) tenants could not engage in commercial activities in the dwelling or sublease it without the “previous owner’s” consent; (c) tenants had to pay a rent (rather than a simple fee) which, even if it was a non-profit one, had risen considerably (more than 600%) since 1991 and not only covered maintenance but was also meant to provide a profit to the “previous owner”; according to the Constitutional Court’s decision of 20 February 2003 (see paragraph 35 above), the new method of calculation of the non-profit rent was to be applied retroactively; (d) tenants could not exchange dwellings; (e) the exclusive right to purchase was replaced by a simple pre-emption right (see paragraphs 36 and 60 above); (f) in the event of eviction or death of the original tenant, the right to lease at a non-profit rent was not transferrable to family members other than the spouse or common-law partner (see paragraphs 64-66 above); (g) the right to use the dwelling was no longer a constitutionally and legally protected right, but merely an ordinary contractual right; (h) it could be terminated at any moment by the “previous owner” if he found the tenant another suitable dwelling (see paragraph 36 above); (i) new fault-based and needlessness-based grounds for eviction were introduced, including ownership of another dwelling (Section 103 of the Housing Act 2003, paragraph 36 above), regardless of whether the latter was empty, “real” (in the sense that it was not just a holiday home) and the moving entailed a substantial deterioration of the tenant’s living conditions (all these things were guaranteed under the former legislation). The applicants considered that it was irrational, in 2003, to introduce ownership of another dwelling as a ground for eviction, as this would be consistent with the principles of socialism but not with those of a free market economy. Moreover, where a tenant moved to his own dwelling, the rest of his or her family could not stay in the original dwelling.

200. It is true that the SZ-1 regulated the right of tenants to modernise the dwelling and defined situations in which the “previous owner” could not deny his or her consent to do so; however, a similar right, while not regulated by law, had also been recognised by legal doctrine and case-law to holders of occupancy rights. And in any event, under the previous regulation modernisation without the required consent was not a ground for eviction, while it was so under the new rules.

(θ) The “second model” of substitute privatisation

201. In his report of 8 January 2002 (see paragraph 42 above) the Ombudsman stated that former holders of specially protected tenancy in denationalised dwellings were victims of systematic violations of human rights, and suggested suitable solutions (higher payments to former holders of occupancy rights, or incentives for the “previous owners” to sell). Even though the Ombudsman’s report was formally examined and accepted by the National Assembly, the suggestions it contained were not implemented in the SZ-1, which totally abolished the concept of the right of former specially protected tenancy holders to purchase an existing or substitute dwelling in accordance with the “first and third models” of substitute privatisation. Instead, the 2003 legislation focused on the “second model” (see paragraph 30 above), which had rarely been used and which allowed the tenant to receive financial compensation if he or she decided to move out of the dwelling and purchase another flat on the free market or to build a house.

202. However, according to the SZ-1, in such cases the State contribution amounted only to 15-20% of the market value of the dwelling the tenant was leaving. This meant that in order to acquire a comparable property, he or she had to pay approximately 80-85% of its value. By contrast, the right to purchase under the “third model” allowed former specially protected tenancy holders to accede to ownership by paying approximately 5-10% of the value of the dwelling in instalments over a span of twenty years. It was true that under the “second model”, the tenant could apply for a loan from the Housing Fund for the remaining sum to be paid. However, according to the applicants only people who would be eligible for ordinary bank loans could obtain such loans, and the interest rate on them was even worse than on commercial bank loans.

203. The abolition of the “third model” effectively forced a majority of former holders of occupancy rights to buy dwellings on the free market (which were worse than the dwellings they were leaving in terms of surface, construction and location) by dint of great sacrifices and in numerous cases with the help of their family members. In any event, the proportionality issue to be assessed in the present case was not whether former holders of occupancy rights managed, in one way or another, to have a roof over their heads, but rather whether there was fair compensation for the loss of their rights. The European Committee of Social Rights had found that a disproportionate burden had been put on them, and the applicants asked the Court to reach the same conclusion.

204. Lastly, the applicants claimed that many of them had invested substantial amounts in the maintenance and refurbishment of the dwellings, which had initially been poorly maintained, thereby considerably increasing the value of the flats; yet ownership rights had nevertheless been restored to the “previous owners”.

(ii) The Government

(α) Whether there was interference with possessions

205. The Government argued that the adoption of the SZ did not in any way change the legal status of the applicants, as their occupancy rights were transformed into a tenancy for an indefinite period, with protection against arbitrary eviction by the “previous owner”. The lease could not be terminated if rent was not paid for reasons of financial hardship, there was a possibility of obtaining a subsidised rent and moving to another suitable non-profit dwelling, the lease was transferrable to the tenant’s heirs and the “previous owner” was obliged to maintain the dwelling in good repair, thereby ensuring a reasonable standard of living. The only essential difference with the previous system was that while under the former social ownership regime the owner was not really identifiable – a fact which might have led the applicants to consider themselves as the “owners” of the dwellings –, in the market economy dwellings had identifiable owners. In the Government’s view, this fact alone could not amount to an interference with the rights guaranteed by Article 1 of Protocol No. 1.

206. In this connection, the Government also noted that the holders of occupancy rights were granted leases at non-profit rent levels irrespective of their financial situation. In the past twenty years such rents had increased, but the standard of living in general had radically changed and the non-profit rents paid by the applicants were nothing like free-market rents. Had the “previous owners” not received a sum to cover their costs, their obligation to properly maintain the flats would have constituted a disproportionate burden (see, mutatis mutandis, Hutten-Czapska, cited above, § 198).

(β) General remarks

207. The Government observed that under the previous regime housing policy had mainly been addressed in a spirit of social policy and protection of the standard of living, and thus had a destabilising impact on economic and social development trends. A dwelling was considered as a social, but not an economic entity. The introduction of market relations in the housing economy meant eliminating anachronistic legislative solutions, such as occupancy rights. At the same time, the Government had to provide an appropriate transitional regime in accordance with the principle of trust in the law (which should not be understood to mean that the legislation must remain unchanged). As the Constitutional Court rightly pointed out, in the new legal system the occupancy right encountered other rights and a fair balance had to be struck between them.

208. As explained in paragraph 205 above, the legal status of former occupancy right holders remained, in substance, untouched. They maintained the pre-emption right to which they had been entitled under the previous system. Inspections could be made by the national housing inspectorate, which, in the event of poor maintenance of the dwelling, could order that the defect be remedied at the “previous owner’s” expense. The tenant had the right to obtain compensation for damage suffered due to poor maintenance and reimbursement of excessively high rent. He or she could also demand that the level of rent be checked by a competent body. This degree of protection was not extended, however, to users who under the previous system, did not have occupancy rights or had lost them.

209. As to the tenant’s obligation, he or she had to use the dwelling in accordance with the terms of the lease, to allow the “previous owner” access to the premises (no more than twice a year), and could not change the dwelling layout or install fittings and appliances without the prior written agreement of the “previous owner”. These were basically the same obligations as under the previous regime. However, under that regime failure to respect them resulted in liability for damages, while under the new rules unauthorised changes to the dwelling were grounds for termination of the lease (unless the tenant removed the modifications upon written request by the “previous owner”). When moving out, the tenant was entitled to reimbursement of the non-depreciated part of any useful investment in the dwelling he had made with the consent of the “previous owner”. With such written consent he or she could also sublet part of the dwelling.

210. With ninety days’ notice, the tenant could at any time unilaterally terminate the lease contract without any justification; the “previous owner” could do so only upon providing the tenant with another suitable dwelling.

211. As to the new fault-based grounds for termination of the lease (see paragraph 17 above), they were imposed by the nature of the civil-law relationship and the protection of the other contractual party. Tenants in social distress who could not pay the rent in full were entitled to help from a municipal administrative body, which would pay the “previous owner” the difference in the rent or give the tenant the possibility of renting a socially-owned dwelling. The right to subsidised rent (Sections 26-31 of the Social Assistance Act) was implemented by the social work centres and the method for calculating it was modified in 2005. The cash benefits (including the subsidised rent) could not exceed the legal minimum wage.

