LIEPAJNIEKS v. LATVIA
Inadmissible
Corneliu Bîrsan;Egbert Myjer;Ineta Ziemele;Josep Casadevall;Luis López Guerra
1. The applicant, Mr Fricis Liepājnieks, is a Latvian national who was born in 1927 and lives in Rīga. He was represented before the Court by Ms D. Rone, a lawyer practising in Rīga. The Latvian Government (“the Government”) were represented by their Agent, Mrs I. Reine. 2. The creation of the Republic of Latvia was proclaimed on 18 November 1918. Different types of property rights were recognised, including the ownership of residential buildings. 3. A large-scale entry of the Soviet army into Latvia took place in June 1940. After the lawful government of the country was overthrown and Soviet rule was imposed by force (see, mutatis mutandis, Kolk and Kislyiy v. Estonia (dec.), nos. 23052/04 and 24018/04, ECHR 2006I), the nationalisation of property began. Property was expropriated without any compensation (see paragraph 35 below). 4. The building located at 129 Ģertrūdes street was amongst the buildings nationalised. From 1969 the applicant lived in an apartment located in that building on the basis of a lease agreement concluded on 19 April 1969 (“the 1969 lease”) with the Housing Department of the Moscow District of Rīga City (Rīgas pilsētas Maskavas rajona namu pārvalde). The agreement was a pre-typed standard text, not indicating the amount of rent payable. It entitled the applicant and his family members to rent the apartment for an indefinite period of time. Under Soviet law the amount of rent payable was not set by the parties to the lease but by the State’s administrative authorities. By a decision of 12 January 1995, the building located at 129 Ģertrūdes street was returned to its former owner. The applicant continued to live in the apartment located in that building until 4 August 2008, when he moved out. 5. On 4 May 1990 the Supreme Council, the legislative assembly elected on 18 March in the same year, adopted the Declaration on the Restoration of Independence of the Republic of Latvia. On 21 August 1991 the Supreme Council passed the Constitutional Law on the Statehood of the Republic of Latvia, proclaiming full independence with immediate effect (see Kononov v. Latvia [GC], no. 36376/04, §§ 27-28, 17 May 2010). 6. On 30 October 1991 the Supreme Council adopted the Law on Denationalisation of Real Estate, whereby the decrees on nationalisation issued after 1940 were declared null and void. The nationalised buildings were to be returned to their former owners or their heirs. The former lease agreements concluded with tenants in those buildings under Soviet law continued to be binding in their entirety until 1994, and from then on only in so far as the term of lease was concerned. The amount of rent payable was determined by the State. During the first seven years after restoration of their property rights, owners could not evict tenants without allocating them another place of residence. After that period eviction could take place in accordance with the Law on Residential Tenancies. On the same date – 30 October 1991 – the Supreme Council passed the Law on the Return of Real Estate to the Legitimate Owners. 7. On 30 October 1991 the Decision on Entry into Force of these two laws (“the Supreme Council’s Decision”) was enacted. It required the Council of Ministers to draft a law on compensation and submit it to the Supreme Council by 1 December 1991, and to draft and stipulate regulations for credit arrangements for tenants. In 1992 the Supreme Council and its respective committees examined a draft law “On Restitution of Property and Compensation”, but that law was never enacted. The draft did not include any reference to tenants’ right to receive compensation. On 5 November 1992 the Economic Committee of the Supreme Council (Augstākās padomes Ekonomikas komisija) rejected the draft because it was necessary to specify its sphere of application. It also had to be aligned with the provisions of the Law on Privatisation Certificates and the Civil Law. The Ministry of Economic Reforms was instructed to improve the draft within two weeks and re-submit it to the Supreme Council. It appears that this task was never completed. It should be noted, however, that on 1 June 2006 six members of the Latvian Parliament (Saeima) submitted for examination a draft law on compensation for tenants. On 12 October 2006 that draft was accepted at first reading in one of the last sessions of the Parliament before the expiry of its term. The draft law was never reviewed at second and third reading and was therefore never passed. 8. Another part of the property reform in the 1990s was the privatisation of State and municipally owned property. Those who resided in such buildings took this opportunity to acquire property rights over apartments located in them through privatisation. 9. In accordance with the Law on Residential Tenancies, enacted on 16 February 1993, the amount of rent payable by tenants in denationalised buildings or those returned to their former owners was to be established on the basis of a written agreement, but could not exceed the maximum amount determined by the State. That law was amended on several occasions. On 8 March 2006 the Constitutional Court declared the statutory rent limits unconstitutional and declared them void as of 1 January 2007. 