More than 70 years ago the communist authorities in Warsaw issued the so-called Bierut decree (October 1945) that legalised the confiscation of plots of private land in the capital (stating also that compensation was applicable, although in practice this never occurred). The decree was issued in order to facilitate the reconstruction of the capital but, as a matter of fact, it was used to confiscate Warsaw private property by the new government. As a result of the Bierut decree, some 40,000 properties were confiscated which constituted approximately 94% of the Warsaw properties. Officially, the dispossessed ex-owners of the confiscated properties were supposed to obtain another property in another location provided that they made an application within 6 month from the announcement of the decree. In practice, all these applications were refused.
Although the decree was an example of brutal lawlessness and showed the thuggish side of the communists - it has been honoured for all these years and it is still in power today.
The legacy of the Bierut decree is overwhelming. Ownership problems are giving the city and investors a headache.
The heirs of pre-war owners of Warsaw properties are now coming forward in increasing numbers to reclaim their former properties and in many instances their claims are fully legitimate. The procedure to recover the property is lengthy and time-consuming but those who can proof the family links to the pre-war owners and those who can present appropriate inheritance documents are certain to get the property back. Typically, the City of Warsaw is ready to give the property back without any objections. But the process is slow and the legal status of the Warsaw properties is still far from being clear.
As the law currently stands, the issue of restitution claims in Warsaw is a significant element of the property investment process. This results from the fact that there are no statutory deadlines that would limit the possibility of pursuing such claims. Thus a legal analysis is made for practically every project in Warsaw in order to assess the risks of existing or potential claims.
For 25 years Poland has been waiting for the law on the property restitution to be passed. Now the time is really high.
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