1265 meeting (20-22 September 2016) (DH)

Transcription

1 SECRETARIAT GENERAL SECRETARIAT OF THE COMMITTEE OF MINISTERS SECRETARIAT DU COMITE DES MINISTRES Contact: Clare Ovey Tel: DHDD(2016)918 Date: 29/08/2016 Documents distributed at the request of a Representative shall be under the sole responsibility of the said Representative, without prejudice to the legal or political position of the Committee of Ministers. Meeting: 1265 meeting (2022 September 2016) (DH) Communication from a NGO (Association of Ownership and Possession of Apartment Owners with Protected Tenants) (10/08/2016) and reply from the authorities (23/08/2016) in the case of Statileo against Croatia (Application No /10). Information made available under Rule 9.2 of the Rules of the Committee of Ministers for the supervision of the execution of judgments and of the terms of friendly settlements. * * * * * * * * * * * Les documents distribués à la demande d un/e Représentant/e le sont sous la seule responsabilité dudit/de ladite Représentant/e, sans préjuger de la position juridique ou politique du Comité des Ministres. Réunion : 1265 réunion (2022 septembre 2016) (DH) Communication d une ONG (Association of Ownership and Possession of Apartment Owners with Protected Tenants) (10/08/2016) et réponse des autorités (23/08/2016) dans l affaire Statileo contre Croatie (Requête n o 12027/10) [anglais uniquement] Informations mises à disposition en vertu de la Règle 9.2 des Règles du Comité des Ministres pour la surveillance de l exécution des arrêts et des termes des règlements amiables.

2 DGI 1 0 AOUT 2016 SERVICE DE L'EXECUTION DES AR8ETS DE LA CEDH UDRUGA VLASNISTVO 1 POSJED VLASNIKA STANOVA SA ZASTléENIM NAJMOPRIMCIMA ASSOCIATION OF OWNERSHIP AND POSSESSION OF APARTMENT OWNERS WITH PROTECTED TENANTS Zagreb, Kneza Mislava 9, Hrvatska/Croatia tel: uvp.zg@hotmail.com web: (j DEPARTMENT FOR THE EXECUTION OF JUDGMENTS OF THE ECHR DgiDirectorate General ofhuman Rights and Rule of Law Secretariat of the Committee of Ministers Human Right Treaties and meetings F67075 STRASBOURG CEDEX, FRANCE August 1, 2016 Pursuant to Rule 9.2 of the Rules of the Committee of Ministers for the supervision of the execution of judgments) we hereby submi1 this communication on the general measures in the Case Statileo v. Croatia Application number 12027/10 Judgment of 10 July 2014 Final on 10 October 2014 Subject: Application of the Association of Ownership and Possession on the proposed amendments to the Apartment Lease Act, proposed by the Ministry of Construction and Physical Planning of the Croatian Government, in relation to the implementation of the conclusions of the European Court of Human Rights in the case of Statileo vs. Republic of Croatia