10. From 1 January 2007 onwards owners were entitled to increase rent by serving notice on their tenants of their intention to do so. Tenants could challenge it by lodging a claim with the civil courts. The courts would then decide whether the amount of rent was warranted and adequate; owners were accordingly required to justify the amount requested. Evictions could not take place without a court order, and tenants were entitled to receive advance notice, and to the opportunity to be heard, before being evicted. 11. On 4 August 2008 the applicant moved out of the apartment allegedly because he could not afford to pay the rent. He did not initiate proceedings in the civil courts over the amount of the rent. Nor was he subject to eviction proceedings. According to the information provided by the Government, since 4 August 2008 the applicant is residing in another dwelling, namely, a house entered into the Land Register as his spouse’s property in part (50%) (1/2 domājamās daļas). The applicant did not contest this. 12. On 11 August 2006 the applicant lodged a civil claim with the Rīga Regional Court (Rīgas Apgabaltiesa) against the State represented by the Cabinet of Ministers (Ministru kabinets) and against the Rīga City Council (Rīgas dome). He requested the court to compel the Cabinet of Ministers to comply with the Supreme Council’s Decision in his case and to allocate him an equivalent apartment or grant compensation to acquire such an apartment in the amount of Latvian lati (LVL) 31,500 (approximately EUR 45,000). 13. On 14 August 2006 the regional court dismissed the applicant’s claim without examining it on its merits. The court found that the applicant had lodged his complaint against the State represented by the Cabinet of Ministers and against the Rīga City Council and, in substance, had requested that an action of executive power (action or omission of a public authority) be subjected to judiciary control. According to the court, such claims fell within the jurisdiction of the first-instance administrative district court; there was no dispute over a civil right. The applicant submitted an ancillary complaint against that decision. 14. On 16 October 2006 the Civil Chamber of the Supreme Court (Augstākās tiesas Civillietu tiesu palāta) quashed the decision of the regional court and issued a new ruling. The applicant’s claim was rejected on the ground that it was not subject to examination by a court. The court held, inter alia: “... [the applicant] in fact requests the allocation of an apartment but such issues are to be resolved in local municipalities – in the present case the Rīga City Council, in accordance with the Law on State and Municipal Assistance Concerning Apartment Issues... [The applicant’s] claim would be subject to examination by an administrative court if the Rīga City Council were to adopt a decision unfavourable to him, in which case there would be grounds for appeal against the decision under the provisions of the Law of Administrative Procedure. Thus, administrative proceedings should be initiated before the administrative body concerned, whose decision can be appealed against [in a court] in accordance with the provisions of the Law of Administrative Procedure”. The applicant submitted an ancillary complaint against that decision. 15. On 8 December 2006 the Senate of the Supreme Court (Augstākās tiesas Senāts) upheld the decision of its Civil Chamber. The court stated that: “The allocation of a place of residence and alternative claims for compensation do not fall within the competence of a court.... In his claim, [the applicant] has linked his considerations with the Supreme Council’s Decision of 30 October 1991. But he has not taken into account that the legal provision [contained therein] does not provide for the existence, change or termination of a substantive legal relationship between the applicant, on the one hand, and the Cabinet of Ministers [or] the Rīga City Council [on the other hand]... [The applicant’s] claim relates to issues falling outside the competence of the judiciary”. 16. On 16 January 2007 the applicant lodged a claim with the Administrative District Court (Administratīvā rajona tiesa) against the State represented by the Cabinet of Ministers and against the Rīga City Council. He submitted that the Cabinet of Ministers and the Rīga City Council were responsible for the fact that the apartment he was renting had been handed over to another person and that his right to lease had been breached; he had suffered non-pecuniary and pecuniary damage. He requested the court to compel the Cabinet of Ministers and the Rīga City Council to comply with the Supreme Council’s Decision and other legislative enactments and grant him compensation in the amount of LVL 31,500 to acquire an apartment of the same standard and LVL 50,000 for non-pecuniary damage. He also complained that the binding regulations of the Rīga City Council under which eligibility for registration to receive offers of lets of apartments owned by the municipality depended on monthly income were discriminatory. 