As stated above, after ascertaining that there has been an interference with the right to property, the European Court of Human Rights usually establishes under which rule of article 1 of Protocol 1 to the ECHR the interference falls to be examined. It assesses whether it amounts to a deprivation of property or has to be considered a control of use (or comes to the conclusion that the case gives rise to too many complex issues to be categorized and examines it in the light of the first sentence of article 1 of Protocol 1 to the ECHR).
Neither the notion ‘deprivation of property’ nor ‘control of use’ are clearly defined. Deprivation means in general that someone is being stripped off his title to a property. However, even an owner who retains title to a property may be deprived of his property. On the other hand, not every measure leading to the owner’s losing his property rights constitutes a deprivation of property (for example, confiscations of assets are usually considered as ‘control of use’).
There are two forms of deprivation of property: The formal deprivation of property and de facto deprivation of property. Formal deprivation means that the owner is by an official act or measure stripped of his property rights.
De facto deprivation of property means that the owner is not formally expropriated, but that his ability to exercise property rights is limited in such a grave way that he factually does not have ownership anymore. The concept was developed by the European Court of Human Rights in the case Sporrong Lonrath v Sweden. The case concerned a permission to expropriate certain plots of land and a ban on construction on these plots. Swedish law as it stood at the relevant time stipulated that the King could issue authorizations for expropriation if a plot was situated in an area which was instrumental to plans for urban development. Local authorities were given a deadline within which they could initiate expropriation procedures; if they failed to do so, the authorization expired. In addition to that, construction bans could be imposed with regard to the relevant plots to avoid their being altered in a way which made then unsuitable for the development. Authorization orders were issued with regard to the applicants’ plots, but no expropriation procedure was initiated. Instead, the local authorities requested an extension of the time line, which was granted. This was repeated several times and the plots were under an authorization to expropriate for more than twenty years. In addition to that, a ban on construction was imposed and on one occasion a building permit requested by the applicants was rejected because of this ban.
The European Court of Human Rights stated that the applicants had not formally been deprived of their property. Yet it pointed out that it was necessary to look behind appearances and to establish whether the measures had de facto deprived of their property. While the Court concluded that this had not been the case, it is established jurisprudence to examine whether a measure de facto deprives the applicant of his property.