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Court backs man seeking compensation for rent regulation

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Brno, Jan 30 (CTK) – The Czech Constitutional Court (US) on Tuesday met a flat owner’s claim for a compensation for the state regulation of rents, also deciding based on last year’s verdicts of the European Court of Human Rights that backed a compensation calculation method advantageous for other Czech flat owners.

The Strasbourg-seated court said last year that the primary criterion for deciding on the compensation level for a restriction of the ownership rights must be the difference between the market rent in the given locality and period, and the rent the owner could gain or gained based on the regulation rules.

According to the US decision on Tuesday, however, the Strasbourg court admitted that the above difference need not be the only criterion.

“As a result, courts can also take other circumstances into account, while a diversion from the above mentioned main method of calculating the compensation must be based on matter-of-fact reasons that aim at a just solution and lean on convincing and rational arguments,” the US stated.

The owner of a Prague flat claimed compensation worth 116,270 crowns from the state for the rent regulation, which he called a restriction of his ownership rights, from June 2005 to March 2006. He said the claimed sum corresponds to the difference between a usual rent for flats like his, and the regulated rent in the given period.

A Prague district court first recognised the man’s claim worth 107,269 crowns and rejected the rest.

The state appealed the verdict, the Prague Municipal Court cancelled it and the district court subsequently dismissed the complaint, citing the higher court’s verdict indicating that the compensation should be calculated as a difference between the regulated rent in the given period and a higher though still regulated rent that was introduced as of January 1, 2007 based on the law on gradual rent deregulation.

This difference was 779 crowns a month and 7,790 crowns for the given ten-month period, which, the district court said, was not that intensive restriction of the complainant’s property or rights. That is why he received nothing.

Now the district court has to deal with the case anew.

The rent regulation was introduced in the Czech Republic in 1991. The deregulation process was launched in 2007, it applied to 700,000 households and was completed in 2012.

About 5,000 Czech owners of flats and apartment houses filed a complaint in Strasbourg in 2005. They claimed that not even their minimum profit for the real estate maintenance was guaranteed due to the rent regulation. They put their total damage at almost 50 billion crowns.

Last year, the European Court of Human Rights ruled that the Czech Republic must pay 2.19 million crowns to three complainants to cover the difference between the market rent and the regulated rent from the period before the rent deregulation.

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