17. The applicant’s claim was examined in the district court, the regional court and the Supreme Court, which adopted a final decision on 8 June 2007. The Administrative Department of the Senate of the Supreme Court (Augstākās tiesas Senāta Administratīvo lietu departaments) examined separately each branch of the applicant’s claim. 18. First of all, the Senate considered whether the applicant had a right to claim compensation for an apartment of the same standard under domestic law. The Senate established that a draft law on compensation referred to in section 4, paragraph 2 of the Supreme Council’s Decision had not been enacted, and that consideration therefore had to be given to whether tenants’ right to compensation derived from the Laws on the Return of Real Estate to the Legitimate Owners and on Denationalisation of Real Estate in the Republic of Latvia. The first of those laws did not provide for such compensation rights, but for social rights to retain the right to lease (section 12), to statutory rent limits (section13) and to have another apartment allocated in the event of eviction (sections 15 – 17). Under the second law only former owners or their legal heirs, not tenants, were entitled to compensation. The Senate concluded that the applicant did not have a subjective right to compensation in order to acquire an apartment of the same standard on the basis of the above-mentioned laws. 19. The Senate then proceeded to examine whether such a right to compensation could be derived from the Law on Administrative Procedure, since under section 92 of that law every person has a right to request adequate compensation for pecuniary or non-pecuniary damage suffered as a result of an administrative act (administratīvais akts) or action of a public authority (faktiskā rīcība). The Senate considered whether the elements of an action of a public authority were found in the relevant actions or omissions of the State authorities (whether the person had a right to such act and whether, by such act, his or her subjective rights or interests might have been affected). 20. Since the applicant did not have a right under domestic law to privatise the apartment in the denationalised building, he could not request the authorities to ensure such rights or to ensure that they were protected during the process of denationalisation of the building where his rented apartment was located. Therefore, the denationalisation of the building was not an action of a public authority in so far as the applicant was concerned (within the meaning of the Law of Administrative Procedure) and was not subject to administrative proceedings. 21. Taking into account that the drafting and enactment of laws was the prerogative of the State’s legislative power, the alleged omission of the Cabinet of Ministers to draft a law on compensation was not an action of a public authority (within the meaning of the Law of Administrative Procedure) and, thus, was not subject to administrative proceedings. 22. As to the applicant’s running a risk of having to pay higher rent and losing his home, the Senate noted that the applicant was dissatisfied with the implementation of the State’s policy, which is not an action of a public authority and therefore cannot be reviewed in administrative proceedings. 23. Finally, as concerns the allegedly discriminatory regulations of the Rīga City Council, the Senate considered that examination of such a claim fell within the competence of the Constitutional Court. 24. Accordingly, the Senate dismissed the claim as inadmissible on the grounds that it was not subject to administrative proceedings and that the applicant did not have a right of claim. 25. The Law on Denationalisation of Real Estate (likums “Par namīpašumu denacionalizāciju Latvijas Republikā”) was adopted on 30 October 1991 and took effect on 1 January 1992 (see paragraph 29 below). In its relevant part it provided as follows: “To repeal the following: The Decree on Nationalisation of Large Buildings issued by the Presidium of the Supreme Council of the Latvian SSR on 28 October 1940 and all legislative enactments issued under that decree; ... All decrees issued by the Presidium of the Supreme Council of the Latvian SSR on nationalisation of buildings owned by individual natural persons.” “Lease or rental agreements concluded by the previous manager shall be binding on the owners of denationalised buildings. Amendments to lease or rental agreements shall be made only with the approval of the municipal authorities and under a procedure prescribed by law.” “Rent in denationalised buildings or apartments shall not exceed the amount established by the Council of Ministers.” “Eviction from denationalised buildings shall take place only under the Latvian Apartment Code, but for the first seven years after restoration of property rights, in cases when the owner requests eviction under section 147 or section 149, paragraph 1, only if an equivalent place of residence is offered [to the tenants].” 