212. According to Section 56 of the SZ, when a tenant died the “previous owner” was obliged to sign a lease agreement with the surviving spouse or long-term live-in partner or with one of the immediate family members indicated in the lease contract (see paragraph 19 above). As the Constitutional Court had pointed out (see paragraph 65 above), the transfer of the tenancy to another family member ensured the social function of the dwelling. However, a distinction must be made between the spouse and/or cohabitating partner on the one hand and the other immediate family members on the other: while the purpose of marriage (or long-term partnership) was to permanently live together, the same could not be said of relations with other family members such as children and parents. Had the latter been allowed to continue the tenancy relationship ad infinitum under the same conditions as the former holder of occupancy rights, the balance between the protection of property and the pursuit of its social function would have been upset. In particular, had the family members continued to benefit from the non-profit rent, the “previous owner” would have been prevented from obtaining income from his property, an element which is of special importance in the market economy system. Protection of family members could have been achieved by other means, such as allowances and loans or opportunities to rent other non-profit dwellings.

213. The non-profit rent (see paragraph 75 above) was not an encroachment on the property right of the “previous owner”, but a regulation of the method of enjoyment of the property and a form of protection of the legal situation of former holders of occupancy rights. In assessing it, the financial situation of the tenant was not relevant, whereas the protection of his or her legal status, originating from the former regulation, was a factor to be taken into account. The Government referred to the part of their observations describing the method of calculation of the non-profit rent (see paragraphs 77-82 above).

214. The Government also pointed out that the SZ-1 maintained the principle of protection of the status of former holders of occupancy rights. It introduced the right of the tenant to require the “previous owner” to provide another suitable dwelling or demand a relative reduction in rent for the time during which the dwelling could not be used normally. If renovation work required the tenant’s temporary removal, the “previous owner” was obliged to provide substitute premises and to pay the costs of the move. Moreover, the SZ-1 laid down the conditions under which the “previous owner” could not refuse consent to alterations by the tenant (Section 97), introduced the tenant’s right to a refund of the non-depreciated part of any useful and necessary investments made (Section 98) and stipulated that the “previous owner” could not request the tenant’s removal before having reimbursed the investments the tenant had made in the dwelling (Section 112(2)). As to the fact that ownership of other real estate was a ground for termination of the tenancy, the Government considered that it would be disproportionate to burden the landlord with a tenancy relationship for an indefinite period and a non-profit rent where the tenant had other suitable accommodation at his or her disposal.

(γ) Proportionality of the interference

215. The Government argued that they enjoyed a wide margin of appreciation in reforming the country’s political and economic system. Restitution of dwellings to the “previous owners” was meant to correct the injustices committed in the post-war period and excluded the right of the occupancy right holder to acquire ownership of the same dwelling. The reforms had a legal basis in the SZ and ZDen, as well as in Amendment XCIX to the Constitution, which provided for the transformation of socially-owned property into public and other forms of property to be regulated by law. The occupancy right, a typical element of the former social system based on a planned economy and socially-owned property, could not continue to exist in a market economy.

216. The re-establishment of the ownership rights of “previous owners” of nationalised property and the redress of wrongs suffered by them was a legitimate aim in a democratic society based on the rule of law and respect for human rights. The national legislator had struck a fair balance between competing rights: ownership of dwellings could not be acquired by the holders of occupancy rights against the will of the “previous owner”, but the latter’s right of property was restricted by the obligation to conclude a lease contract for an unlimited period. Moreover, it should be taken into account that the right to purchase the dwelling was never one of the entitlements constituting the occupancy right under the previous system. Occupancy right holders had only a pre-emption right at a price determined by a certified valuator; they could not force or request the purchase.

217. The right to apply to purchase the dwelling bestowed on holders of occupancy rights in buildings acquired with solidarity and mutual housing funds was not meant to be just satisfaction for the withdrawal of the occupancy right, but a measure enabling privatisation and transition from the social-ownership system to a system of private ownership with known owners. The applicants did not have this option as the dwellings in which they were living had not been acquired with mutual funds, but had been coercively nationalised. The legislator had substantial reasons for regulating the situation of these dwellings differently.

218. Furthermore, should the “previous owner” not consent to sell the dwelling, tenants in the applicants’ situation could solve their housing problem by buying a dwelling or building a house on the favourable terms (financial compensation in the amount of a percentage of the dwelling’s value and a loan) provided for in Article 125 of the SZ, under the “second model” (see paragraph 30 above).

219. As to the decision of the European Committee of Social Rights (see paragraphs 93-96 above), it should be emphasised that the obligations resulting from Article 31 of the European Social Charter are obligations of effort and not obligations of result. Moreover, in order to comply with the obligations arising from the said decision, in October 2011 Slovenia had adopted the Rules amending the Rules on the allocation of non-profit dwellings and was in the process of preparing a National Housing Programme, which would be a long-term housing policy for the coming ten-year period and which would confer on the Housing Council the role of advising the Government and monitoring the implementation of the reforms.

220. As far as the abolition of the “third model” was concerned, the Government observed that the Constitutional Court’s decision was founded on the actual and modest financial capabilities of the municipalities. The latter could offer few dwellings for substitute purchase; indeed, in October 1993 the number of vacant dwellings in the whole of Slovenia was only 531 and in former municipalities in Ljubljana the total was 172. It was the duty of the municipalities to make a certain number of public dwellings available to socially weaker and endangered citizens, so they were obliged to give them to people in more urgent social need than the former occupancy right holders in denationalised dwellings. In any event, the financial incentives afforded by Slovenia to solve housing problems constituted adequate “compensation” for any possible encroachment on the occupancy right. It could also be argued that because of the financial participation of the State in the purchase of another dwelling, such compensation was not necessary.

(iii) The third-party intervener

221. The IUT considered that in the process of housing transition and reform, Slovenia had excessively interfered with the rights of specially protected tenancy holders, withdrawing the minimum legal protection assured to tenants in other European countries. According to the IUT, the applicants had been deprived of their specially protected tenancy status without any suitable compensation. The new tenancy rights given to them by the housing reform laws were of a lesser quality. This degradation of their position was not proportionate and justified under Article 1 of Protocol No. 1.

(b) The Court’s assessment

222. The Court considers, in the light of the parties’ submissions, that the complaint raises serious issues of fact and law under the Convention, the determination of which requires an examination of the merits. The Court concludes therefore that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. No other ground for declaring it inadmissible has been established. It must therefore be declared admissible.

C. Complaint under Article 8 of the Convention

223. The applicants alleged that they had been deprived of their homes in breach of Article 8 of the Convention.

This provision reads as follows:

“1. Everyone has the right to respect for his private and family life, his home and his correspondence.

2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.”

1. Arguments of the parties

(a) The applicants

(i) General remarks

224. The applicants basically relied on the same reasons put forward under Article 1 of Protocol No. 1. They argued that by losing their specially protected tenancy, they had been deprived not only of their property but also of their homes. The changes in the leases had further restricted their rights and the new entitlements of the “previous owners” had jeopardised their situation, especially as the non-profit rent had been rising to levels that many of them could hardly afford, exposing them to the risk of eviction for overdue rent. They complained about various forms of chicanery, intimidation and lawsuits on the part of the “previous owners”.

225. The applicants noted that both in 1991 (beginning of the housing reform) and in 1994 (date of Slovenia’s ratification of the Convention) the denationalised dwellings in which they resided constituted their “homes” and the homes of their families. When they and their families had moved into the dwellings and formed a home there, they had done so in good faith and trusting in the permanence and the transferability mortis causa of the occupancy right. At the time of Slovenia’s ratification of the Convention, the specially protected tenancy had already been transformed into a lease; however, this lease was transferable after death to family members, with a fixed ceiling of non-profit rent. “Previous owners” could terminate the lease only on regulated fault-based grounds. This legislation properly protected the Article 8 rights of the applicants and their families.

