THIRD SECTION
 
 
 
 
CASE OF KRAHULEC v. SLOVAKIA
 
(Application no. 19294/07)
 
 
 
 
 
 
 
 
JUDGMENT
 
 
 
STRASBOURG
 
5 July 2016
 
 
 
FINAL
 
05/10/2016
 
This judgment has become final under Article 44 § 2 of the Convention. It may be subject to editorial revision. In the case of Krahulec v. Slovakia,
The European Court of Human Rights (Third Section), sitting as a Chamber composed of:
 Luis López Guerra, President,
 Helena Jäderblom,
 Johannes Silvis,
 Branko Lubarda,
 Pere Pastor Vilanova,
 Alena Poláčková,
 Georgios A. Serghides, judges,
and Stephen Phillips, Section Registrar,
Having deliberated in private on 14 June 2016,
Delivers the following judgment, which was adopted on that date:
PROCEDURE
1. The case originated in an application (no. 19294/07) against the Slovak Republic lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Slovak national, Mr Štefan Krahulec (“the applicant”), on 30 April 2007. 2. The applicant was represented by Mr R. Procházka, a lawyer practising in Bratislava. The Government of the Slovak Republic (“the Government”) were represented by their Agent, Ms M. Pirošíková. 3. The applicant alleged that the rent-control scheme had imposed restrictions on his right to peaceful enjoyment of his possessions, in breach of Article 1 of Protocol No. 1 to the Convention. 4. By a decision of 7 June 2011, the Court declared the application partly admissible. 5. The applicant and the Government each filed further written observations (Rule 59 § 1) on the merits and just satisfaction and replied in writing to each other’s observations. THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
6. The applicant was born in 1945 and lives in Zvolen. A. The applicant’s property and title
7. In 1929 the applicant’s grandfather built a house in Piešťany. His predecessors retained ownership under the communist regime. Ownership was transferred to the applicant from his mother on 21 December 1998. 8. The house comprises four flats. Two have a surface area of 108 sq. m each in size, while the other two measure 123 sq. m each. B. Rent control of the applicant’s property
9. At the time the application was lodged, the flats were inhabited by tenants with a regulated rent. Their or their predecessors’ right to use the flats had been established by decisions taken by the municipal authorities between 1953 and 1986. After 1 January 1992 their right of use had been transformed into tenancies with regulated rent for an indefinite period. 10. Under the relevant legislation, the applicant had to accept that his flats were occupied by those tenants and that he could charge them no more than the maximum amount of rent fixed by the State (“the rent-control scheme”). The applicant had no possibility of unilaterally terminating the leases on his flats. 11. Under the applicable legislation, the maximum monthly rent chargeable for the flats in 1999 was the equivalent of some 13 to 33 euros (EUR). After several increases in the regulated rent, in 2004 the applicant was able to charge EUR 115 monthly in respect of each of the smaller flats and EUR 124 monthly in respect of the larger ones. 12. The applicant contended that he, in fact, received from the tenants less than the maximum amount of rent set by the applicable legislation. To this end he led several property disputes with them and the local municipality. 13. The parties provided differing figures as to the market rent. The applicant relied on data from the National Association of Real Estate Agencies (“the NAREA”) and claimed that the monthly market rent for similar flats reached EUR 600 to 800 between 2004 and 2007. The Government submitted an expert valuation according to which the monthly market rent for the applicant’s flats in 2010 amounted to EUR 265.50 and EUR 325 respectively. 14. In submissions made on 16 June 2014 the applicant informed the Court that the rent control in respect of his four flats had been terminated. The first flat had been subject to rent control until May 2007, the second and third flats until August 2007, and the fourth flat until April 2008. II. RELEVANT DOMESTIC LAW AND PRACTICE
15. The relevant domestic law and practice governing the rent-control scheme in Slovakia and its historical background are set out in the case of Bittó and Others v. Slovakia ((merits), no. 30255/09, §§ 7‑16, 32‑72, 28 January 2014). III. IMPLEMENTATION OF THE COURT’S JUDGMENT IN THE CASE OF BITTÓ AND OTHERS
16. In Bittó and Others ((merits), cited above), the Court found that the application of the rent-control scheme in respect of the applicants’ property constituted a violation of Article 1 of Protocol No. 1 to the Convention. In the relevant part of its judgment under Article 46 of the Convention it held that:
“133. [Its] conclusion ... as regards the effects of the rent-control scheme on the applicants’ right to peaceful enjoyment of their possessions, suggests that the violation found originated in a problem arising out of the state of the Slovakian legislation and practice, which has affected a number of flat owners to whom the rent-control scheme has applied .... The Court further notes that 13 other applications concerning the same issue are pending before it which concern some 170 persons. 134. It is true that measures have been taken with a view to gradually improving the situation of landlords. Thus, as a result of the introduction of Law no. 216/2011, the controlled rent could be increased by 20% every year as from the end of 2011. Where a municipality has not provided tenants exposed to material hardship with a dwelling by the end of 2016, the landlords will have the right to claim the difference between the free-market rent and the controlled rent ... Thus those measures provide for a complete elimination of the effects on flat owners of rent-control only as from 2017, and they do not address the situation existing prior to their adoption. 135. The Court considers that further measures should be taken in order to achieve compliance with Article 1 of Protocol No. 1. To prevent future findings of infringement of that provision, the respondent State should introduce, as soon as possible, a specific and clearly regulated compensatory remedy in order to provide genuine effective relief for the breach found.”