26. On 16 January 1994 amendments to the Law on Denationalisation of Real Estate entered into force, whereby section 15 was amended to refer to the relevant provisions of the newly adopted Law on Residential Tenancies: section 29, parts 4 and 5. On 7 April 1994 another set of amendments to the law entered into force (“the 1994 amendments”). The relevant provisions, following those amendments, read as follows: “The term of lease or rent concluded by the previous manager shall be binding on the owners of denationalised buildings unless otherwise provided in this law.” “The amount of rent [determined] without their consent for tenants who had concluded agreements with previous managers of denationalised buildings shall not exceed the amount established by the Cabinet of Ministers.” 27. The Law on the Return of Real Estate to the Legitimate Owners (likums “Par namīpašumu atdošanu likumīgajiem īpašniekiem”) was passed on 30 October 1991 and took effect on 20 November 1991. In its relevant part it provided as follows: “The property rights of the former owners or their legal heirs, irrespective of their current nationality, of buildings arbitrarily taken over by the State or legal entities in the 1940s to 1980s, without compensation and with complete disregard for their ownership rights, shall hereby be restored.” “Monetary disputes between the former manager and the owner shall be resolved under the Latvian Civil Code.” “Lease or rental agreements concluded by the previous manager shall be binding on the owners of returned buildings. Amendments to lease or rental agreements shall be made only with the approval of the municipal authorities and under a procedure prescribed by law.” “Rent in returned buildings or apartments shall not exceed the amount established by the Council of Ministers.” “Eviction from returned buildings shall take place only under the Latvian Apartment Code, but for the first seven years after restoration of property rights, in cases when the owner requests eviction under section 147 or section 149, paragraph 1, only if an equivalent place of residence is offered [to the tenants].” 28. On 16 January 1994 amendments to the Law on the Return of Real Estate to the Legitimate Owners entered into force, whereby section 15 was amended to refer to the relevant provisions of the newly adopted Law on Residential Tenancies: section 29, parts 4 and 5. On 7 April 1994 another set of amendments to the law entered into force (“the 1994 amendments”). The relevant provisions of the Law on the Return of Real Estate to the Legitimate Owners then read as follows: “The term of lease or rent concluded by the previous manager shall be binding on the owners of returned buildings unless otherwise provided in this law.” “The amount of rent [determined] without their consent for tenants who had concluded agreements with previous managers of returned buildings shall not exceed the amount established by the Cabinet of Ministers.” 29. On 30 October 1991 the Supreme Council adopted the Decision on Entry into Force of the Laws on the Return of Real Estate to the Legitimate Owners and on Denationalisation of Real Estate (Lēmums “Par Latvijas Republikas likumu “Par namīpašumu atdošanu likumīgajiem īpašniekiem” un “Par namīpašumu denacionalizāciju Latvijas Republikā” spēkā stāšanās kārtību”): “The Supreme Council of the Republic of Latvia decides: 1. [that] Until the buildings are returned to their legitimate owners it shall be prohibited to sell [or change the ownership in any other way], reconstruct, rebuild and demolish these buildings as well as to have new tenants located in the residential and non-residential premises which have become available. This prohibition shall enter into and remain in force from the date of this decision until the expiry of the statute of limitations for submitting a claim or an application. 2. [to] Stipulate that the seven-year period during which, after restoration of property rights, tenants cannot be evicted without having been allocated an equivalent residence, as prescribed by the Laws on the Return of Real Estate to the Legitimate Owners and on Denationalisation of Real Estate in the Republic of Latvia, applies also in cases when a judgment on a tenant’s eviction pursuant to sections 147 and 149 of the Latvian Apartment Code has not yet been enforced on the date of this decision. This article does not apply when tenants have been placed in a building after a previous owner has submitted a claim to have his property rights restored. In such cases the time-limit shall be one year from the date of restoration of property rights. 3. [to] Stipulate that the Law on Denationalisation of Real Estate in the Republic of Latvia shall enter into effect on 1 January 1992. 