The owners of a property in Valletta that had been requisitioned by the government in the 1970s, split into several apartments and turned into social housing, have been awarded €250,000 after a court found that their fundamental right to the enjoyment of their property had been breached.

There are numerous similar cases in which owners, who had their properties taken by the state for a pittance, could not repossess it because of the rights granted to tenants through the old rent and requisition laws, and are forced to turn to the courts for just compensation.

Presiding over the the First Hall of the Civil Court in its constitutional jurisdiction, Madam Justice Miriam Hayman ruled that the owners of a building once known as Mayfair House, in Old Bakery Street, had their rights breached when the state took possession of it and made it almost impossible for them to claim it back – until this very day.

The court heard how the property was the Cecil Hotel since the early 1900s and then leased to the General Workers’ Union as offices in the 1950s. When the union moved to its new premises in South Street, Mayfair House was requisitioned by the government in 1973. The block was split into eight residential units and leased out to third parties.

Three of the apartments were de-requisitioned in 2011 when the tenants ceased to qualify for social housing because they had surpassed the personal revenue ceiling.

However, the apartments remained occupied and the owners could not charge rent according to market value.

The attorney general argued – the same argument used in all similar cases – that the property was requisitioned as a temporary measure to control the use of property in the public interest for social purposes, to alleviate the problem of homelessness, and to ensure that individuals who could not afford had a place where to live. It was also argued that there were “serious doubts” on how aggrieved the owners felt as it took them more than 43 years to take the matter to court.

The owners, led by Eric Borg, countered that they never accepted rent from the Housing Authority and they were always against the state of affairs. They were kept in the dark throughout. They instituted constitutional proceedings claiming that the requisition order and subsequent tenancies were in breach of their rights as guaranteed by the European Convention on Human Rights.

A court-appointed expert valued the property at €1.85 million and had a rental value of around €64,750 a year. The commercial value of the property stood at €3.25 million, with a rental value of €195,000 annually.

Handing down her judgment, Madam Justice Hayman noted that the state had failed in proportionality as it did not strike a fair balance between the public interest and the owners’ fundamental right to the enjoyment of their property since they had to accept a value of rent that was substantially lower than the value in the free market. As a result, the burden borne by the owners was “excessive and disproportionate”.

She therefore declared a breach of their property rights and awarded them €250,000 in compensation.

The court did not order an eviction – apart from one flat where the tenant said she did not need it any longer – but specified that if a case for eviction is filed against the tenants, they cannot say that they have a title under the law, whether by requisition laws or old rent laws. This means that the owners will only be able to recover their property following individual eviction cases.

Lawyers Franco Vassallo and Michael Camilleri appeared for the property owners.