226. However, the subsequent evolution of the rules on occupancy and the increase in rents forced former holders of occupancy rights either to leave their existing homes or to stay there under worse terms. Indeed, their situation had significantly worsened in the following respects: (a) since 1996, “previous owners” could terminate the lease and evict the tenant if they provided him or her with another suitable dwelling (see paragraph 36 above); (b) since 1995 the structure and ceiling of the non-profit rent had changed in such a manner that it had risen to more than 600% of its initial value and every authority now had the power to arbitrarily raise the ceiling; (c) in 2003 new grounds for eviction had been added, including the ownership of another suitable dwelling, irrespective of whether it was empty and whether moving would entail a fundamental deterioration of the residents’ status (see paragraph 36 above); (d) since 2005 mortis causa transferability of the lease to family members had de facto been excluded (see paragraphs 64-66 above); (e) the “previous owner” was given the right to enter the dwelling twice a year and refusal of entry became a ground for eviction (see paragraph 19 above); (f) in general, there was an essentially limited possibility of freely forming a family in existing housing, there were limitations on the possibility of using and arranging the dwelling in conformity with one’s own needs and wishes and a threat of eviction causing permanent distress was established. The applicants argued that the guarantees afforded by Article 8 should not be understood as only covering the right to a dwelling, but as protecting the status of an individual in his or her existing home.

227. The leasing relation forcefully created by the State was unbearable not only for the former holders of occupancy rights but also for the “previous owners”, who were limited in their disposal of the returned real estate. This created personal and judicial disputes as “previous owners” massively and understandably used all legal possibilities to evict the former holders of occupancy rights and their families. Under these circumstances, the latter tried to solve their housing problem by moving out of their existing dwellings. The situation had become so unbearable that moving became a lesser evil than staying in the dwelling.

228. The case of Sorić v. Croatia, cited by the Government (see paragraph 243 above), was different from the present case in that it concerned a tenant of a private dwelling who had been a tenant ab initio (and not a former holder of specially protected tenancy). The Court had held that even if eviction had not been executed, the threat of eviction was a measure relevant within the meaning of Article 8 of the Convention (see Larkos, cited above, § 28). The same should apply to all actions imputable to the State that effectively limited the protection and free use of an existing home.

229. The applicants considered that the interference with their right to respect for their home was not lawful for the same reasons put forward under Article 1 of Protocol No. 1 (see paragraph 190 above).

230. The Government essentially argued that the measures complained of were aimed at protecting the “previous owners”. The applicants could accept that this was a legitimate aim. However, they alleged that the measures in issue were not “necessary in a democratic society”. In this connection, they recalled that when a “home” was established lawfully, this factor would weigh against the legitimacy of requiring the individual to move. Moreover, removal of an applicant from his or her home was more serious where no suitable alternative existed; the more suitable the alternative accommodation, the less serious the interference with the existing accommodation. The evaluation of the suitability of the alternative accommodation would also involve a consideration of the particular needs of the person concerned (Coster v. the United Kingdom [GC], no. 24876/94, §§ 116-118, 18 January 2001).

231. In the present case, there was no “pressing social need” to reduce the legal protection of former holders of specially protected tenancy. In its case-law, the Court accepted a number of limitations of landlords’ rights which were aimed at ensuring the social protection of tenants. Slovenia, on the other hand, had enacted a number of measures in order to provide “previous owners” with stronger protection than was required under the Convention. Moreover, the interferences complained of were not proportionate to the legitimate aim pursued (the protection of the “previous owners”), especially after the abolition of the “third model”.

(ii) Remarks concerning the individual applicants

232. The applicants provided the following details, in particular, about their individual situations.

233. Applicant no. 1 (Mrs Berger-Krall) had been unable to reach an agreement on the reimbursement of investments with the “previous owners”; an administrative authority had awarded her a little less than EUR 5,000 in this respect. As the denationalisation proceedings were still pending in November 1999, she had not been able to benefit from the “third model”; having no means to buy another dwelling on the free market, she had decided to stay in her existing dwelling on a contractual lease.

234. Applicant no. 2 (Mrs Ljudmila Berglez) considered that the Government’s observations on her case were, in substance, a copy of the arguments and allegations made before the domestic courts by the “previous owners”. She had a specially protected tenancy from her late mother in 1991. The denationalisation decision of the Municipality of Maribor of 16 April 1993 stated, inter alia, that the “previous owners” had to conclude a lease contract with her. They never did so, but continued to charge a rent. When applicant no. 2 was evicted in 2000, her lawyer had filed a lawsuit to draw up a lease contract; this legal action was dismissed as it had been filed against a “previous owner” who had died few months earlier. A new lawsuit was rejected in 2011 as time-barred and because applicant no. 2 had meanwhile received public financial assistance. Contrary to what the Government and the “previous owners” asserted, Mrs Berglez had never refused to sign a lease and the allegations of wrongful behaviour on her part (keeping flammable material, endangering other residents of the building, lack of maintenance of the flat) had never been proven. The Slovenian courts themselves had found that the forceful eviction of the applicant was an arbitrary and unlawful action. It was not true that the applicant had given false information to the Court. Mrs Berglez had inherited agricultural land of negligible value (approximately EUR 15,000) from her parents. Since her eviction in 2000, she had been living on the verge of poverty, moving to different flats rented on the free market and student rooms. Eleven years later the agricultural land she had inherited had been classified as building land, its value had shot up and Mrs Berglez had been able to sell it and buy a 65 m² flat in Maribor, which was worse and smaller than her previous home.

235. Because of the chicaneries of the “previous owners”, in 1999 applicant no. 3 (Mrs Ivanka Bertoncelj) had decided to leave her dwelling and benefit from the “third model”; however, this model had been repealed soon after the filing of her request and Mrs Bertoncelj, who had no financial means, could not afford to purchase another dwelling on the free market. She had reached an agreement with the “previous owners” only to obtain reimbursement of her investments. Applicant no. 3 had gone through severe emotional distress and needed psychiatric help. Because of the pressures exerted on her, she had left her dwelling and settled in a flat that her daughter had purchased.

236. Applicant no. 4 (Mrs Slavica Jerančič) stressed that, as pointed out by the Government, the requests she was receiving from the “previous owners” lacked any foundation under national law; she had nevertheless been a victim of everyday chicanery and pressure which had led her to seek psychiatric help, and had finally decided to move out of her dwelling. The apartment in Kamnik of which she owned half was worse than her previous home; it was significantly smaller and was located in a totally new environment in a different town. Because of her age and the change of environment, Mrs Jerančič had started suffering from depression; she had tried to commit suicide and had been hospitalised for four months in a psychiatric clinic. Subsequently, from 2008 onwards, a friend who was aware of her problems had offered her the use of an empty flat in Ljubljana free of charge.

237. Applicant no. 5 (Mrs Ema Kugler) had not had any problems with the “previous owners” and had not seen any need to leave her dwelling. It was only the selling of her home to new owners that had triggered a number of disputes, while at the same time the “third model” had been abrogated. She had obtained the reimbursement of investments in the administratively determined amount of EUR 3,000.

238. Applicant no. 6 (Mr Primož Kuret) was not the original holder of the specially protected tenancy. The holder was his late father, Mr Niko Kuret, who died on 25 January 1995 and with whom the applicant had been living. Until 2005 the right to purchase a returned dwelling and the right to a lease had been transferable mortis causa to close family members. After the death of his father, applicant no. 6 had wanted to remain in the premises and had accordingly insisted on signing a lease contract. At the end of 1999 he learned that the “third model” had been repealed and that he could no longer purchase a substitute dwelling on favourable conditions. However, after two favourable judgments, in 2005 the Supreme Court had reversed the existing case-law and decided that users of denationalised flats could not demand the continuation of a non-profit lease following the demise of the tenant (see paragraph 64 above). This meant that Mr Niko Kuret’s family had unjustifiably used the dwelling for more than ten years and that the “previous owners” could require them to pay a market rent for that period (a claim which would amount to at least DEM 150,000 plus interest). If such a request had been filed, the applicant and his wife – who had two dependent children – would have gone bankrupt. In 2009 the Constitutional Court confirmed the new case-law of the Supreme Court, to the detriment of the applicant (see paragraph 65 above). Under these conditions, Mr Kuret chose the lesser evil of a friendly settlement with the “previous owner”. He vacated the premises and, being unable to afford a dwelling in the capital, he moved out of Ljubljana.

