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A Comparative Legal and Policy Examination
Edited by Padraic Kenna, Sergio Nasarre-Aznar, Peter Sparkes and Christoph U. Schmid
Magdalena Habdas and Grzegorz Panek
In Poland, after privatization and the ensuing lack of public housing, an unbalanced housing policy induced governments to place the social and financial burden of housing low income groups on landlords up to the 1990s. However, the jurisprudence of the European Court of Human Rights has stopped this approach by finding a violation of the owner’s freedom of property. This case law has also had repercussions in neighbouring countries where landlords were exposed to similar problems. It impressively shows the supranational constitutional dimension of commutative justice limiting national legislators. As a reaction, tenancy legislation was deregulated in Poland and its neighbouring countries; and the long-standing fragmentation of the market into privileged and non-privileged rentals as well as the communist legacy of the so-called tenant quasi-ownership were abolished. The new Polish law sets forth detailed provisions on rent setting and rent increase; in particular, the rent must not, as a rule, exceed 3 per cent of the dwelling’s reconstruction value. Shorter time-limited tenancies have been introduced so as to promote the offer of additional dwellings. Despite these reforms, the housing situation in Poland is tense due to a lack of rental dwellings in particular for low income groups.
Elena Bargelli and Ranieri Bianchi
This chapter explores the black market in the private rental sector in Southern European legal systems, with a particular focus on Italy. The black market is an often neglected real world phenomenon constituted by unofficial, informal contracts which violate binding legal rules, in particular public law rules on tax, registration and inhabitability requirements, and are therefore mostly kept secret by the parties. Such secretive and illegal arrangements, which render resort to the courts more difficult, tend to disadvantage the weaker party, typically the tenant. Against this background, the Italian legislator has introduced sanction mechanisms under private law aimed at giving tenants incentives to report black market practices without endangering their own position. However, the mandatory adaptation of the contract to the advantage of the tenant has been declared void by the Italian Constitutional Court. Yet, other sanctions continue to exist: landlords may only enforce written and registered contracts whereas tenants may ask for registration even at a later stage to invoke their rights. Yet these measures presuppose an effective, swift and affordable judicial system trusted by the tenant, which is not fully present in Southern Europe in general and in Italy in particular.
Since the late 1980s private residential tenancy law in the United Kingdom has been premised upon market rents and extremely limited security of tenure. The extent to which these qualities are promoted through the assured shorthold – the default private residential tenancy – marks the United Kingdom out has having one of the most extreme regulatory models in Europe. Even more remarkable is the strong growth in private renting in the United Kingdom during this period. European policy makers, eager to develop private renting, have increasingly turned to the British model as a means of promoting renting in other European countries. Yet just as the model gains popularity abroad, it has come under intense pressure at home which has culminated in root and branch reforms being proposed in the devolved Governments of Scotland and Wales. This chapter seeks to place the assured shorthold regime within a European context before outlining how European reformers have adopted elements of the British model in order to promote renting across Europe. The chapter then goes on to describe the impact which political devolution within the United Kingdom has had on residential tenancy law.
József Hegedüs and Vera Horváth
The role of the private rented sector (PRS) in housing has come to the forefront in the European housing policy debate in recent years, and was further underlined by the Great Financial Crisis and the burst of the housing (credit) bubble. The need to overcome the prevailing home ownership bias in nearly every European housing regime and to support intermediary housing tenure forms besides social housing has become clear in recent decades. Relatively little effort has been put into the study of housing regimes in Central and Eastern Europe (CEE), partly because of the lack of reliable statistical data. Privatization and marketization efforts in the region were vast, radically reducing the social housing sectors in CEE. Despite the clear need for rental housing, PRS remained residual. This chapter sets out to explore the micro-level actors and behaviours that cause the sector’s apparent stagnation, and the macro-level structural factors that explain these behaviours. Our goal is to explain the current state as well as the possible future role of PRS in CEE, but we believe that our findings also apply to the housing environments of other European countries where the expansion of PRS remained unsuccessful in recent years.
Irene Kull and Ave Hussar
The Baltic States, Lithuania, Latvia and Estonia, belonged to the Soviet Union until 1991 and are still struggling with the legacies of Communism. Privatization and restitution measures have produced the highest rate of homeownership in the EU here, ranging between 80 and 90 per cent. The privatized housing stock is often in very bad condition, being composed of many small flats without basic amenities. This contributes to the constant need for new dwellings. However, the more recent reforms have realized, at least as regards the ‘law in the books’, a certain degree of interest balancing and stability of rental tenancies. Yet tenants seem more protected in Lithuania and Latvia than in Estonia. Constitutive regulatory features such as the requirements on form and registration, duration and termination of rental agreements, emptio non tollit locatum as well as social defences in the eviction procedure have been dealt with in the new legislation. That notwithstanding, the low number of tenancy relationships and court cases will certainly delay the development of a more effective tenancy law system.