3 DHDD(2016)918 : Rule 9.2 communication from a NGO in Statileo v. Croatia & reply from Croatia. Documents distributed at the request of a Representative shall be under the sole responsibility of the said Representative, without prejudice to the legal or political position of the Committee of Ministers. / Les documents distribués à la demande d un/e Représentant/e le sont sous la seule responsabilité dudit/de ladite Représentant/e, sans préjuger de la position juridique ou politique du Comité des Ministres. In the context of the procedure for the enforcement of the Judgment, it should be noted that the European Court in the Article 165 of the Judgment singled out the main shortcomings of the existing legislation that should be paid attention to when implementing the enforcement measures and they are: 1. inadequate lev el of protected rent, 2. restrictive requirements for the termination of protected rent, 3. inexistence of any time limit system of protected rent. On 05/01/2016, the Government of Republic of Croatia put forward a proposai of amendments to the Apartrnent Lease Act, which among other things was to meet the above mentioned criteria set forth by the judgment in Statitelo vs. Republic of Croatia. Hereinafter, we would like to briefly point out a solution that is presented in the Draft of the Act and clearly point out the fact that the statements of the legislator on restitution of apartments to their owners are completely unfounded. Although the law nominally sets forth deadlines for the cessation of the status of protected tenants such deadlines have been "de facto" annulled by other legal provisions and the realization of the rights of owners of apartments are completely disabled, therefore, do not be fooled by such deadlines as temporal determinations to the solution of this problem when reading out this law. l. Overview of the legal solutions in relation to the right of the owners to be given the opportunity to dispose of their property within a set time frame, and in terms of land tenure of the same i.e. moving into their apartment: Draft law stipulates that on 01/01/2022 the status of protected tenants is terminated and it is determined that the landlord, if they want to move into the apartment, can cancel the contract to the tenant, but only if they find and offer tenants a lease agreements for an indefinite lime for another appropriate apartment. Following such a proposed solution owners were very unpleasantly surprised by the solutions offered for the following rea'ions: the length of the deadline foreseen by the law for addressing this issue aga.in is very long because since the last failed attempt to solve the same more than two years have past, while the agony that includes unresolved own housing and inadequate financial burden to the owners and their heirs has been going on for several decades, At the same time the precondition that has been set up for the owners in order to cancel the lease agreement for a protected tenant puts again incomprehensibly huge burden on owners and puts them in a situation in which they will not be able to cancel the contract subject to the following reasons: Conclusion of a lease agreement for an indefinite period, if the amendments to this law are accepted, will be completely impossible. In fact, according to the proposed legislative solution in order for the landlords to be able to cancel the lease agreement after the expiry of five years because they want to move themselves or their family members into the apartment (note that a large number of owners have not solved their housing problem) they are ohliged to find and offer the protected tenant a lease agreement for an indefinite period with market rents._at the same time, the legislator in the same draft law that regulates not only the matter of protected lease but also the rental market generally in the Art. 21 also stipulates that any /essor in Republic of Croatia will be obliged, if canceling a lease agreement for an indefinite period on grounds of Art. 21, paragraph 1 to 3, to providc other appropriate apartment to its tenant. In this way, the legislator "very quietly" completely eliminates the category of a lease agreement for an indefinite period from the rental market because the owners of the apartments will 2

4 DHDD(2016)918 : Rule 9.2 communication from a NGO in Statileo v. Croatia & reply from Croatia. Documents distributed at the request of a Representative shall be under the sole responsibility of the said Representative, without prejudice to the legal or political position of the Committee of Ministers. / Les documents distribués à la demande d un/e Représentant/e le sont sous la seule responsabilité dudit/de ladite Représentant/e, sans préjuger de la position juridique ou politique du Comité des Ministres. not be prepared to take such an absurd responsibility and such difficult conditions for termination. At the sarne time in Art. 13 of the Draft Law legislator gives the tenant an option, but also to the owner of the apartment, for the purpose of meeting the requirements to submit an application for renting the apartment to its tenant, but the law for the implementation of the sarne does not set forth any deadlines, and states that the tenant can ask for an apartment to rent or buy an apartment from "subsidized residential construction", if the tenant "commits to the lessor to cancel the lease agreement and hand over the apartment after moving into a new rented or bought apartment." But the law does not give any guarantee for the realization of this right, nor time indication for the realization of this right and therefore this can last for years. Also, the law does not specify the rent paid during the "transitional" period. Therefore, there are two issues: Why such an absurd responsibility was imposed on the owner from which it foil ows that the owner is practically a guardian of its tenant and has an obligation to find him another apartment? Why was not this responsibility undertook by the state? Why was an impossible condition for the termination placed before the legislator, which makes the option for the owner to cancel the lease difficult and completely undetermined timewise? In conclusion: Tîme period in which the owner can take possession of bis apartment under this law is very vaguely determined and does not represent the quoted period of 5 years but makes this possibility per manently impossible or very difficult to achieve given the buge burden imposed on the owner by such a legal solution for the termination of lease. 2. Overview of the legal solutions in relation to the right of the owner to be given the opportunity to dispose of its property within a set time frame, and in terms of achieving profit in terms of market rent from its apartment: Legislator has provided the following legislative solutions for the owner of the apartment: Art. 6 of the Proposed changes and arnendments to the Act provides that protected rent increases each year for 1.2 times its initial arnount, which means, the average protected rent for an apartment of about 60 m2 on the 0 1/01/2017 will arnount to about HRK 150 (approx. EUR 20) and it will increase each year for 150xl,2 which is HRK 180 (about EUR 25), therefore in 2017 it will arnount to HRK 330 (EUR 45), in 2018 HRK 510 (EUR 70), in 201 9, HRK 690 (EUR 95), in 2020 HRK 870 (EUR 120), and in 2021 it will reach its maximum of HRK 1,050 (EUR 145).Current freely contracted market rent for such an apartment on locations where such apartments are located ranges from EUR 250 onwards. The legislator has envisaged that from 0 l /0 l/2022 the protected tenants start paying market rent, but for the owners to be able to get that arnount from the tenants the are obliged to: 1. Offer the tenant to sign a lease agreement for an indefinite period with market rent, 2. If the tenant does not sign the offered agreement within 3 months, the landlord may at its own expense, ask the court to replace such an agreement with a judgment (obtaining this finaljudgment takes many years in Croatia) 3

