Property owners suffering a breach to their fundamental human rights find themselves continually instituting judicial proceedings against the Maltese state for compensation resulting from our state’s failure to strike a fair balance between the general interests of the community and the protection of property owners’ right to property.

The underlying tone of such cases is the cause of disproportionate and excessive burdens imposed on property owners who are till today, and despite relatively recent legal amendments, made to bear most of the social and financial costs of supplying housing accommodation.

The European Court of Human Rights has found a plurality of cases against Malta concerning the same subject matter, despite its due consideration towards the discretion of the state in deciding the form and extent of control over the use of such properties, the low rental value received by the property owners, hooked with their state of uncertainty as to whether they would ever recover possession of the pro­perty, the lack of procedural safeguards in the application of the law and the rise in the standard of living in Malta over the past decades.

The judgment delivered by the First Hall of the Civil Court (Constitutional Jurisdiction) on March 22 (case ref 149/2019 TA) mirrors the situation and procedures available to such property owners who find themselves deprived of the enjoyment of their own property due to the burden imposed on them by the state to supply social housing for others. In the above-cited case, the court declared that owners of such properties suffered pecuniary damages as well as moral damages, and liquidated them at €20,000.

The court further declared that article 12 of Chapter 158 of the Laws of Malta was in breach of the owners’ (plaintiffs) fundamental human rights, specifically such rights emanating from article 37 of the Constitution of Malta and article 1 of Protocol no. 1 of the European Convention. This is because it controls the use of property without fair compensation and in a disproportionate manner, almost completely withholding the owner from the right to possess his pro­perty within a definite period.

The court declared that owners of such properties suffered pecuniary damages as well as moral damages

The plaintiffs in the above-cited case claimed that fair compensation was to be calculated by reducing the sum that had been paid to them by way of rent from the actual rental value of their property as established by the technical court expert appointed. Indeed, the court considered the rental value indicated by the technical expert, which was valued at €410 per month in 2009, and which increased to €655 per month in 2019. However, it also considered that the plaintiffs would not have necessarily found tenants for the whole duration of the indicated period based on the same conditions.

Being a constitutional court, the court may only award damages for a breach of a fundamental human right payable by the state and does not liquidate civil damages by way of deducting the paid-up rent from the actual rental value of the property. Finally, the liquidated sum of €20,000 was calculated by the court by considering compensation covering the period staring from when the emphyteutical deed had expired (in 2009), until the introduction of article 12B in the law (2018).

The merits of the case were as follows. The plaintiffs’ father had entered into an agreement with a third party  regarding his property in Vittoriosa, whereby he conceded the same property to the third party by a contract of temporary emphyteusis for a period of 21 years, starting from June 1988, against the payment of Lm100 per annum.

The agreement had expired, the original contracting parties had passed away and the deceased tenant’s daughter continued living there with her husband and daughter, even after the contractual term had expired in 2009. This was possible because of the amendments to chapter 158 of the Laws of Malta; specifically, article 12, which states that where a dwelling house has been granted on temporary emphyteusis for any period on or after 1979 (as is the case) on expiration of such emphyteusis, where the emphyteuta is a citizen of Malta and occupies the house as his ordinary residence, the emphyteuta is entitled to continue occupying the house under a lease from the directus dominus (owner).

The plaintiffs refused to accept the rent as had been converted in accordance with article 12 of Chapter 158 and so the tenant started depositing the rent in court.

By means of this lawsuit, the plaintiffs (siblings who had inherited the property previously owned by their father) alleged a breach of their fundamental right to enjoy their own Vittoriosa property. They challenged both articles 12 and 12A of Chapter 158 of the Laws of Malta and claimed that such laws have the effect of imposing a lease against their will and without their permission, even after the expiration of the emphyteutical concession.

They claimed that such was against an insignificant amount of rent payment in no way representing fair and appropriate compensation in favour of the property owners, and thus depriving them of the enjoyment of their own property. Even by the increased rent according to the 2009, and subsequently the 2010 amendments, the rent received did not come close to reflect the rental value of their property throughout the years following the expiration of the emphyteutical concession agreement.

In its legal considerations, the court gave weight to the interpretations of the European Court of Human Rights of article 1 of Protocol No.1, whereby the European Court established that rental control and restrictions on the termination of the contract of lease, although legal and made for a legitimate scope and in the general public interest, constitute control on the use of an individual’s property. However,

it remarked that such an intervention is only in conformity with the law when it strikes a fair balance between the demands of the general community and the protections and requirements of an individual’s fundamental rights.

Rebecca Mercieca is an associate at Azzopardi, Borg & Associates Advocates.

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