Extraits de la décision (disponible seulement en anglais):
I. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1 TO THE CONVENTION
31. The applicants complained that the forced landlord-tenant relationship coupled with the low amount of rent received by them had made them suffer an excessive individual burden. The breach had been even more blatant given that the advantages provided by law had been in favour of a third party who had not been in need of social housing, and thus the interference had not pursued any legitimate aim as provided in 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.”
32. The Court notes that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. It further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible.
1. The parties’ submissions
(a) The applicants
33. To establish the interference, the applicants relied on R & L, s.r.o. and Others v. the Czech Republic (nos. 37926/05 and 4 others, 3 July 2014) and noted that in 2013 the domestic courts had acknowledged that the Law in question had been in breach of the applicants’ property rights. The applicants further relied on the Court’s case-law (Anthony Aquilina v. Malta, no. 3851/12, 11 December 2014; Zammit and Attard Cassar v. Malta, no. 1046/12, 30 July 2015; and Amato Gauci v. Malta, no. 47045/06, 15 September 2009) concerning the lack of proportionality at issue.
34. The applicants submitted that the circumstances in which they had acquired the property were immaterial. They had bought the property so that they would have had a house to live in when they would have returned to Malta but they had not been able to do so. Moreover, when they had purchased the property they had known that J.G. and his wife had been of advanced age and that none of their children, who had already been well settled in life, had been living with them. Thus, there had been no real prospect of any of those children claiming rights over the property. The applicants specified that they themselves, like the current tenant, were advanced in age. In particular the first applicant was seventy years old, a pensioner, and he had never been able to use his property despite being the owner.
35. The applicants submitted that the property had not been assigned to J.G. because he had required social accommodation but only because of an automatic conversion of an emphyteusis into a controlled and protected lease by operation of law. In the opinion of the applicants, the fact that the law had not provided a mechanism for distinguishing between those in social need and others, had been one of the reasons why the law had failed to address the proportionality issue. As a result, J.G. and later his daughter P.G. had benefited and were still benefiting from a controlled-rent regime irrespective of their means.
36. In this connection the applicants submitted that P.G. had been sufficiently stable financially to afford renting at market values without requiring any form of social assistance. In particular, evidence showed that, apart from her income, P.G. had owned an apartment in London which she had sold for EUR 433,100; she had inherited property in Malta (to the value of tens of thousands of euros – as shown by documents submitted to the Court) and she had sold some of that property for profit. Moreover, P.G. was receiving a pension of EUR 1,200 per month, a sum way above the minimum wage in Malta. Thus, assuming that that money (earned from the transfers) had been invested at a rate of 4%, in addition to her declared annual income of EUR 14,400 (from the pension), P.G. was in receipt of an annual income of around EUR 31,000. Indeed, even her monthly pension of EUR 1,200 was much higher than the minimum wage (EUR 720.46 per month) and it was incomprehensible that a single woman of pensionable age would need a fourteen-room house. The applicants further noted that it had transpired in the course of the domestic proceedings that P.G. had been unwilling to vacate the applicants’ property because she had not had a place to house all her furniture, and this fact further showed that her accommodation therein had lacked any social purpose.
37. They noted that the Government’s claim that the applicants had acquired the property at below market value had not been substantiated. In any case, nearly thirty years after the acquisition of the property, they were still suffering the consequences of the rent regime and they were still not able to receive adequate rent for their property. They submitted that the rent to which they were legally entitled was clearly disproportionate compared to the value of the property. According to an estate agent’s valuation the property would fetch a rental income of EUR 3,500 per month on the open market, while the applicants were receiving EUR 39 monthly. In reply to the Government, as regards the increase in rent every fifteen years, the applicants specified that there had only been one increase in rent so far but that increase had not been adequate. A rent of EUR 466 per annum was low for any house located anywhere in Malta and specifically their property, which had an annual rental market value of EUR 42,000. According to the applicants the rent established in 1987 had been too low even then, let alone thirty years later.
(b) The Government
38. The Government noted that the rent paid by J.G. – EUR 233 (MTL 100) per annum – in 1962 had been considered to be a substantial sum of money. They submitted that, following the conversion of the sub‑emphyteusis into a lease by operation of law in 1988 the applicants had bought the property at a considerably reduced value (in the light of the fact that the property had been occupied). Thus, the applicants were aware, prior to the purchase of the property – for the modest sum of EUR 25,600 (reflecting its limitations) – that it had been leased to J.G. and in fact they had accepted rental payments from J.G. until his death on 7 May 2008. The rent had also been raised (every fifteen years) in accordance with the rate of inflation as established in the law. Therefore, the Government considered that the applicants, who had made a business decision assuming the risks associated with it, had been well aware of the consequences of the legal regime applicable to their property and they could not argue that they had been subject to a forced lease or that the interference had been arbitrary or unforeseeable.