5 3. The Court will then determine the average market rent for the tenant (i.e. the court will not determine what is the real price of rent for the apartment on the market but will determine the average market rent, with the need to take into account that most of these apartments are located at prime locations in cities) 4. The legislator foresees that the tenant, while the owner fails to obtain a relevant valid court judgment, continues to indefinitely pay the last protected rent as advance of the market rent. 5. If the owner of the apartment has requested that the tenant rents an apartment in the "subsidized residential construction" it is not defined how long should the owner wait for such an apartment and what rent should be paid to the lessor in the meantime. 6. This in short means that no protected tenant will have no economic incentive to conclude such a lease agreement with market rent with the owner of the apartment and immediately start paying market rent for the apartment, when the law gives him the opportunity to pay protected rent until such time when owner substitutes the lease agreement with final judgment when he will start paying average rent. ln conclusion: AP ARTMENT OWNERS WILL NOT BE ABLE TO RECEIVE MARKET PRICE FOR THEIR RENTED PROPERTY FOR MANY YEARS, MUCH LONGER THAN 5 YEARS, AND AN INEXPLICABLE BURDEN OF COVERING THE COSTS OF ADJUDICATION FOR SIGNING OF A LEASE AGREEMENT WITH AN AVERAGE (NOT RELATIVE) MARKET RENT HAS BEEN TRANSFERRED TO THEM. 3. Overview of a legislative solution for rent in relation to the conditions for termination of the lease until 01/01/2022: According to current regulations the owner of the apartment may terminate the lease agreement with the protected tenant: If he himself or his descendants intend to move into the apartment (since the Constitutional Court repealed the second paragraph of this article, based on which the land lord must provide the tenant with another appropriate apartment if the current one is being canceled for these reasons, a legal vacuum has been created in application and courts in such cases judge to rule in favor of the tenants). If he has not solved the housing problem for himself and his family, it is a social case or the owner has more than 60 years of age. With the proposed changes to the Article 40 the legislator offers a new solution that is more restrictive than the existing one and reintroduces the unconstitutional provision: if he himself or his descendants intend to move into the apartment themselves, provided that "be bas secured another suitable apartment for the tenant with the rights and obligations of protected tenants" or If he has not solved the housing problem for himself and his family, it is a social case or the owner has more than 65 years of age (which is a very restrictive category. In conclusion: THE OPTION TO CANCEL THE LEASE AGREEMENT TO A PROTECTED TENANT UNTIL 01101/2022 IS COVERED EVEN MORE RESTRICTIVELY BY THIS SOLUTION THAN THE EXISTING LEGAL 4