239. Applicant no. 7 (Mr Drago Logar) had been unable to get in contact with the “previous owners”, and therefore had not known whether they wished to sell the dwelling. For this reason, he had been unable to take advantage of the “third model” before the end of 1999. After 2006 it became clear that the “previous owners” did not intend to sell and that they wished to evict Mr Logar. After a few years of dispute, the “previous owners” offered Mr Logar the reimbursement of his investments plus interest provided that he moved out of the dwelling. Mr Logar accepted this proposal and obtained a financial public contribution under the so-called “second model” of substitute privatisation.

240. Applicant no. 8 (Mrs Dunja Marguč) referred to her submissions concerning her flat in Piran (see paragraph 146 above) and explained that by a judgment of the Ljubljana District Court of 12 May 2009 (upheld by the Higher Court on 6 January 2010), she had been ordered to vacate the premises she was occupying in Ljubljana. Execution proceedings had started in the summer of 2010 and since then Mrs Marguč had been living in the constant fear of being evicted from her dwelling. Should this happen, she would have to choose between homelessness and moving to the flat in Piran, which would mean losing her employment. She had needed psychiatric help.

241. Applicant no. 9 (Mr Dušan Milič) had been unable to benefit from the “third model” because the denationalisation proceedings concerning his dwelling had been pending until 2005. He had decided to move out two years later and to solve his housing problem elsewhere. Notwithstanding some savings and loans from acquaintances and relatives, Mr Milič could not afford to pay a substantial part of the purchase price of his new dwelling and had therefore not been able to enter it in the land register.

242. Applicant no. 10 (Mrs Dolores Zalar) had been unable to benefit from the “third model” because until 1999 it had not been clear who the “previous owners” were (inheritance proceedings concerning the deceased denationalisation owners were still pending) and whether they wished to sell the dwelling. Subsequently, she had agreed with the “previous owners” that she would vacate the premises and that they would pay her EUR 50,000 for her investments. By severely sacrificing her own savings, obtaining a loan from a commercial bank (on more favourable terms than the State loan) and with the financial help of her daughter, Mrs Zalar had solved her housing problem by buying a property outside Ljubljana. This property was not composed of two separate residential buildings (as wrongly stated by the Government – see paragraph 138 above and paragraph 261 below), but of one building only, for which the total floor space and the internal surface had been recorded separately.

(b) The Government

(i) General remarks

243. The Government stressed that Article 8 of the Convention did not include the right to buy a home, but only protected a person’s right to respect for his or her present home (see Sorić v. Croatia (dec.), no. 43447/98, 16 March 2000). As the SZ protected the legal status of former holders of occupancy rights, by guaranteeing them a tenancy for an indefinite period and a non-profit rent, the applicants’ direct possession of the dwellings was not in any way disturbed by the impugned provisions. As the Constitutional Court pointed out, the holders of occupancy rights and their spouses and close family members had the right to continue to live in denationalised dwellings in conditions comparable to those in other European countries (see paragraph 61 above).

244. The SZ maintained for the applicants all the entitlements provided for under the previous arrangement. The continuation of the non-profit tenancy by close family members of the former holder of the occupancy right was excluded (see paragraphs 64-66 above) as it would have placed an excessive burden on the “previous owners”. Ownership of another dwelling had also been a ground for termination of the lease under the previous regulation and it would have been disproportionate to impose a protected tenancy and a non-profit rent where the tenant had other suitable accommodation at his or her disposal.

245. Under the laws of the Socialist Republic of Slovenia there was no guarantee that the holder of the occupancy right would have been able to live in the same dwelling permanently or that the occupancy relationship would remain unchanged. Under Article 106 of SZ-1 (see paragraph 36 above) the protection of the tenant was greater, as the “previous owner” could terminate the lease without justifiable reasons only once with the same tenant, and was obliged to provide him or her with another suitable dwelling. The legal notions of “suitable dwelling” and “justifiable reason” were meant to strike a fair balance between the general interest on one side and the protection of the tenant’s and “previous owner’s” rights on the other.

246. The applicants complained about the non-profit rent covering not only the maintenance costs of the dwelling but also the reimbursement of capital costs and location rent, thus allowing the “previous owners” to make a profit. According to the applicants, Slovenia had continually changed the formula for calculating the non-profit rent to their detriment, a fact which disproportionately increased their financial obligations. In response to these allegations, the Government recalled the method for calculating the non-profit rent (see paragraphs 75-82 above) and underlined that, as pointed out by the Constitutional Court, the national legislation was not supposed to guarantee the permanence and stability of non-profit rents. The dwelling’s value was determined administratively, which meant independently from its market value and, thanks to the legislative formula for calculating it, the non-profit rent had effectively remained unchanged throughout the relevant period. It did not guarantee a profit for the “previous owner”, but covered the cost of any loan or capital the “previous owner” invested in the renovation of the dwelling.

247. The Government objected that the applicants’ allegation of a 700% increase in the non-profit rent was incorrect. Even if it was true that the “point value” had increased, it should not be overlooked that the value of the point depended on the average cost of construction and the estimated average cost of serviced land, thus taking into account the movement of prices in the market. Otherwise, the non-profit rent would have had no connection with maintenance costs, which would then have had to be borne by the “previous owners”. As in the last twenty years economic standards, prices and salary levels had changed, it would be unrealistic to expect the non-profit rent to remain unchanged. Non-profit rents had increased from 1.88% of the value of the dwelling in 1990 to a maximum of 4.68% of the value of the dwelling by 2012. This increase represented a 148% increase in rents. As salaries had also increased, in 1990 the rent for an average two-room dwelling amounted to 7.30% of the average salary, while in 2012 it was 14.70% of it. This meant that rents had only increased by about 100% (and not by 700%) in real terms. Furthermore, non-profit rents were substantially lower than market rents.

248. In view of the above, the Government considered that any purported interference with the applicants’ right to respect for their homes had been in accordance with the law, pursued a legitimate aim and was necessary in a democratic society. Moreover, a fair balance had been struck between the applicants’ rights under Article 8 of the Convention and the rights of the “previous owners”, protected by Article 1 of Protocol No. 1.

(ii) Remarks concerning the situation of individual applicants

249. According to the Government’s data, the current non-profit rents paid by the applicants (or which the applicants would be paying had they continued to live in the dwellings) were the following:

- Applicant no. 1 (Mrs Berger-Krall): EUR 178.73 (EUR 1.73 per m²; estimated market rent: EUR 10 per m²);

- Applicant no. 2 (Mrs Ljudmila Berglez): EUR 204.09 (EUR 1.93 per m²; estimated market rent: EUR 6 per m²);

- Applicant no. 3 (Mrs Ivanka Bertoncelj): EUR 132.83 (EUR 1.17 per m²; estimated market rent: EUR 10 per m²);

- Applicant no. 4 (Mrs Slavica Jerančič): EUR 161.61 (EUR 1.42 per m²; estimated market rent: EUR 11 per m²);

- Applicant no. 5 (Mrs Ema Kugler): EUR 49.16 (EUR 1.13 per m²; estimated market rent: EUR 11 per m²);

- Applicant no. 6 (Mr Primož Kuret): EUR 149.12 (EUR 1.75 per m²; estimated market rent: EUR 10 per m²);

- Applicant no. 7 (Mr Drago Logar): EUR 280.78 (EUR 1.87 per m²; estimated market rent: EUR 11 per m²);

- Applicant no. 8 (Mrs Dunja Marguč): EUR 154.85 (EUR 1.32 per m²; estimated market rent: EUR 10 per m²);

- Applicant no. 9 (Mr Dušan Milič): EUR 229.67 (EUR 3.33 per m²; estimated market rent: EUR 10 per m²);

- Applicant no. 10 (Mrs Dolores Zalar): EUR 170.93 (EUR 1.41 per m²; estimated market rent: EUR 11 per m²).