4. [to] Obligate the Council of Ministers: 1) to submit to the Supreme Council a draft law on amendments to existing legislation with regard to the enactment of the Laws on the Return of Real Estate to the Legitimate Owners and on Denationalisation in the Republic of Latvia by 1 January 1992; 2) to draft and submit to the Supreme Council a draft Law on Compensation by 1 December 1991; 3) to draft and adopt the Regulations on Denationalisation in the Republic of Latvia and [a model] denationalisation certificate by 10 December 1991; 4) to amend the government’s legislative acts on apportionment and change of residential property with regard to the entry into effect of the Laws on the Return of Real Estate to the Legitimate Owners and on Denationalisation in the Republic of Latvia by 10 December 1991; 5) to draft and stipulate simplified regulations on credit arrangements for tenants residing in denationalised buildings or houses that have been returned to their legitimate owners if those tenants were registered to receive an equivalent residence because of the denationalisation of that property and have expressed the wish to build an individual house for residential purposes; 6) to harmonise the government’s decisions on the material rights of oppressed and deported nationals with the Laws on the Return of Real Estate to the Legitimate Owners and on Denationalisation in the Republic of Latvia by 1 December 1991. 5. [to] Obligate parish, city and district authorities: 1) to identify the buildings taken from previous owners in their territory; 2) to provide the legitimate owners who have obtained a residency permit in Latvia in connection with the denationalisation or return of the buildings to them, with land to build individual houses for residential purposes; 3) in dealing with questions of allocation of equivalent residential property or land to tenants residing in denationalised buildings, primarily to ensure that previous owners residing in their territory can return to their properties; 4) to promote exchanges of apartments between owners of denationalised buildings and houses that have been returned to their legitimate owners [on the one hand] and tenants of such buildings [on the other hand], if as a result of such an exchange the owner takes up residence in his building. 6. [to obligate] The Ministry of Finance to draft and submit to the Presidium of the Supreme Council by 10 December 1991 a draft enactment on methods of compensation for denationalised buildings and calculation of the buildings’ value. 7. [to] Obligate the Legislation Committee of the Supreme Council to submit the part of Latvian Civil Law concerning inheritance for consideration, and amendments and additions to the parts of the civil code on property law and obligations law for the third reading, by 30 November 1991.” 30. On 16 February 1993 the Law on Residential Tenancies was adopted (Likums “Par dzīvojamo telpu īri”); it entered into force on 1 April 1993. Over time, it has been amended on several occasions. The relevant provisions were spelled out in the Constitutional Court’s judgment of 8 March 2006 (see paragraph 35 below). 31. For the present purposes the 2001 and 2004 amendments to that law are of importance. They were adopted on 5 July 2001 and 20 December 2004 and took effect on 1 January 2002 and 1 January 2005 respectively. With the 2001 amendments the transitional provisions stipulated the maximum amount of rent payable per square metre (the statutory rent limits) if the owners of denationalised or returned buildings could not reach an agreement with their tenants. The amount was fixed at 0.24 Latvian lati (LVL) in 2002, LVL 0.36 in 2003 and LVL 0.48 in 2004. With the 2004 amendments the statutory rent limits were set for three more years – LVL 0.60 in 2005, LVL 0.72 in 2006 and LVL 0.84 in 2007. These statutory rent limits were abrogated by the Constitutional Court with effect on 1 January 2007. 32. Following the 2001 amendments, the sections relating to dispute resolution in the event of eviction read as follows: “The landlord may terminate the lease and evict a tenant together with family members and other persons without allocating them another place of residence in the following situations: 1) if the tenant does not pay rent for more than three months while continuing to have the use of the residence in accordance with the lease agreement and relevant legal provisions, ... Before bringing an action in court, the landlord shall give the tenant at least one month’s notice of termination of the lease. ...” “Disputes arising from residential tenancy relations shall be adjudicated in a court.” 33. With the 2004 amendments, a new Article was introduced in the transitional provisions: “14. The Cabinet of Ministers shall develop by 1 March 2005 and implement by 1 July 2005 a State and local government support programme and compensation mechanism for tenants renting residential accommodation in a denationalised residential building or one which has been returned to a legal owner and who have been using such accommodation up to the time of restoration of the property rights to the previous owners or their heirs.” 34. The relevant provisions of this law have been quoted elsewhere (see Grišankova and Grišankovs v. Latvia (dec.), no. 36117/02, ECHR 2003II (extracts)). 