6 DHDD(2016)918 : Rule 9.2 communication from a NGO in Statileo v. Croatia & reply from Croatia. Documents distributed at the request of a Representative shall be under the sole responsibility of the said Representative, without prejudice to the legal or political position of the Committee of Ministers. / Les documents distribués à la demande d un/e Représentant/e le sont sous la seule responsabilité dudit/de ladite Représentant/e, sans préjuger de la position juridique ou politique du Comité des Ministres. SOLUTION, AND THE SOLUTION WHICH IS OFFERED AFTER 01/ IS VERY BURDENSOME FOR APARTMENT OWNERS. Legal solution in Art. 40 under paragraph 2 again imposes an unconstitutional provision to the apartment owners. This means that the owners have again been placed in the position in which they can move out protected tenants only if they themselves buy them another apartment because it is absolutely clear that they will not be able to arrange protected rent for them anywhere else, and this legal provision has already been abolished by the judgment of the Constitutional Court and ruled as unconstitutional, and it is completely unclear why the legislator reintroduces it here, and the absurdity lies in the fact that one of the reasons for the adoption of this law states exactly the compliance with the present decision of the Constitutional Court! At the same time, and in paragraph 3 conditions are more restrictive than the existing ones since the age limit bas now been moved from the existing 60 to 65 years. Following all the above, we can conclude: Terms for the termination of a lease agreement have been made more restrictive by this legal solution than they were in the present regulations, since until /2022 they were conditioned by finding another apartment with protected rent, and the age census has been increased from 60 to 65 years of age for those owners who want to cancel the agreement because they have not solved their own housing problem, and after that date by finding another lease agreement for an indefinite period (which is unusual on the real estate market, and this makes the law extremely unattractive for apartment owners in general because to cancel such lease agreements they have to find another appropriate apartment with a lease for an indefinite time, so no landlord on the market will not offer the conclusion of such an agreement because it shall constitute excessive burdon). Entry into possession of own real estate in this way bas been prolonged indefinitely for the owners. Also, legislator has rejected the solution of the previous draft law in which there were more favorable legislative solutions for the most vulnerable of all the groups, and these are apartment owners who have not solved their own housing problem (unless they are a social category or older than 65). Please note that the final draft law provided a solution for such landlords in the period of three years, and since then two years have past, and now offers a solution after 5 or even more years, which means that they get their final decision in relation to the first bill in well over three years, i.e. the realization of their rights by such solution have been extended indefinitely. The absence of any time limit for a protected lease has not removed because after the expiry of five years during which rent does not reach the market value, the payment of the corresponding nonmarket rent is extended until obtaining a judgment by the owner of the apartment in which he will be granted for an indefi nite period the average (not real) market value of the rent. Obtaining the final judgment in the Republic of Croatia can last for years, and the owners are forced to bear the legal costs of obtaining such a judgment and it is clear from the legislative solution that protected tenants resort to this way of dealing with things because it rnakes it possible for them to pay protected rentas a down payment for many years. With this legal solution protected rent has been extended indefinitely. The owner of the apartment with a protected tenant in relation to the owner of any other apartment has the following duties: for an undetermined number of years to put up with a tenant in bis apartment who bas not been chosen bv himself, since be was imposed an obligations to offer this tenant a an indefinite period after the expiry of five years, lease agreement for 5