250. Former holders of occupancy rights who found themselves in financial difficulty could apply for rent subsidies or the allocation of another non-profit dwelling; however, none of the applicants had applied for such benefits and none of them – with the exception of applicant no. 2 (Mrs Ljudmila Berglez) – had ever been recipients of welfare benefits. If they considered that their non-profit rent had not been calculated in accordance with the law, the applicants could have requested a review of its level and – if need be – a reduction of the rent and the repayment of overpaid rent.

251. The Government further observed that it was not established that applicant no. 1 (Mrs Berger-Krall) had ever requested the “previous owners” to eliminate defects in the dwelling. Moreover, she had failed to institute judicial proceedings requesting the “previous owners” to carry out maintenance work (Section 92 of SZ) in order to make the dwelling suitable for normal use. In a decision of 29 November 2010, the Ljubljana Court had ordered the said “previous owners” to pay applicant no. 1 compensation for the investments she had made in the dwelling. Lastly, the husband of applicant no. 1 was the owner of a vineyard cottage and the co-owner of a 91 m² residential building. As a family member of applicant no. 1 owned property suitable for occupation, the applicant was no longer entitled to “protected tenant” status.

252. Applicant no. 2 (Mrs Ljudmila Berglez) alleged that on 8 September 2000 the “previous owners” had broken into her dwelling and emptied it while she was away. The Government noted that the “previous owners” had an interim eviction order to carry out urgent maintenance work requested by the Environment and Spatial Planning Inspectorate. Applicant no. 2 was using the dwelling in a way that was putting other residents in the building at risk, notably by keeping flammable materials in the attic. Mrs. Berglez, who according to the Government had on several occasions been offered the keys of the place where her furniture was being held, had lodged an action for trespassing; in 2007 the Maribor Higher Court upheld her claim and on 25 August 2008 the Maribor Local Court issued an enforcement order which at the time of introduction of the application had not yet been complied with, as the “previous owners” had objected that in 2000 applicant no. 2 did not have any right to be living in the dwelling. Applicant no. 2 alleged that because of the behaviour of the “previous owners”, since September 2000 she had been forced to rent alternative accommodation, a fact which had placed her in financial difficulties. The Government could confirm that applicant no. 2 had never concluded a lease contract with the provisional public owner and had thus never become a protected tenant; her use of the dwelling had been unlawful or not based on a legal title. The two actions filed by Mrs Berglez to force the “previous owners” to sign a lease contract had failed on procedural grounds and because applicant no. 2 had purchased a two-room dwelling in Maribor in the meantime (on 26 November 2010) and thus resolved her housing issue. The Government further noted that applicant no. 2 had been receiving welfare benefits, that she had inherited a large estate from her father, that on 16 May 2011 she had obtained the non-refundable sum of EUR 38,752.08 and that she had been granted a soft loan of EUR 28,774.92 by the National Housing Fund, which she did not use to buy the two-room dwelling in Maribor.

253. In their observations of 8 August 2012, the Government provided additional information concerning the circumstances of applicant no. 2. They observed that in 2000, when it ordered the “previous owners” of the dwelling to carry out maintenance work, the Environment and Spatial Planning Inspectorate did not simultaneously order the applicant’s eviction. However, this body did not have the power to make such an order vis-à-vis a tenant who, like applicant no. 2, was unwilling to vacate the premises. Moreover, she had subsequently purchased a dwelling worth EUR 65,000; as she had received only EUR 38,752.08 from the State, it could be deduced that the land she had inherited had been sold for more than its estimated price (EUR 15,000). Three of the plots were building sites; therefore, the applicant’s allegation that the inherited property consisted only of agricultural land of the poorest quality was false. The new dwelling was acquired on 26 November 2006, while the State financial support was not transferred to the applicant’s account until 16 May 2011. As Mrs Berglez did not indicate that she had obtained a loan, it could be inferred that she had sufficient financial means to purchase the dwelling. Finally, it was worth noting that in 1993 the manager of the building started proceedings against applicant no. 2 for non-payment of rent between April and September 1992, which was a ground for terminating the tenancy relationship.

254. Applicant no. 3 (Mrs Ivanka Bertoncelj) alleged that the dwelling had been completely renovated by her husband three times, in 1958, 1969 and 1984. The “previous owner” had allegedly exerted pressure on applicant no. 3 – through her lawyer and by hiring detectives – to push her to move out of the dwelling, and had refused to authorise repairs. The “previous owner” had eventually filed a lawsuit against applicant no. 3, which was rejected on formal grounds (the “previous owners” had already sold the dwelling and therefore had lost legal interest in the case). The new owners subsequently requested termination of the lease, claiming that they needed the dwelling for their son and his family. These proceedings ended with a court settlement in 2005. Applicant no. 3 vacated the premises and waived all her claims for the recovery of investments; in exchange, she received compensation in the amount of EUR 100,000. Mrs Bertoncelj allegedly later discovered that she had been deceived by the buyers: the dwelling was not for use by their son, but had been connected to their own flat. The Government observed that Mrs Bertoncelj had never started proceedings with a view to having maintenance work done and normal living conditions restored in the dwelling, nor had she introduced an action for trespassing or obstructive conduct. Lastly, applicant no. 3 had never received any welfare benefits and had failed to apply for a subsidised non-profit rent.

255. Applicant no. 4 (Mrs Slavica Jerančič) alleged that the dwelling needed renovation and that the new owner who had bought the property was inspecting the dwelling twice a year, had asked her to pay a normal rent and to put certain deficiencies right and had threatened her with lawsuits. The pressure exerted by the owner was such that Mrs Jerančič had eventually vacated the premises. The Government observed that tenants in denationalised dwellings were protected by the legislation from payment of an excessive rent and that alleged inadequate use of the dwelling did not constitute a ground for termination of the lease. In any event, no such lawsuits had been filed by the owner against applicant no. 4. The applicant was the co-owner of an 83 m² dwelling in Kamnik built in 2006 and suitable for living in. Finally, applicant no. 4 had never received any welfare benefits and had failed to apply for a subsidised non-profit rent; she had never submitted a claim for the reimbursement of investments made in the dwelling.

256. Applicant no. 5 (Mrs Ema Kugler) complained about the poor condition of the dwelling and about the conduct of a new owner who had bought part of the building in 1999 and started construction work and asked Mrs Kugler to move out. The Government observed that in its decision of 14 January 2002 the Environment and Spatial Planning Inspectorate noted that Mrs Kugler had failed to prove her eligibility to use some common areas in which the work had been done. Moreover, the applicant had not lodged an action for trespassing against the owner, or an action to put an end to the disturbances allegedly caused by the work. The work had ended, at the latest, by the middle of 2003, which was more than six months before the introduction of the application before the Court (15 March 2004). The two lawsuits lodged by the owner to force applicant no. 5 to vacate the premises (on the basis of the invalidity of the lease agreement, non-payment of the rent and the housing needs of the owner) were both unsuccessful. These proceedings lasted respectively one year and five months and two years and two months at two levels of jurisdiction. Lastly, applicant no. 5 had never received any welfare benefits and had failed to apply for a subsidised non-profit rent; the “previous owners” had had to pay her compensation for the investments made in the dwelling.

257. Applicant no. 6 (Mr Primož Kuret) had filed an action against the “previous owner” of the dwelling to secure a lease for a non-profit rent. The Supreme Court dismissed the action, considering that the rent should be a normal market rent (see paragraph 64 above). On 17 March 2006 Mr Kuret struck an agreement with the “previous owner”; however, the increased rent and the legal costs had allegedly become unbearable, and applicant no. 6 and his family had left the building in July 2006. The Government argued that applicant no. 6 had lost his victim status by entering into an agreement with the “previous owner” which explicitly and conclusively settled all the issues between them (see paragraphs 73 and 135 above). Moreover, applicant no. 6 had never received any welfare benefits and had failed to request a subsidised non-profit rent.

