Information Note on the Court’s case-law No. 175
June 2014
Berger-Krall and Others v. Slovenia - 14717/04
Judgment 12.6.2014 [Section V]
Article 1 of Protocol No. 1
Article 1 para. 1 of Protocol No. 1
Peaceful enjoyment of possessions
Housing reforms resulting in higher rent and reduced security of tenure for tenants following move to market economy: no violation
Article 8
Positive obligations
Article 8-1
Respect for home
Housing reforms resulting in higher rent and reduced security of tenure for tenants following move to market economy: no violation
Facts – Under the socialist system previously in force in former Yugoslavia, tenants who, like the applicants, were residing in socially-owned flats held “specially protected tenancy” agreements, which in most cases had been concluded for an indefinite period and could be passed on from generation to generation. A “specially protected tenancy” enjoyed stronger protection than a purely contractual tenancy.
When Slovenia became independent and opted for a market economy, two main reforms were adopted in the housing sector. The Denationalisation Act 1991 permitted previous owners (or their heirs) to claim restitution of properties that had been expropriated by the State, including dwellings which had been let under the “specially protected tenancy” scheme. In parallel, the Housing Act 1991 regulated the rights of the new owners and of the tenants. It replaced the “specially protected tenancy” with a normal leasing arrangement. All previous holders of “specially protected tenancies” were in principle given the possibility of renting the flats from the new owners for an indefinite period, but on less favourable terms, in particular, as regards rent, rights of transmission to family members and security of tenure.
In their application to the European Court, the applicants complained, inter alia, that they had been deprived of their specially protected tenancy rights without adequate compensation (Article 1 of Protocol No. 1 and Article 8 of the Convention).
Law – Article 1 of Protocol No. 1: It was unnecessary to examine whether the right of an occupant to reside in a real estate unit could constitute a “possession” within the meaning of Article 1 of Protocol No. 1 as, even assuming that provision to be applicable, there had been no violation of its requirements.
The interference with the applicants’ right to the peaceful enjoyment of their possessions was lawful and in accordance with the general interest. It had also struck a fair balance between the demands of the general interest of the community and the requirements of the protection of the individuals’ fundamental rights.
It was true that as a result of the housing reform, the applicants had had to face a general degradation of the legal protection they had previously enjoyed (for example, increased rent, restrictions on the right to transmit the tenancy to family members and reduced security of tenure). These were, however, unavoidable consequences of the legislature’s decision to provide former owners with the possibility of restitution in natura of dwellings which had been nationalised after the Second World War. Securing the rights of previous owners could not but result in a corresponding restriction of the rights of the occupiers. In any event, certain obligations assumed by the applicants under the new leases (not to cause damage, disturb other residents, perform prohibited activities or sublet) were in substance similar to those found in normal landlord and tenant relations.
In addition, the applicants enjoyed and continued to enjoy special protection going beyond that usually afforded tenants: the lease contracts were concluded for an indefinite period and transmissible to the spouse or long term partner of the tenant and the non-profit rent imposed on the applicants continued to be significantly lower than the free market rent more than 22 years after the housing reform was introduced, which showed that the transition to a market economy had been conducted in a reasonable and progressive manner. Moreover, none of the applicants had shown that the level of rent was excessive in relation to his or her income.
Thus, in balancing the exceptionally difficult and socially sensitive issues involved in reconciling the conflicting interests of “previous owners” and tenants, the respondent State had ensured a distribution of the social and financial burden involved in the housing reform which had not exceeded its margin of appreciation.
Conclusion: no violation (six votes to one).
(See also: Hutten-Czapska v. Poland [GC], 35014/97, 19 June 2006, Information Note 87; Lindheim and Others v. Norway, 13221/08 and 2139/10, 12 June 2012, Information Note 153)
Article 8: The considerations which led the Court to find that the applicants’ rights under Article 1 of Protocol No. 1 had not been violated allowed it to reach the same conclusion under Article 8 of the Convention in respect of those applicants whose complaints under that provision were declared admissible. They had been afforded the possibility of indefinite term leases, transmitting them to their spouses or long term partners and occupying the premises for a non-profit rent. None of the applicants had submitted evidence showing that they could not afford the rent and, in any event, public subsidies were available for socially or financially disadvantaged tenants.
As to the fault-based grounds for eviction that had been introduced by the Housing Act 1991, they were essentially similar to those traditionally contained in lease agreements in other Council of Europe member States and could not, as such, be considered incompatible with Article 8 of the Convention. The two additional rights afforded previous owners under the Housing Act 2003 – to move a tenant to another suitable property and to evict a tenant who owned another suitable dwelling – were justified in view of the special, reinforced protection afforded to persons in the applicants’ situation and the corresponding limitations placed on the rights of the previous owners, who were forced into a lifelong low rental agreement with tenants they had not chosen.
As to the procedural guarantees enjoyed by the applicants, it was not contested that they had the possibility of challenging any eviction order before the competent domestic courts, which had jurisdiction over all related questions of fact and law. The interference with the right to respect for their home of the three applicants concerned had thus been necessary in a democratic society.
Conclusion: no violation (unanimously).
The Court also found, unanimously, that there had been no violation of Article 14 of the Convention taken together with Article 1 of Protocol No. 1, or of Article 6 § 1 of the Convention (either in respect of the denationalisation proceedings or in respect of the applicants’ allegedly insufficient access to a court to challenge the housing reform).
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This summary by the Registry does not bind the Court.
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