Landlords win €150,000 after Constitutional court reduced compensation

The European Court of Human Rights in Strasbourg has awarded the owners of a Sliema house over €150,000 in compensation from the Maltese State, after a constitutional court reduced the original damages they were granted.

Siblings Ian Ellis and Elizabeth Scilio had challenged the Maltese rental ordinance that prevented them from increasing the rent on a house they had forcibly leased to their tenants after the property had been requisitioned by the State.

The Sliema property was requisitioned in 1957 by the State in favour of a third party, for an annual lease of £61. In 1958 the property was derequisitioned and remained in the tenant’s possession under title of lease. In 1980, the two parties agreed to fix the annual rent at Lm100 (€233).

In Malta, the owners challenged the Reletting Urban Property Ordinance, which obliged them to renew the lease on a yearly basis without a possibility of increasing the rent. In 2015, the Civil Court found a violation of their right to enjoyment of their property and awarded them €20,000 in compensation from the State, but refused their request to evict the tenants.

On appeal in 2016, the Constitutional Court upheld the original decision but reduced compensation to €10,000. Following the constitutional judgment the parties negotiated a new reduced rent on condition that the lease would terminate within 18 months.

On an unspecified date in 2017, the tenants vacated the property. But the applicants complained that that they were still victims of the violation of the right to enjoy their property, given the low amount of compensation awarded.

They noted that the €10,000 was a far cry from the court-appointed expert’s estimate of the house’s annual rental value of €16,800. They also said their father had no choice to consent to the 1957 lease as the property had been requisitioned.

The ECHR ordered that the Maltese government pay Ellis and Scilio €148,000 in pecuniary damages, and €5,000 in legal costs.