258. Applicant no. 7 (Mr Drago Logar) alleged that he had completely renovated the dwelling; in June 1994, he was informed that the dwelling had been returned to “previous owners”. From that date until 2006 he had no contact with the “previous owners” and the bills for payment of the non-profit rent stopped coming. As a result, he stopped paying the rent but continued to carry out ordinary maintenance of the dwelling. In April 2006 the “previous owners” asked applicant no. 7 to vacate the dwelling, but no such claim was registered in the Ljubljana District Court. The Government observed that Mr Logar never requested to purchase a substitute dwelling; he never applied for subsidies for non-profit rent, but on 27 October 2011 he received the non-refundable sum of EUR 53,276.42, and he was granted a soft loan of EUR 89,223.57 by the National Housing Fund. Without using this loan, Mr Logar purchased a dwelling of 82 m² in Ljubljana. Finally, by a decision of 7 March 2011, the Ljubljana Administrative Unit ordered the “previous owners” to pay the applicant compensation for the investments in the dwelling.

259. Applicant no. 8 (Mrs Dunja Marguč) and her husband bought a holiday home of about 50 m² in Piran. The “previous owner” of the dwelling she was occupying in Ljubljana then started proceedings for the termination of the lease, on the ground that Mrs Marguč possessed another adequate dwelling. Applicant no. 8 challenged this action, alleging that the holiday home had no heating system and no thermal insulation, and was therefore not adequate for living during the winter season. The first-instance court upheld the action of the “previous owner” and rescinded the lease; it held, in particular, that the Piran home’s shortcomings were the result of Mrs Marguč’s subjective decisions and could easily be overcome by installing insulation and installing heating. The first-instance court also took into account the fact that the applicant and her husband were employed and that the home in Piran was above-standard property by reason of its elite location. The proceedings were currently pending before the Supreme Court. Applicant no. 8 had never received any financial assistance and had not applied for a subsidised non-profit rent; she had submitted a claim for the reimbursement of investments in the dwelling, but had failed to follow it up.

260. Applicant no. 9 (Mr Dušan Milič) had failed to substantiate his allegations of “daily harassment” by the “previous owners” of the dwelling. Moreover, he was unsuccessful in his claim that the building in which he was living had been built in 1987 and therefore could not have been confiscated from the legal predecessor: it appeared from the Ljubljana Local Court’s judgment of 11 June 2002 that the building in question, confiscated in 1949, had only been renovated – and not newly built – in 1987. The “previous owners” was also ordered to pay SIT 400,000 (approximately EUR 1,670) to applicant no. 9, representing the revaluation of the 20% participation paid by Mr Milič for the acquisition of the occupancy right. Finally, on 28 June 2007 he had obtained the non-refundable sum of EUR 45,975.98.

261. Applicant no. 10 (Mrs Dolores Zalar) had failed to established that she had filed two actions against the “previous owners”: one for failure to maintain the dwelling and the other for the establishment of her right to continue to reside there (this latter action was not necessary, as the change in ownership had no effect on her rights as a tenant). Having paid the non-profit rent to the custodian of the denationalised property, applicant no. 10 could easily have defended herself against further potential financial claims from the “previous owners”. At Mrs Zalar’s request, the Environment and Spatial Planning Inspectorate ordered the “previous owners” to replace the windows of the dwelling. Applicant no. 10 could have used the same procedure to solve the problems of poor maintenance of the chimney and the roof. She had never applied for subsidies for non-profit rent, but on 27 October 2011 had received the non-refundable sum of EUR 32,262.99 and was granted a soft loan of EUR 72,737.02 by the National Housing Fund. Without using this loan, Mrs Zalar had purchased two pieces of residential property (one of 84 m² and the second of 148 m²); she had also filed a claim for the recovery of the investments in the dwelling she was occupying, but had later withdrawn it.

(c) The third-party intervener

262. The IUT observed that the applicants should have enjoyed protection under Article 8 of the Convention. However, they had been deprived of their rights in relation to existing housing in a way which was incompatible with that provision.

2. The Court’s assessment

263. The Court considers, in the light of the parties’ submissions, that the complaint raises serious issues of fact and law under the Convention, the determination of which requires an examination of the merits, at which stage the Court will also address the question of whether those applicants who voluntarily vacated the premises may still claim to be “victims”, under Article 34 of the Convention, of the facts complained of. The Court concludes therefore that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. No other ground for declaring it inadmissible has been established. It must therefore be declared admissible.

D. Complaint under Article 14 of the Convention, taken in conjunction with Article 1 of Protocol No. 1

264. The applicants alleged that they had been discriminated against vis-à-vis bona fide buyers of nationalised dwellings and other previous holders of specially protected tenancy. They invoked Article 14 of the Convention, taken in conjunction with Article 1 of Protocol No. 1.

Article 14 of the Convention reads as follows:

“The enjoyment of the rights and freedoms set forth in [the] Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.”

1. Arguments of the parties

(a) The applicants

265. The applicants argued that, as tenants of nationalised flats, they had been deprived of the right to purchase their dwellings, unlike all those previous holders of specially protected tenancies who had been living in dwellings not subject to restitution. In addition, even though they had a right akin to a property right, they were treated differently from bona fide buyers of nationalised dwellings, who could not be compelled to restitute their properties.

266. Moreover, unlike other previous holders of specially protected tenancies, the applicants could no longer purchase a substitute dwelling because of practical and legal obstacles. They complained about the Constitutional Court’s decision of 25 November 1999 repealing the “third model” (see paragraph 33 above).

267. The applicants recalled their submissions according to which the specially protected tenancy and the right to purchase under the “third model” were “possessions” (of which they had been deprived) within the meaning of Article 1 of Protocol No. 1 (see paragraphs 179-182 above). Article 14 of the Convention was therefore applicable in conjunction with that provision.

268. Under the “third model”, in force at the time of Slovenia’s ratification of the Convention, the difference between holders of specially protected tenancy who were occupying socially-owned dwellings and those who, like the applicants, were occupying denationalised dwellings lay not in whether they had a right to purchase, but in whether they were able to realise that right over an existing dwelling or over a substitute dwelling. It was only with the abolition of the “third model” in November 1999 that the holders of occupancy rights in denationalised dwellings, unlike other specially protected tenancy holders, were deprived of the right to purchase.

269. In the applicants’ view, this difference in treatment had no objective and reasonable justification. They observed that all holders of occupancy rights had been deprived of their specially protected tenancy and that this deprivation required compensation, irrespective of whether the dwelling had been acquired by solidarity means or had once been expropriated. Indeed, both kinds of dwellings were equal socially-owned property. Moreover, the right to purchase under the “third model” was not connected to the existing dwelling: it could also be exercised over another (substitute) dwelling. In the applicants’ view, this proved that the essence of the right to purchase did not derive from the dwelling itself and from its characteristics, but from the status of holder of a specially protected tenancy. The right to purchase continued to exist if the dwellings were not denationalised.

270. The applicants also believed, for the same reasons enumerated under Article 1 of Protocol No. 1 (see paragraphs 191-193 above), that the difference in treatment complained of did not pursue a legitimate aim in the public interest. The Constitutional Court’s reasoning could only be understood to mean that former specially protected tenancy holders residing in denationalised dwellings were less worthy than other former holders of occupancy rights. As persons in the applicants’ situation had to bear an excessive burden (see paragraphs 194-204 above), there had not been a reasonable relationship of proportionality between the means employed and the aim sought to be realised. After the repeal of the “third model”, the burden of the denationalisation process was no longer carried by the State or the municipalities.

271. The applicants lastly emphasised that the European Committee of Social Rights had found a violation of the discrimination clause (Article E) contained in the Revised European Social Charter (see paragraphs 93 and 96 above).

(b) The Government

272. The Government first maintained that, as the applicants’ claims were incompatible ratione materiae with the provisions of Article 1 of Protocol No. 1 (see paragraphs 169-178 above), Article 14 of the Convention was not applicable. This concerned, in particular, the right to purchase the dwellings, as the right to acquire property was not guaranteed by Article 1 of Protocol No. 1.