35. In case no. 2005-16-1 the Constitutional Court examined individual constitutional complaints lodged by the owners of denationalised buildings. They complained that the 2004 amendments in so far as they related to the statutory rent limits were unconstitutional. In its judgment of 8 March 2006 the court declared that provision unconstitutional and null and void as of 1 January 2007. The judgment, in its relevant part, reads as follows: “1. In 1940, after the establishment of Soviet occupation, the nationalisation of private property began in Latvia. To implement it, on October 28 the Presidium of the Latvian SSR Supreme Council passed a Decree “On Nationalisation of Large Buildings’’. Under that Decree those buildings, the “total useful area” of which exceeded 220 square metres in Riga and other major cities of Latvia and 170 square metres in smaller towns, were nationalised. In addition, all those buildings in which State institutions were located, as well as houses whose owners did not reside in Latvia and buildings having historical or artistic value were nationalised. Over the following decades the Soviet power continued divesting owners of their properties. ... On 30 October 1991 the Republic of Latvia Supreme Council adopted the Law “On the Denationalisation of Buildings in the Republic of Latvia”, by which the above Decree and the normative acts issued in accordance with it were declared null and void. On the same day the Law “On the Return of Real Estate to the Legitimate Owners” was passed. Its Section 1 stipulates that “The property rights of the former owners or their legal heirs, irrespective of their current nationality, of buildings arbitrarily taken over by the State or legal entities in the 1940s to 1980s, without compensation and with complete disregard for their ownership rights, shall hereby be restored”. In the ensuing years, on the basis of the above laws, buildings were denationalised and returned to their legal owners. Many of those properties still had tenants living in them who had concluded rental contracts prior to the restoration of property rights. ... 2. ... Section 11, paragraph 1 of the Law on Residential Tenancies [enacted in 1993] provided that “rent shall be determined on the basis of an agreement between the parties, but it shall not exceed the maximum amount established by the government”. In their turn the 1997 amendments stipulated that “rent shall be determined on the basis of a written agreement between the parties, except in the cases specified in the second, third and fourth paragraphs of this section”. Section 11, paragraph 4 provided: “In denationalised buildings and buildings that have been returned under the Law on the Return of Real Estate to the Legitimate Owners, in respect of tenants who were renting the apartments at the time of the denationalisation (or return to owners) the rent shall be determined on the basis of a written agreement and in accordance with the Cabinet Regulations on the procedure for calculating rent. On 1 January 2002 amendments to the Law on Residential Tenancy took effect, incorporating the provision on statutory rent limits in denationalised or returned buildings into the Transitional Provisions of that Law. Article 4 of the Provisions provides that if the tenant was resident in the building before its restoration to the rightful owner, the rent shall be determined by agreement between the parties. If no agreement is reached, then the rent shall be determined by the owner, but it shall not exceed LVL 0.24 per square metre of rented area a month in 2002, LVL 0.36 in 2003 and LVL 0.48 in 2004. ... 4. On 20 December 2004 amendments to the Law on Residential Tenancies were adopted. They took effect on 1 January 2005... 5.1. The Parliament, in its reply, stressed that the contested provision had been enacted in order to balance the interests of the owners of denationalised apartment buildings, the State, the municipalities and the tenants of such buildings with respect to the statutory rent limits. Referring to the judgment of the European Court of Human Rights in the case of ... (Hutten-Czapska v. Poland [2005] ECHR 119), the Parliament indicates that the imposition of restrictions in respect of rent has a legitimate aim – to secure the social protection of indigent tenants having regard to the continuing lack of residential accommodation and the existing concern at demands for unjustifiably high rent. Furthermore, this legitimate aim has to be examined in a broader context since the housing problem creates infringements of other human rights, such as social security and children’s rights. ... 6.5. According to Professor K. Torgāns, even if the impugned provisions had not been adopted, the owners of the apartments would not be free to fix any rent they wished as section 13 of the Law on Residential Tenancies establishes agreement between the tenant and the owner as a general principle, as well as the settling of disputes in court. ... 7.1. [the Parliament’s representative] stated that neither the State nor the municipalities possessed sufficient financial means to offer tenants residing in denationalised buildings or buildings returned to their legitimate owners adequate compensation... . 