Maltese property owner wins landmark European Court case over imposed lease

The European Court of Human Rights has ordered the Maltese government to pay compensation to a Maltese landlord who filed a complaint after Maltese law was changed, thus allowing his tenant to continue to live in his property even after a temporary emphyteusis expired.

Mr Philip Amato Gauci said his property rights were infringed as a result of the new law, which imposed on him a unilateral lease relationship for an indeterminate time without providing him with a fair and adequate rent.

He explained to the court that he owned a maisonette in Sliema which in 1975 was granted on temporary emphyteusis for 25 years for a ground rent of €210 per year.
But as a result to a change in the law in 1979, once the term of the emphyteusis expired, tenants were granted the right to retain possession of the premises under a lease, without the consent of the owner. The law did not apply for post 1995 emphyteusis.

Mr Amato-Gauci said he had been unilaterally deprived of his property without being able to have recourse to a court for a determination as to whether it was necessary for the tenants to retain the property or to establish just and fair lease conditions.

He also submitted that the tenant also owned other property, whilst he could not make use of his own property for his daughter, who was getting married.
The case was referred to the European Court of Human Rights after Mr Amato Gauci lost cases before the local courts, although the government submitted that not all local remedies had been exhausted.

The Attorney General also contested the assertion that there had been interference with the applicant's property rights. He submitted that the applicant's father (from whom Mr Amato Gauci inherited the property) should have known that at the time of the emphyteusis that the Civil Code and the applicable case-law had already determined that owners had to respect lease contracts entered into even beyond the period of temporary emphyteusis. In fact, the law only limited the already existent protection of tenants to Maltese citizens occupying the premises as their ordinary residence.
Moreover, the applicant had inherited an undivided half-share of the premises from his late father in December 1995 and the rest in 1997. Thus, at the time the applicant had acquired possession, the property was already governed by the new law.
Even assuming that there had been interference with the applicant's property rights, it had consisted of control of the use of property in the general interest, namely that of protecting the interests of tenants, the AG argued.

The European Court, however, found that Mr Amato Gauci had indeed suffered an infringement of his property rights when the new law imposed on him a unilateral lease relationship for an indeterminate time without providing him with a fair and adequate rent.
It therefore ordered the Maltese government to pay him €15,025 as pecuniary damage,€1,500 as non-pecuniary damage, and €3,500 in respect of costs and expenses.
Mr Amato Gauci was represented by Prof. Ian Refalo and Dr T. Comodini Cachia.

News report: Times of Malta, September 17, 2009

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