Despite reprivatization scandal in Warsaw, a ‘window of opportunity’ for recovering the property remains open

Despite the reprivatizationscandal which has been recently revealed in Warsaw and despite the suspension of most proceedings concerning the return of properties,still there is a chance for an effective struggle for the return of confiscated Warsaw property. However, this ‘window of opportunity’ will not last long. If no motion for recovering the property is filed by 17 March 2017, the claims will expire without compensation.

After the destruction of Warsaw during the Second World War, the newly formed communist authorities issued on 26 October 1945 a decree on the ownership and the use of land in Warsaw, upon which nearly all land was taken over by the State. This decree is commonly called the “Bierut’s decree”, after the president of the communist authorities.

In the days of stalinization of half of Europe, a decision to nationalize all the land in a city was nothing out of the ordinary. While all of Poland has sustained a major damage when it comes to property, only in Warsaw nearly all the land within the city borders was seized by the State. The official reasoning for this decision was to facilitate the reconstruction of Warsaw, which was partially true.

Theoretically, previous owners were entitled, within 6 months, to file a motion for granting temporary ownership over the seized property under Article 7 of Bierut’s decree. In practice, those motions were always denied.

Despite Poland’s transformation in 1989 and the end of communist rule, Bierut’s decree remained in force. Only recently it was amended by the new law which is coming into force on 17 September 2016.

Until recently, the interpretation of Bierut’s decree by the current Warsaw authorities has been very favourable for the pre-war owners. The relevant provision of Article 7 of Bierut’s decree has been interpreted in such a way that it obliges the Warsaw authorities to grant temporary ownership to the applicant, if it was in conformity with the use of the land stipulated in the area development plan. Until recently, this meant that the pre-war owners (or their heirs) were entitled to receive the property back, unless the municipality sold it to a bona fide buyer.

But the situationchanged drastically when the new rules came into force on 17 September 2016 and when the ‘reprivatization’ scandal was revealed. It turned out that the return of properties in Warsaw developed into a very lucrative illegal restitution business based on forgery of documents and fabrication of claims.

The new rules introduced many changes. Two points seem to be of paramount importance for the rightful heirs of pre-war owners:
 

• excluding the right to get the property back in kindwhen it has been already sold, used for a public purpose or rebuilt with public resources if the building was damaged in more than 66%

and
 

• setting the 6 months’ deadline for the potential heirs to file their claims with Warsaw municipality

It is believed that the new rules will also stop the criminal activity concerning forgery of documents and fabrication of claims.

The recently revealed scandal poses a serious threat to the rights of the rightful heirs. Due to a series of irregularities in property restitution, where forgers have unlawfully acquired ownership of prestigious real estate in Warsaw, the Warsaw municipality decided to “freeze” all proceedings. The mayor said the city will only start returning properties once the country has passed legislation regulating how the process is supposed to work.

“We’ve been dealing with re-privatization for a long time,” she said. “I’ve been asking that this burden be lifted from us for a long time. However, there hasn’t been a re-privatization law for 25 years.”

The governing party, the Law and Justice (PIS), is also an opponent of the restitution idea.

Therefore, the prospects of recovering the property by the rightful heirs in the nearby future do not look rosy. It is hard to say what will happen and what will be the attitude of the Warsaw municipality towards this issue.

What should be done in these circumstances? In business, like in sport, you have to take advantage of the opportunity, otherwise you are out. This is exactly how the things stand in Warsaw now. There is a‘window of opportunity’ (a very short one and maybe the last one) which must be used, otherwise you are out. However small the chance might be,it should be taken.

Everybody who potentially is the rightful heir of a pre-war owner of real estate in Warsaw has now 6 months to file his documents with the Warsaw authorities and claim the property back. Without filing a claim by 17 March 2017,the chances for recovering the property will be significantly reduced or even may expire without any compensation.