8. Denationalisation and return of buildings to the owners after the restoration of Latvia’s independence was carried out in the context of the property reform, which also regulated legal relations between the owners of the buildings and persons who had used apartments in the denationalised or returned buildings prior to the restoration of ownership rights (henceforth – “pre-reform tenants”). When analysing issues connected with one part of the property reform – land reform – the Constitutional Court has established that “Latvia is not responsible for violations of human rights, including nationalisation of property, perpetrated by the occupying power. The Republic of Latvia has no possibility and no duty to fully compensate all losses inflicted on persons by the occupying power” (Judgment of the Constitutional Court in case no. 2002-12-01, 25 March 2003). Simultaneously the Constitutional Court ruled that “When restoring the legal system of independent Latvia, the legislator had a duty to take measures to restore fairness and redress the losses inflicted by the previous regime, by observing the principles of the rule of law. At the same time the legislator, when choosing the means for the land reform, had to strike a fair balance between the conflicting interests of various members of society” (ibid.). The legislator must also observe the principles of rule of law when implementing other aspects of the property reform, including denationalising and returning buildings to their rightful owners. ... 10. Article 105 of the Constitution (Satversme) provides: “Everyone has the right to own property. Property shall not be used against the public interest. Property rights may be restricted only in accordance with the law”. In conformity with Article 89 of the Constitution “the State shall recognise and protect fundamental human rights in accordance with this Constitution, the law and international agreements binding upon Latvia”. ... 11.1. In accordance with the former wording of Article 4 of the Transitional Provisions, after 1 January 2005 the rent for an apartment shall be determined by written agreement between the tenant and the owner, and shall include a portion of the building’s management expenses ... but if no agreement has been reached, it shall be determined by the owner. In their turn, the 2004 amendments... not only set the statutory rent limits for 2005, 2006 and 2007 but also stipulate that in cases where rent is not determined by a written agreement between the parties, the owner shall determine it (including a portion of the building’s management expenses proportional to the area rented, and profit). ... 11.2. ... K. Torgāns points out that section 13 of the Law on Residential Tenancies provides for a written agreement between the tenant and the owner and the settlement of disputes in court as a general rule. If the statutory rent limits had not been extended until 2007, the number of disputes to be reviewed in the courts would have increased and the outcome would depend on the assessment of the reasons and financial justification for the rent increase. ... 11.3. During the hearing the applicants expressed their view that if the legislator had not adopted the 2004 amendments, they would have been able to agree on a reasonable rent, and if no agreement with the tenant could be reached, the dispute would have had to be reviewed in court. ... 15.3. ... As has been found before, courts of general jurisdiction could review the reasonableness of the rents charged by landlords. The Parliament’s submission that the 2004 amendments are necessary to avert large-scale evictions of tenants is not substantiated. Even if they had not been adopted the relevant provisions of section 13 of the Laws on Residential Properties, the Denationalisation of Real Estate and the Return of Real Estate to the Legitimate Owners, as well as Cabinet Regulation no. 45 (2002) on methods for the calculation of the management expenses included in the rent for residential space would be binding on the owner. Even though there have been attempts to charge unreasonably high rent, there is no basis for concern as the owner alone cannot fix the rent without the tenant’s agreement. ... 17.2. ... The lease agreements had been drawn up with the tenants in the days when the rent was determined administratively and not by agreement between the parties... 17.3. ... Thus the legislator considered the fixing of rents by an administrative procedure as a temporary or transitional measure characteristic of property reform. In the above circumstances the State took on responsibility for regulating relations between owners and tenants by setting statutory rent limits. The duty of the State when setting those limits was to strike a fair balance between the rights of the owners and the tenants while duly observing the principles of the rule of law and the fundamental rights enshrined in the Constitution. 17.4. At the beginning of the property reform the legislator had placed several restrictions on landlords which followed on from the commitments made by the former managers of the buildings. At the same time the law gave reason to believe that these restrictions would eventually be lifted. ... The law provided for a seven-year period during which evicting tenants without allocating them another place of residence was prohibited. Owners could legitimately expect that the imposed administrative restrictions, which were necessary at the beginning of the reform, would in due time be abolished in a reasonable way. ... Owners could legitimately expect that the State would, in due course, propose a reasonable solution to the problem. 