39. In any event the Government submitted that the restriction had had its legal basis in Chapter 158 of the Laws of Malta and had thus been lawful and that the interference had pursued a legitimate aim, specifically the social protection of tenants and the prevention of homelessness.
40. As to the proportionality of the measure, the Government considered that the amount of rent paid by the tenant (EUR 466 per annum) was not an extraordinarily low rent. In 1987 when the sub-emphyteusis had been converted to a lease such an amount had been a considerable rent, based on the increase of the inflation (capped at 100%) and it reflected the rental market value of the property at such time. In the opinion of the Government, the amount claimed as rental market value by the applicants (circa EUR 3,500 per month) was exorbitant in particular if it was interpreted against the background of the national minimum wage in 2015 (EUR 720.46 per month) in the light of the fact that the rent-control regulation system is aimed at protecting individuals within the lower income strata. Moreover, the applicants had not shown that there had been any tenant willing to pay the excessive amount that they had claimed.
41. The Government submitted that the income of the tenant (a seventy‑year-old unmarried pensioner) was GBP 900 per month (circa EUR 1,200). Therefore, subtracting the rent (around EUR 39 per month) from the pensionable income, the amount left was EUR 1,160, a sum from which all expenses including medical expenses associated with old age and maintenance costs of the property, had to be paid. Thus, in the opinion of the Government the authorities had struck a fair balance between the various rights and interests involved in the case at hand. Furthermore, the applicants had had procedural safeguards at their disposal to protect their interests.
42. The Government argued that the present case was considerably different from the case Amato Gauci (cited above) since in that case the owner of the property had been forced into a unilateral lease, while in the present case the applicants had acquired a property which had already been subject to an existing lease of which they had had full knowledge. Thus, unlike in the present case, in that case it had been unforeseeable that an emphyteutical concession would have been converted into a lease. As to the case of Zammit and Attard Cassar (cited above) the Government pointed out that that case had referred to property which had involved a private interest of a commercial nature, while in this case the property concerned was purely intended for residential purposes.
2. The Court’s assessment
43. The Court reiterates that in order for an interference to be compatible with Article 1 of Protocol No. 1 it must be lawful, be in the general interest and be proportionate, that is to say it must strike a “fair balance” between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights (see, among many other authorities, Beyeler v. Italy [GC], no. 33202/96, § 107, ECHR 2000‑I, and J.A. Pye (Oxford) Ltd and J.A. Pye (Oxford) Land Ltd v. the United Kingdom [GC], no. 44302/02, § 75, ECHR 2007‑III). The Court will examine these requirements in turn.
(a) Whether there was an interference
44. In connection with the development of property, the Court has previously found that having been aware of the fact that their property had been encumbered with restrictions when they had bought it (for example, its designation in a local development plan), the applicants could not hold that circumstance against the authorities (see Lacz v. Poland, (dec.) no. 22665/02, 23 June, 2009; and the case-law cited therein), specially when a complaint has not been made that they had a legitimate reason to believe that the restrictions encumbering their property would be removed after they bought the property. However, the Court has not excluded that there might be particular cases where an applicant who bought a property in full knowledge that it was encumbered with restrictions may subsequently complain of an interference with his or her property rights, for example, where the said restrictions are alleged to be unlawful (ibid.).
45. More specifically in the context of restrictions on lease agreements (in particular the prohibition on bringing a tenant’s lease to an end), the Court has found that there was an interference as a result of the domestic courts’ refusals of the applicants’ demands, despite the applicants’ knowledge of the applicable restrictions when they had entered into the lease agreement, a matter which however carried decisive weight in the assessment of the proportionality of the measure (see Almeida Ferreira and Melo Ferreira v. Portugal, no. 41696/07, §§ 27 and 34, 21 December 2010).
46. Subsequently, in R & L, s.r.o. and Others (cited above) the Court specifically examined whether Article 1 of Protocol No. 1 protected applicants who had purchased property in the knowledge that rent restrictions imposed on the property might contravene the Convention. In that case, when the applicants had acquired their respective properties their rents had been set in accordance with the rent regulations applicable at the time and the applicants could not have increased the rents above the threshold set by the State. Nor were they free to terminate the rent agreements and conclude new ones with different – higher – levels of rent. The Court did not find it decisive that one of the applicants had purchased the property before the domestic courts had taken issue with the legislation in place which had given a legitimate expectation that the status of such properties would be addressed by the national legislator in due course. The Court held that it could not be said that the applicants as landlords had implicitly waived their right to set the level of rents, as, for the Court, waiving a right necessarily presupposed that it would have been possible to exercise it. There was no waiver of a right in a situation where the person concerned had never had the option of exercising that right and thus could not waive it. It followed that the rent-control regulations had constituted an interference with the landlords’ right to use their property (ibid., § 106).
