Rent controls too tough on landlords, says EU court

"The system imposes a number of restrictions on landlords' rights, in particular, setting a ceiling on rent levels which is so low that landlords cannot even recoup their maintenance costs, let alone make a profit," the court said in a statement. This puts a "disproportionate and excessive burden" on private landlords.

The statement was part of a judgment on a case brought by a Polish-born woman who had returned from France when she inherited a house that had been assigned to tenants by the government after World War Two.

While the court recognized that the acute shortage of housing inherited from the communist regime has meant the state has had to balance "exceptionally difficult and socially sensitive issues," it said there should be a fairer distribution of the costs of transforming the country's housing system.

"That burden could not, as in the applicant's case, be placed on one particular social group, however important the interests of the other group or the community as a whole."

The court noted that the system of rental controls had already been changed by the Polish Constitutional Court to allow landlords greater scope for rent increases but it said there was still a "malfunctioning in Polish legislation."

"Although the Polish government maintained that the rent control scheme no longer existed in Poland, the court reiterated its view that the general situation had not yet been brought into line with European Convention on Human Rights standards," it said. (Reuters)