17.5. ... Neither at the beginning of the property reform, nor during it, did the law anticipate that the tenants would have a special status different from that of [ordinary] tenants once the property reform process had been completed. Initially they were guaranteed the right to lease on the same terms as any other tenants. When the legislature decided to liberalise rents in respect of other tenants, it was made clear that the status of pre-reform tenants regarding rental agreements was temporary. ... Thus, during the property reform pre-reform tenants could not legitimately expect that after the end of the reform process they would continue to have a special status different from other tenants and be able to live in the same apartment forever, paying a considerably lower rent than other persons living in comparable buildings. 17.6. Pre-reform tenants could, however, legitimately expect that the State would protect their rights and, within reasonable limits, provide a gradual transition from rent determined by the authorities to owner-and-tenant relations that would satisfy the interests of both the pre-reform tenants and their landlords. It has to be acknowledged that until 2005 no significant measures were taken to provide support for tenants. ... That the State for many years was not interested in normalising the relationships between the owners of denationalised or returned buildings and their tenants is shown not only by the fact that no financial means were allocated for the implementation of measures during the transitional period but also by the lack of information on the scope of the problem. ... The measures that were undertaken prior to 1 January 2005 were evidently not sufficient to protect the rights of pre-reform tenants. ... Thus the State, by its inaction, has infringed the pre-reform tenants’ right to legal certainty, namely the certainty that they will be able to solve their housing issues in the long term either by concluding reasonable agreements with the owners of the denationalised or returned buildings or by finding another permanent solution. ... However, the said inaction did not provide pre-reform tenants with legal certainty in respect of any specific rights the protection of which would have the effect of restricting the fundamental rights of owners as stated in Article 105 of the Constitution....” 36. The instrument of ratification of the Convention and its Protocols deposited by the Government on 27 June 1997 contains the following reservation: “In accordance with Article 64 [now Article 57] of the Convention for the Protection of Human Rights and Fundamental Freedoms of 1950, the Republic of Latvia declares that the provisions of Article 1 of the First Protocol shall not apply to the laws on property reform which regulate the restoration or compensation to the former owners or their legal heirs of property nationalised, confiscated, collectivised or otherwise unlawfully expropriated during the period of Soviet annexation; and privatisation of collectivised agricultural enterprises, collective fisheries and of State and local self-government owned property. The reservation concerns the Law On Land Reform in the Republic of Latvia Rural Regions (published in Zinotajs [The Bulletin] 1990, No. 49; 1991, No. 41; 1992, No. 6/7; 1992, No. 11/12; 1993, No. 18/19; Latvijas Vestnesis [The Latvian Herald] 1994, No. 137), Law On Privatisation of Agricultural Enterprises and Collective Fisheries (Zinotajs 1991, No. 31; 1992, No. 40/41; 1993, No. 5/6; Latvijas Vestnesis 1995, No. 90; 1996, No. 177), Law On Land Reform in the Republic of Latvia Cities (Zinotajs 1991, No. 49/50; Latvijas Vestnesis 1994, No. 47; 1994, No. 145; 1995, No. 169; 1997, No. 126/127), Law On Land Privatisation in Rural Regions (Zinotajs 1992, No. 32; 1993, No. 18/19; Latvijas Vestnesis 1993, No. 130; 1994, No. 148; 1995, No. 162; 1996, No. 111; 1996, No. 225), Law On Privatisation of Property in Agroservice Enterprises (Zinotajs 1993, No. 14), Law On Privatisation Certificates (Latvijas Vestnesis 1995, No. 52), Law On the Privatisation of Objects of State and Municipal Property (Latvijas Vestnesis 1994, No. 27; 1994, No. 77; 1996, No. 192; 1997, No. 16/17/18/19/20/21), Law On Privatisation of Co-operative Apartments (Zinotajs 1991, No. 51; Latvijas Vestnesis 1995, No. 135), Law On the Privatisation of State and Local Self-Government Apartment Houses (Latvijas Vestnesis 1995, No. 103; 1996, No. 149; 1996, No. 223), Law On Denationalisation of Real Estate in the Republic of Latvia (1991, No. 46; Latvijas Vestnesis 1994, No. 42; 1994, No. 90; 1995, No. 137; 1996, No. 219/220), Law On the Return of Real Estate to the Legitimate Owners (Zinotajs 1991, No. 46; Latvijas Vestnesis 1994, No. 42; 1996, No. 97) and their wording being in force at the moment the Law On Ratification entered into force.”