47. In the more recent Zammit and Attard Cassar (cited above, § 50) case, in a situation where the applicants’ predecessor in title had knowingly entered into a rent agreement in 1971 with relevant restrictions (specifically the inability to increase rent or to terminate the lease), the Court held that, at the time, the applicants’ predecessor in title could not reasonably have had a clear idea of the extent of inflation in property prices in the decades to follow. Moreover, the Court observed that when the applicants had inherited the property in question they had been unable to do anything more than attempt to use the available remedies, which had been to no avail in their circumstances. The decisions of the domestic courts regarding their request had thus constituted interference in their respect. Furthermore, as in R & L, s.r.o. and Others, in Zammit and Attard Cassar (both cited above) the applicants, who had inherited a property that had already been subject to a lease, had not had the possibility to set the rent themselves (or to freely terminate the agreement). It followed that they could not be said to have waived any rights in that respect. Accordingly, the Court found that the rent‑control regulations and their application in that case had constituted an interference with the applicants’ right (as landlords) to use their property (Zammit and Attard Cassar, cited above, § 51).
48. Turning to the present case, the Court also notes that the applicants had bought their property before the European Court of Human Rights took issue with the Maltese legislation applicable in cases such as Amato Gauci (cited above). That judgment was eventually followed in most cases in domestic case-law. However, again the Court finds this not to be decisive given the passage of time between the purchase of the property and now. In this connection the Court reiterates that what might be justified at a specific time might not be justified decades later (see Amato Gauci, cited above, § 60). In the present case, while it is true that the applicants knowingly entered into the rent agreement in 1988 with the relevant restrictions (specifically the inability to increase the rent or to terminate the lease), the Court considers that the applicants could not reasonably have foreseen the extent of inflation in property prices in the decades that followed (see Zammit and Attard Cassar, cited above, § 50). Once the discrepancy in the rent applied and that on the market became evident, they were unable to do anything more than attempt to use the available remedies, which they did in 2010, but which were to no avail in their circumstances. The decisions of the domestic courts regarding their application thus constituted interference in their respect. Furthermore, the applicants, who bought a property that was already subject to a restricted lease, did not have the possibility to set the rent themselves or to freely terminate the agreement. Clearly, they could not be said to have waived any rights in that connection (see Zammit and Attard Cassar, cited above, § 50).
49. Accordingly, the Court finds that the rent-control regulations and their application in the present case constituted an interference with the applicants’ right (as landlords) to use their property (see Zammit and Attard Cassar, cited above, § 51). Nevertheless, in circumstances such as those of the present case a number of considerations need to be made in connection with the proportionality of the interference.
50. The Court has previously held that rent-control schemes and restrictions on an applicant’s right to terminate a tenant’s lease constitute control of the use of property within the meaning of the second paragraph of Article 1 of Protocol No. 1. It follows that the case should be examined under the second paragraph of Article 1 of Protocol No. 1 (see Hutten‑Czapska v. Poland [GC], no. 35014/97, §§ 160-61, ECHR 2006‑VIII; Bittó and Others v. Slovakia, no. 30255/09, § 101, 28 January 2014; and R & L, s.r.o. and Others, cited above, § 108).
(b) Whether the Maltese authorities observed the principle of lawfulness and pursued a “legitimate aim in the general interest”
51. The Court refers to its general principles on the matter as set out in Amato Gauci (cited above, § 53-54).
52. That the interference was lawful has not been disputed by the parties. The Court finds that the restriction arising from the 1979 amendments was imposed by Act XXIII of 1979 and was therefore “lawful” within the meaning of Article 1 of Protocol No. 1.
53. In the present case the Court can accept that the applicable legislation in the present case pursued a legitimate social-policy aim, specifically the social protection of tenants (see Amato Gauci, cited above, § 55, and Anthony Aquilina, cited above, § 57). It is, however, also true that the relevance of that general interest may have decreased over time, particularly after 2008 (see Anthony Aquilina, cited above, § 57), even more so given that following that date, the only person benefiting from the impugned measures was P.G., whose financial situation as shown before the domestic courts and which is not being contested before this Court, leaves little doubt as to P.G’s necessity for such a property, and at a regulated rent. This Court will therefore revert to this matter in its assessment as to the proportionality of the impugned measure.
(c) Whether the Maltese authorities struck a fair balance
54. The Court refers to its general principles on the matter as set out in Amato Gauci (cited above, § 56-59).
55. The Court will consider the impact that the application of the 1979 Act had on the applicants’ property. It notes that the applicants could not exercise their right of use in terms of physical possession as the house was occupied by tenants and they could not terminate the lease. Thus, while the applicants remained the owners of the property they were subjected to a forced landlord-tenant relationship for an indefinite period of time.
