BUSINESS IN SHORT

ECHR shoots down regulated rent

RENT control, applied to certain properties in Bratislava and Trnava, infringes on the rights of property owners, the European Court of Human Rights (ECHR) ruled on January 28.

RENT control, applied to certain properties in Bratislava and Trnava, infringes on the rights of property owners, the European Court of Human Rights (ECHR) ruled on January 28.

The ruling in the case of Bittó and others vs. Slovakia is the first case concerning rent control to emerge.

The state first enacted rent control after the fall of communism, when some residential homes that had been confiscated under the totalitarian regime were restored to their original owners. The tenants of the flats in those properties, who were granted the right of lasting use under communism, were allowed to remain in the flats after the regime’s collapse, with the state regulating the amount of rent they had to pay.

The property owners complained that they were forced to rent their flats way below market prices, which in some cases was not enough to cover utilities. In some instances, flats that would normally rent for €700 a month were rented for as little as €120.

The property owners sued Slovakia for interfering with their right to the peaceful use of their property.

The ECHR admitted that the system of regulated rent in Slovakia has a basis in related laws and accepted the Slovak government’s argument that rent control has a legitimate aim, and is thus in line with the public interest, Marica Pirošíková, Slovakia’s representative before the ECHR, wrote in her press release.

The ECHR further stated that the property owners in question lost tens or even hundreds of thousands of euros as a result of rent control, based on market rates. The court has yet to rule about compensation for damages the state should pay the applicants.

The Transport Ministry, the Justice Ministry and the Finance Ministry will put together a team to deal with the ECHR ruling, Finance Minister Peter Kažimír said in reaction to the ruling, as reported by the TASR newswire.

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