The owners of a commercial property in Żabbar were awarded €40,000 in compensation after the European Court of Human Rights ruled that Maltese law had prevented them from increasing the rent in line with market values.
The case was instituted in 2011 by Carmel Zammit, 72, of Żabbar and Doris Attard Cassar, 58, of Birkirkara, who had inherited a commercial property from their uncle 11 years earlier. Situated in Salvu Pulis Street, Żabbar, the property had been leased to a company since the 1970s and is nowadays known as the Cressi Sub-Store.
On the basis of a valuation exercise carried out after they took possession of this property, the applicants claimed that during the first decade the annual rent should have been raised from €862 to €7,000.
In May 2004 the company applied to the Rent Regulation Board – the entity which by law can sanction such increases – seeking to dismiss the claim filed by the applicants for a rent increase.
Meanwhile, from the second term of 2002 the applicants stopped accepting rent, for fear it would prejudice their claim.
As a result, the company continued to pay the rent by means of a schedule of deposit filed with the domestic courts.
In its decision in January 2008, the board dismissed the applicants’ request and said the rent should not be increased, on the basis of a recommendation made by two court-appointed architects.
It also held that it had no jurisdiction to decide on the applicants’ claim of a breach of the property rights under the European Convention on Human Rights. On appeal, the matter was referred to the Constitutional Court, which in 2010 upheld the applicants’ claim, saying they had not had an effective remedy, insofar as they had been constrained by the capping of the rent level established by law.
However, on further appeal, the Constitutional Court reversed the first-instance judgment. It found that the original owner had been fully aware of the legal consequences when leasing the property. Consequently, he (the applicant’s uncle) and his successors could not complain of such a breach, the court said.
In December 2011 the applicants took the case to the European Court of Human Rights in Strasbourg.
They claimed that the existing rent law restrictions had imposed on them an “excessive individual burden”, particularly in view of the fact that their property had been leased to a commercial enterprise. In a decision delivered yesterday, the ECHR unanimously ruled the applicants’ claim to be admissible.
The applicants had claimed €99,000 plus interest for the period between 2002 and 2014.
The government submitted that this claim was exorbitant and argued that such value could not be derived on a calculation made by the applicants themselves. Ultimately, the ECHR awarded the applicants €40,000 in respect of pecuniary damages and a further €10,000 to cover legal costs and expenses incurred by them.
It also noted that the sums deposited in court by the tenants between 2002 and 2013 remained retrievable by the applicants and were therefore deducted from the compensation.
Article 1 of the Protocol to the Convention for the Protection of Human Rights and Fundamental Freedoms – Protection of property
“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.”