7 for another 5 years suffer receiving rent which is substantially lower than market rent, and still considerably lower than the rent which the state collects for its own apartments, and then at his own expense to file a lawsuit to establish the average (not real) market rent and until an indeterminate date of the adoption of a final judgment continue to receive protected rent "as a down payment", with the retention of ail obligations in terms of paying taxes on the rent and the obligation to maintain the building, for an undetermined number of years they do not have the possibility of termination of the lease agreement since in the following 5 years the cancellation of the lease agreement becomes extremely restrictive (more restrictive than the current solution), and after expiry of the deadline conditioned by a burdensome condition that bas been for completely unclear reasons transferred to the lessor in terms of finding another apartment for an indefinite period with a market rents for the tenant, during ail that time, the owner is responsible for keeping the property maintained, which be bas been maintaining for years because protected rent that has been paid for decades was not enough even to cover the cost of maintenance and therefore these costs for decades were borne by the owners of apartments who can not exercise tbeir right of ownership, is obliged to pay tax on protected rent received from tenants (i.e. in addition to being required to put up the care of private individuals in favor of the state at its own burden, be is obliged to pay the state taxon that minimum amount of rent!!) will be fiable for the announced reaj estate tax, which should soon be introduced in Croatia although the realization of bis property rights by this law is completely undefined by time and in relation to other owners significantly limited, if he cornes into possession ofhis own property (which bas an indefinite time frame) the law does not acknowledge any compensation for wear of the real estate in which protected tenants have been living for years with protected rents that are even less than the costs of maintenance. Following all of the above we refer the above subject to be taken into account when assessing whether this law is really fulfilling the conditions imposed by the judgment Statileo vs. Republic of Croatia, and whether such imposed charges for the owners of apartments are reasonable legal and fair because from such legislation it is probable that Republic of Croatia again refuses to take responsibility for solving this problem and once again takes care of the social category of its residents exclusively at the expense of private owners. Therefore, please use all legal means to influence the Government of Croatia to finally after many years complies with its obligations. Sincerely, Association of Ü\\<nershi Igor Leskovar, LLB President Dra.Zen Orian Vice President (~ / ~ lj' rzcv( \ \ 6

8 DGl GOVERNMENT OF THE REPUBLIC OF CROATIA OFFICE OF THE REPRESENTATIVE OF THE REPUBLIC OF CROATIA BEFORE THE EUROPEAN COURT OF HUMAN RIGHTS 2 3 AOUT 2016 SERVICE DE L'EXECUTION DES ARRETS DE LA CEDH Class: 00402/ 1402/ 19 Reg.No.: / l16 1ci1 Zagreb, 23 August 2016 COUNCIL OF EUROPE DIRECTORA TE GENERAL HUMAN RIGHTS AND RULE OF LAW DIRECTORA TE OF HUMAN RIGHTS DEPARTMENT FOR THE EXECUTION OF JUDGMENTS OF THE EUROPEAN COURT OF HUMAN RIGHTS Mrs Genevieve Mayer, Head of Department Subject: Statileo v. Croatia (application no /10), J udgment of 10 July 2014, Final on 10 October 2014 Dear Mrs Mayer, In accordance with your letter of 16 August 2016 with reference to the above mentioned case, the Republic of Croatia has the honour to submit herewith the comments on the letter submitted to the Committee of Ministers by the Association of Ownership and Possession of Apartment Owners with Protected Tenants (hereinafter: the Association), which refers to the general measures for the execution of the aforementioned j udgment. As the Republic of Croatia already informed the Committee of Ministers in the Updated Action plan submitted on 5 July 2016, the legislative process for the adoption of the Amendments to the Lease of Fiats Act has currently been paused due to the specific political circumstances. The Parliament has been dissolved in June Early parliamentary elections shall be held on 11 September Accordingly, at this time, prior to forming of the new Parliament and the Government, no legislative activities are possible. As regards the specific content of the letter submitted to the Committee of Ministers by the Association, the Republic of Croatia takes note of the fact that the letter relates exclusively to the content of the Draft Amendments to the Lease of Fiats Act (hereinafter: the Draft). Many of these comments have already been presented to the relevant authorities Address: Dalmatinska 1, ZAGREB, CROATIA, Tel.: , Fax: , ured@zastupnikesljp.hr, Web:

9 2 during the public debate phase, they have been duly considered and partially accepted and the last Draft changed accordingly. Thus, the comments of the Association do not reflect the content of the last Draft. Due to the nature of the legislative process ahead (which includes the Draft being accepted by the Govemment at which point it becomes a Proposai which is then referred to the Parliament for discussion, at which point further amendments can be made prior to passing of the law), it is believed that a discussion before the Comrnittee of Ministers on the concrete content of the ( current or future) Draft is premature. The Republic of Croatia would like to take this opportunity to once again express its strong comrnitment to effective execution of this judgment and creating an effective solution of this longstanding issue. The Committee of Ministers shall be duly informed on ail relevant developments as soon as any new relevant information becomes available. Yours sincerely, r Re~ res ntative of Croafa before the Eurd~ean Court of Hum Rights