273. They further observed that with regard to privatisation of dwellings the SZ rightly established two legal regimes: one for socially-owned dwellings acquired through solidarity and mutual housing funds and one for socially-owned dwellings that became general national property through nationalisation. The latter category included formerly privately-owned housing units, in respect of which the right of a denationalisation claimant excluded the right of the occupancy right holder to acquire the same property in kind. Only for the first category of dwellings was it possible to confer on the occupancy right holders a right of pre-emption, which was the right to purchase the property at a discount amounting to 30% of its value, less the amount of own participation still not refunded and the value of own investments, which were reflected in the increased value of the dwelling. 90% of that price could be paid in monthly instalments over a period of twenty years. In the event of a one-off payment within sixty days of the signing of the purchase contract, the buyer was entitled to a discount amounting to 60% of the value of the property (see paragraph 15 above).

274. For denationalised dwellings, the holders of occupancy rights could acquire property on these terms only with the agreement of the “previous owner”. To regulate matters otherwise would have been tantamount to nationalising the properties anew. If they could not obtain the “previous owner’s” agreement, they had the option to obtain a payment amounting to 30% of the value of the property and a loan if they agreed to vacate the premises within two years from the restitution of the dwelling to the denationalisation claimant (see paragraph 30 above). In addition to that, the “third model” (see paragraph 31 above) had introduced the possibility of purchasing a comparable substitute flat on favourable terms from the municipality. Former occupancy right holders were also unable to purchase dwellings owned by the Pension and Disability Insurance Community, as these dwellings had been built to cater for the housing needs of retired people.

275. According to the Constitutional Court, the right to denationalisation was an entitlement, based on the constitutional right to private property. The existence of a “previous owner” was an objective and reasonable justification for a difference in treatment of the holder of occupancy rights as far as the purchase of the dwelling was concerned. No discrimination between different categories of holders of occupancy rights existed with regard to the possibility of continuing the tenancy. The Government underlined that unequal treatment of unequal situations in proportion to their inequality could not amount to a violation of Article 14 of the Convention. As the circumstances of all former occupancy right holders were not equal, it was impossible to treat them in the same manner.

(c) The third-party intervener

276. The IUT considered that the applicants had been discriminated against vis-à-vis other specially protected tenancy holders. While the latter had been given the right to purchase existing or substitution dwellings on favourable terms, this means of compensation had subsequently been repealed for the applicants.

2. The Court’s assessment

277. The Court considers that the question of the applicability of Article 14 of the Convention, taken in conjunction Article 1 of Protocol No. 1, is linked to the substance of the applicants’ complaint. It therefore decides to join it to the merits.

278. The Court considers, in the light of the parties’ submissions, that the complaint raises serious issues of fact and law under the Convention, the determination of which requires an examination of the merits. The Court concludes therefore that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. No other ground for declaring it inadmissible has been established. It must therefore be declared admissible.

E. Complaint under Article 6 § 1 of the Convention

279. The applicants maintained that, since the most important changes in the housing policy had been introduced by statute, they did not have sufficient access to a court to challenge the alleged infringements of their rights. Moreover, they had been excluded from the denationalisation proceedings.

They relied on Article 6 § 1 of the Convention, which, insofar as relevant, reads as follows:

“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...”

1. Arguments of the parties

(a) The applicants

280. The applicants underlined that the only legal avenue open to them had been the “petition” and the subsequent constitutional complaint, and the constitutional initiative lodged by the Association on behalf of its members. After the decision of the Constitutional Court dismissing their initiative, the applicants had had no prospects of success with their individual complaints.

281. The applicants also complained about their exclusion from the denationalisation proceedings, which concerned the ownership of the dwellings they had been living in. The outcome of these proceedings had been decisive for their “civil rights”, as they would have been entitled to purchase the dwellings if they had not been returned to the persons who claimed to have been their owners before the nationalisation.

282. In the denationalisation proceedings, the administrative courts had to verify the existence of the legal grounds allowing restitution, and in the absence of these grounds the claimant’s request should be rejected. These proceedings were decisive not only for the civil rights of the denationalisation claimant but also for those of the former specially protected tenancy holder residing in the dwelling. Under the “third model”, the outcome of the denationalisation proceedings would determine whether the tenant could exercise the right to purchase the existing or a substitute dwelling. After the abolition of that model, their outcome would determine whether the tenant had a right to purchase at all.

283. This right to acquire ownership of a dwelling on extremely favourable financial terms was without doubt a “civil” right within the meaning of Article 6 § 1 of the Convention. The fact that an economic interest lay behind this right could not change that conclusion, as every property right was, in essence, an economic interest. Former holders of specially protected tenancy therefore had a right to participate in the denationalisation proceedings in order to be apprised of, and comment on, all evidence adduced or observations filed, with a view to influencing the court’s decision. The applicants were not required to indicate, in the international proceedings, what kind of arguments and proof they could have put forward in the denationalisation proceedings had they been given a chance to take part in them.

(b) The Government

284. The Government first maintained that the applicants’ complaint was incompatible ratione materiae with the provisions of Article 6 § 1 of the Convention, as the denationalisation proceedings did not involve a dispute concerning their “civil rights and obligations” (Ulyanov v. Ukraine (dec.), no. 16472/04, 5 October 2010). They emphasised that former holders of occupancy rights could not be parties in the denationalisation proceedings unless they proved that they had a legal interest in them, that is, either a claim for the repayment of investments or an ownership right (see Article 60 of the ZDen and paragraphs 23-24 above). The applicants had failed to prove the probable existence of such a legal interest. The restitution of nationalised property to denationalisation claimants did not in any way affect the legal status of the applicants or their direct entitlements based on the law.

285. Moreover, the applicants could not have prevented the restitution of the dwellings to their “previous owners”, as the mere existence of a tenancy could not be an obstacle to restitution of nationalised property. Therefore, the applicants could not have realised their wish to purchase the dwellings by participating in the denationalisation proceedings, which were not directly decisive for their “civil rights”.

2. The Court’s assessment

286. The Court considers that the question of the applicability of Article 6 of the Convention to the denationalisation proceedings is linked to the substance of the applicants’ complaint. It therefore decides to join it to the merits.

287. The Court considers, in the light of the parties’ submissions, that the complaint raises serious issues of fact and law under the Convention, the determination of which requires an examination of the merits. The Court concludes therefore that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. No other ground for declaring it inadmissible has been established. It must therefore be declared admissible.

F. Complaint under Article 13 of the Convention

288. The applicants complained that they did not have at their disposal any effective legal remedies to challenge the alleged violation of their substantive Convention rights.

They relied on Article 13 of the Convention, which reads as follows:

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

289. The Government challenged this claim. They noted that with regard to all the alleged violations the applicants had had an effective national legal remedy at their disposal (the constitutional initiative review), which they had exhausted. Moreover, they could have availed themselves of civil remedies adapted to their individual circumstances.

290. The Court considers, in the light of the parties’ submissions, that the complaint raises serious issues of fact and law under the Convention, the determination of which requires an examination of the merits. The Court concludes therefore that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. No other ground for declaring it inadmissible has been established. It must therefore be declared admissible.

For these reasons, the Court by a majority

Declares the application admissible, without prejudging the merits of the case.

Claudia WesterdiekMark Villiger
RegistrarPresident

ANNEX 1

TABLE RESUMING THE SITUATION OF THE INDIVIDUAL APPLICANTS

No.

Applicant

Acquisition of specially protected tenancy right (how & when)

Past investments by applicants in dwellings/request for reimbursement

Conclusion of
lease contract with Municipality

Date of final decision on restitution

of dwelling; further owners of dwelling if any

Possibility to purchase another dwelling under privileged conditions

Eviction

Size and state of
the dwelling

Location of the dwelling

Monthly

rent

(1992-2008)

1.

Cornelia BERGER-KRALL

Specially protected tenancy attributed in court proceedings

(11/12/1984,

by decision of Ljubljana Basic Court)

Thorough renovation in the past.