17. Implementation of the judgment in Bittó and Others is still pending. THE LAW
I. Scope of the application
18. The Court notes that the present application is concerned with rent control in relation to the applicant’s property from the date the applicant acquired title, 21 December 1998, until the rent-control scheme ceased to apply in respect of it, in May and August 2007 and April 2008 (see paragraphs 7 and 14 above). 19. It is thus concerned with rent control over the applicant’s property of eight years in respect of the first flat, almost nine years in respect of the second and third flats and over nine years in respect of the fourth flat. 20. In addition, the Court observes that the applicant provided no information concerning his claims for rent for his property which he had been entitled to under the rent-control scheme. It thus finds that the scope of the application is further limited to the difference between the rent that he was entitled to under the rent-control scheme and the rent that he would likely have obtained for his property on the open market. II. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1
21. The applicant complained that his right to peaceful enjoyment of his possessions had been breached as a result of the implementation of the rent‑control scheme which applied to his property. He 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.”
A. The arguments of the parties
1. The applicant
22. The applicant argued that the rent‑control scheme had constituted an interference with his right to peaceful enjoyment of his property. He claimed that the restrictions imposed on the use of his property and their duration could amount to a de facto deprivation of property. He had been forced to satisfy the housing needs of other people at his own expense, and had had no possibility of terminating the leases or receiving adequate compensation for them. 23. In addition, he claimed that the interference had been without statutory basis because the relevant legislation was incoherent and insufficiently foreseeable, that it had not pursued a legitimate aim, and that the rent‑control scheme had constituted a disproportionate burden on his ownership rights. In this connection he argued, inter alia, that the rent he had been entitled to charge for his flats under the rent-control scheme had not even covered the costs of their maintenance. 2. The Government
24. In their submissions in reply, the Government admitted that the rent‑control scheme had resulted in a limitation on the use of the applicant’s property. However, the measure had been in accordance with the relevant domestic law, which met the requirements of accessibility and clarity and was sufficiently foreseeable in effect, and had pursued a legitimate aim. 25. As to the requirement of proportionality, they challenged the figures provided by the applicant in respect of the market rent for his property and provided different figures on the basis of their own expert evidence (see paragraph 13 above). 26. The Government argued that the situation in the present case was different from that in Bittó and Others where the regulated rent had corresponded to 20-26% of the market rent. Relying on the expert evidence mentioned, they contended that in the present case the regulated rent had reached 44-50% of the market rent. 27. They considered that that difference distinguished the present case from Bittó and Others, that the burden created by the rent‑control scheme in relation to the applicant in the present case had been justified by the legitimate aim it had pursued, namely social policy in the field of housing, and had not been disproportionate. In addition, they submitted that the relationship between the regulated rent and the market rent was not the only relevant criterion and that the Court should assess the case on the basis of the relationship between the rent the applicant had been entitled to and the expenses he had actually incurred for the maintenance of his property. However, they pointed out that he had failed to substantiate his claims in that respect. B. The Court’s assessment
28. The relevant case-law of the Court is summarised in Bittó and Others ((merits), cited above, §§ 94-100, with further references). 29. In that case, the Court found (i) that the rent-control scheme had amounted to an interference with the applicants’ property, (ii) that that interference had constituted a means of State control of the use of their property to be examined under the second paragraph of Article 1 of Protocol No. 1, (iii) that it had been “lawful” within the meaning of that Article, (iv) that it had pursued a legitimate social policy aim, and (v) that it had been “in accordance with the general interest” as required by the second paragraph of that Article (ibid., §§ 101-04). The Court has no reason to reach different conclusions on these points in the present case. 30. In addition, in Bittó and Others the Court found that in the implementation of the rent-control scheme the authorities had failed to strike the requisite fair balance between the general interests of the community and the protection of the applicants’ right of property, as a result of which there had been a violation of their rights under Article 1 of Protocol No. 1 (ibid., §§ 105-19). 31. Turning to the facts of the present case, the Court observes that it follows the pattern of Bittó and Others entirely, both structurally and contextually. Nevertheless, the Government sought to distinguish it from that case, arguing that the restrictions placed on the applicant’s property rights in the present case had been smaller than those in Bittó and Others. 32. In particular, the Government argued that in Bittó and Others the regulated rent had corresponded to 20-26% of the market rent, whereas in the present case it had corresponded to 44-50% of the market rent. In addition, they objected that the applicant failed to substantiate his claims in respect of the expenses actually incurred for the maintenance of his property.
33.

Article of the Convention at issue: Article 1
Outcome: violation