56. Despite any reference to unidentified procedural safeguards by the Government (see paragraph 41 above) the Court has on various occasions found that applicants in such a situation did not have an effective remedy enabling them to evict the tenants either on the basis of their own needs or those of their relatives, or on the basis that the tenants were not deserving of such protection (see Amato Gauci, cited above, § 60, and Anthony Aquilina, cited above, § 66). Indeed, when their need arose (some years after they had purchased it) and later despite the little need of it by the tenant – who was not in any particular need of housing (at least after 2008) – the applicants were unable to recover the property. Consequently, the application of the law itself lacked adequate procedural safeguards aimed at achieving a balance between the interests of the tenants and those of the owners (see Anthony Aquilina, cited above, § 66, and mutatis mutandis, Zammit and Attard Cassar, cited above, § 61). The Court further considers that the possibility of the tenant leaving the premises voluntarily was remote, especially since the tenancy could be inherited – as in fact happened in the present case. It is clear that these circumstances inevitably left the applicants in uncertainty as to whether they would ever be able to recover their property.
57. As to the rent payable, the Court is ready to accept that EUR 466 annually was a more or less reasonable amount of rent in 1988 ‑ particularly given that it was an amount of rent which the applicants were aware of and in spite of which they decided to purchase the property with the relevant restrictions. Furthermore, it was an amount of rent which the applicants expected to receive for a number of years, at least until the demise of J.G. and his wife. Moreover, the Court accepts that at the relevant time the measure pursued a legitimate social-policy aim (see paragraph 53 above) which may call for payments of rent at less than the full market value (see Amato Gauci, § 77).
58. The same cannot be said after the passage of decades, during which the rent had remained the same (as stated by the parties and the domestic courts, the rent is still EUR 466 annually). The Court has previously held that there had been a rise in the standard of living in Malta over the past decades (see Amato Gauci, cited above, § 63, and Anthony Aquilina, cited above, § 65). Thus, the needs and the general interest which may have existed in 1979 must have decreased over the three decades that ensued (see Anthony Aquilina, cited above, § 65). It is noted that as stated by the Government in paragraph 40 above, the minimum wage in 2015 was EUR 720.46 per month, while in 1974 (the date when Malta adopted a national minimum wage) it amounted to the equivalent of less than EUR 100 per month (see Amato Gauci, cited above, § 60).
59. The Court need not identify the exact year at which the rent payable was no longer reasonable. It observes that cases against Malta concerning the same subject matter, that is to say renewal of leases by operation of law ‑ whose rent had been set on an open market – (see Amato Gauci, Anthony Aquilina, and Zammit and Attard Cassar, all cited above), which have invariably lead to findings of a violation of Article 1 of Protocol No. 1, concerned periods after the year 2000. Furthermore, the Government of the respondent State have often argued that Malta suffered a boom in property prices in 2003 (see, for example, Apap Bologna v. Malta, no. 46931/12, § 97, 30 August 2016). Lastly, although not determinative, it was only in 2008 that the applicants refused to accept the rent, once P.G. had inherited the property. In the light of the above it suffices for the Court to consider that a rent based on the value of the property as it stood in 1962 with the relevant adjustment which amounted to EUR 466 annually in 1988 and thereafter – was certainly not reasonable for the years following 2000.
60. In particular, even if one had to concede that the valuations submitted by the applicants are on the high side, the Court notes that the first-instance domestic court, in 2011, accepted EUR 3,000 per month (that is to say EUR 36,000 per year) as the rental market value of the property (see paragraph 18 above). Thus, the amount of rent received by the applicants, around EUR 39 a month, that is to say EUR 466 per year, for a fourteen-room house in Sliema, a highly sought-after location, is indeed “derisory” as was also found by the first-instance domestic court (see paragraph 18 above). Indeed, that amount of rent contrasts sharply with the market value of the premises in recent years, as accepted by the domestic court or as submitted by the applicant, as it amounted to a little more than 1% of the market value. The Court considers that State control over levels of rent falls into a sphere subject to a wide margin of appreciation by the State and its application may often cause significant reductions in the amount of rent chargeable. Nevertheless, this may not lead to results which are manifestly unreasonable (see Amato Gauci, cited above, § 62).
61. In the present case, having regard to the low rental payments to which the applicants have been entitled in recent years, the applicants’ state of uncertainty as to whether they would ever recover their property, which has already been subject to this regime for nearly three decades, the rise in the standard of living in Malta over the past decades, and the lack of procedural safeguards in the application of the law, which is particularly conspicuous in the present case given the situation of the current tenant as well as the size of the property and the needs of the applicants, the Court finds that a disproportionate and excessive burden was imposed on the applicants. It follows that the Maltese State failed to strike the requisite fair balance between the general interests of the community and the protection of the applicants’ right of property.
62. There has accordingly been a violation of Article 1 of Protocol No. 1 to the Convention."
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