On 30/12/1998 the applicant lodged a request for reimbursement of investments.

30/03/1992

29/05/2006

(On 30/12/1998 the applicant lodged a request to intervene in denationalisation proceedings.)

In 1991 the applicant lodged a request to purchase the flat with the municipality;– the latter replied in May 1992 that it was not possible since the denationalisation proceedings were pending.

3-room flat,

103.08 m2

(applicant’s estimations

of value in 2008:

250,000€)

Strict city centre of the capital

(Ljubljana)

9,4 € (revaluated amount 86,09 €)

in 1991,

170,31 € in 2008

2.

Ljudmila BERGLEZ

Inherited

specially protected tenancy right;

06/03/1991

06/03/1991

16/04/1993,

heirs to the initial owner

From 1994 to 1999. The applicant never lodged such a request.

In 2000 the flat was vacated by the “previous owner” for the purposes of renovation;

on 02/10/2007 the Maribor Higher Court granted the applicant’s

request to return to the flat but the judgment has not been executed.

106 m2,

3-room flat,

In the process of

renovation

City centre of the second biggest city

(Maribor)

No data.

3.

Ivanka BERTONCELJ

Original holder of the specially protected tenancy right;

14/12/1979

Complete renovation;

in 1999; the applicant lodged a request for reimbursement of her costs; no data on the state of these proceedings

20/03/1992

16/07/1997;

The dwelling was subsequently sold to another owner. The applicant refused to exercise her pre-emptive right.

From 1994 until 1999.

The applicant never lodged such a request.

However, the “previous owner” offered the applicant another dwelling of a comparable size, standard and location, which the applicant refused.

Both owners initiated domestic proceedings against the applicant for eviction from the dwelling. The courts always ruled in the applicant’s favour. The applicant later moved out of her own accord.

109 m2;

3-room flat;

Strict city centre of the capital

(Ljubljana)

51,55 € in 1992 (the amount nearly illegible),

no data for the subsequent years.

4.

Slavica JERANČIČ

The applicant’s parents in law were original holders of the specially protected tenancy right.

The family lived in the flat from 1946.

The applicant

became the holder of

the specially protected tenancy at a certain point.

Thorough renovation in the past.

25/03/1992

Returned to the “previous owners”, and then sold in 2000 to the Real estate agency, “ABA”.

The applicant alleges that the agency was putting pressure on her. She was requested, inter alia, to pay the difference between the non-profit and the profit rent.

/

Owing to the pressure and difficult financial situation, the applicant, who is retired, moved out of the apartment in or after 2005.

No court proceedings were initiated.

4-room flat,

106.25 m2

Strict city centre of the capital

(Ljubljana)

87,9 € in April 2003,

87,7 € in December 2004

5.

Ema KUGLER

Original holder of the specially protected tenancy right;

17/10/1986

Complete renovation

23/03/1992

18/04/1994;

the “previous owners” sold the flat to a new owner who sold it in turn to a third person

From 1994 until 1999.

The applicant never lodged such a request.

The third owner twice initiated domestic proceedings for eviction from the dwelling. The courts always ruled in the applicant’s favour (the Ljubljana Higher Court, 06/06/2007).

1-room flat;

50 m2;

well maintained

(applicant’s

estimation of

value in 2008:

12,652€)

Strict city centre of the capital

(Ljubljana)

11,6 € in 1992,

49,34 € in 2008.

6.

Dr. Primož KURET

The applicant lived in the flat with his father, the original holder of the specially protected tenancy right. In 1995 his father died and the applicant claimed to have inherited the right. In 2005 the Supreme Court established that it was no longer possible for immediate family members to inherit such lease contracts and ordered that he vacate the flat.

Certain investments; it appears from the file that the applicant never claimed reimbursement of these costs

13/03/1992, concluded between the municipality and the applicant’s father

11/07/1995

(The applicant contested the legal successor’s capacity to inherit the house).

In 1994, the applicant lodged a request with the municipality to purchase the flat. However, since denationalisation proceedings were pending, the municipality informed the applicant that the purchase of the flat would have to be agreed upon with the “previous owner”.

In 2005 the applicant was ordered by domestic courts to vacate the flat.

While the proceedings were pending before the Constitutional Court, the applicant and the “previous owner” reached

a full and final settlement of all existing claims. They also agreed that no further claims would be made.

On 06/07/2006 the applicant’s constitutional complaint was rejected for lack of legal interest since the settlement had been reached.

83 m2;

3-room flat;

no particular data

on state of flat

City centre of the capital

(Ljubljana)

72 € in 1991

(revaluated amount)

Before the applicant moved out in July 2006, he paid for the last 3 months the rent according to the free market value, which was 1.150 €

(revaluated amount)

7.

Drago LOGAR

Original holder of the specially protected tenancy right, 03/09/1976;

original flat exchanged in 1986 for a larger flat.

Thorough renovation

in the past

10/9/1993

26/4/1994

From 1994 to 1999,

the applicant never lodged such a request although he would have liked to.

In 2006 the “previous owner” requested the applicant to vacate the flat.

As far as the Court is aware, no court proceedings were initiated.

4-room flat,

142.58 m2

(applicant’s

estimation of

value in 2008:

71,995€)

Strict city centre of the capital

(Ljubljana)

63,51€ in 1992,

280,78 in 2008.

8.

Dunja MARGUČ

Applicant’s parents were original holders of the specially protected tenancy right;

applicant

became holder on 07/01/1971

Thorough renovation

in the past

09/08/1996

/

The applicant initiated proceedings to purchase the flat but the “previous owner” requested the market value, therefore no agreement was reached.

The last legal successor of the “previous owner” requested the applicant to vacate the flat, as they had a substitute dwelling (a small house on the coast); the court proceedings initiated in 2008 are pending.

3-room flat,

107.29 m2

(applicant’s

estimation of

value in 2008:

39,706 €)

Strict city centre of the capital

(Ljubljana)

35,03€ in 1992,

154,85€ in 2008;

9.

Dusan MILIČ

Original holder of the specially protected tenancy right;

original flat

attributed to him was

exchanged on 20/04/1988 for a flat of a better quality.

Financial contribution amounting to

20% of the value of the flat paid in 1988.

/

Flat returned in 1991 to “previous owners” in the framework of criminal proceedings (since the building had been taken away by a criminal sentence in 1948).

The “previous owners” refused to conclude a lease contract with the applicants; the latter initiated court proceedings in 1996. In 2005 the second-instance court decided, inter alia, that the “previous owners” were bound to conclude the lease contract and that the municipality should refund the applicant the financial contribution paid in 1988.

The applicant stated that as a result of the increase in the rent and the pressure exerted by the “previous owners”, he moved out in 2007 since he could no longer afford to pay the rent and the expenses with his pension.

3-room flat,

77.2 m2

(applicant’s

estimation of

value in 2008:

150-170,000€)

Strict city centre of the capital

(Ljubljana)

54,81€ in 1992,

242,31€ in 2007

10.

Dolores ZALAR

Original holder of the

specially

protected tenancy right;

29/09/1988

Renovation in the past

1/4/1992,

annex 19/10/1992

03/12/1998,

seven heirs to the initial owners

The municipality first agreed to sell the flat to the applicant if no denationalisation proceedings were initiated.

No threatened unjustified eviction

114.68 m2,

4-room flat,

renovation needed

(applicant’s

estimation of

value in 2008:

45,021€)

Strict city centre of the capital

(Ljubljana)

40 € in 1992, 175 € in 2008

Annex 2

List of Applicants

No.

Surname

Name

Date of birth

1

Berger Krall

Cornelia

14/06/1959

2

Berglez

Ljudmila

23/06/1947

3

Bertoncelj

Ivanka

30/11/1922

4

Jerančič

Slavica

09/04/1931

5

Kugler

Ema

09/03/1955

6

Kuret

Primož

06/07/1935

7

Logar

Drago

02/05/1947

8

Marguč

Dunja

25/06/1944

9

Milič

Dušan

15/04/1941

10

Zalar

Dolores

10/09/1954

 

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