Legal Eye: Patchwork compromise

The re-privatization of real estate grabbed from its owners both during and after World War II is a case in point.

Since Poland's transition to a free-market economy, no government has found itself able to deal with the complex issues resulting from the nationalization of real estate. Occupying forces made wholesale land-grabs in World War II, but the communist regime readily employed nationalization of real estate through 1962. In 2007, Poland has not yet exorcised these historical ghosts once and for all. Since 1989, it has only managed to piece together a few compromises to address portions of the re-privatization claims. 

Repatriation claims

One area in which Poland has been forced to address a group of claims as a whole is the Zabużańskie (beyond the Bug river) claims. These relate to Poles forced to leave their property in what is now Belarus, Ukraine and Lithuania when Poland's borders were shifted west after World War II. 

These claims are based on a specific historical obligation. In 1944, the communist-backed authorities of the countries affected by the border shift signed a "Republic Treaty." In this Treaty, Poland obligated itself to compensate Poles removed from their lands and into the re-drawn Poland (euphemistically hailed as repatriation). Most repatriates received compensation in the 40s and 50s, but it is estimated that some 80,000 did not.

Poland attempted to create a legislative compromise to the remaining claims in 2003. That law provided for compensation of 15 percent of property value, with an upper limit of zł.50,000. The Constitutional Tribunal struck down the upper limit as unconstitutional. In 2005, a new law provided for compensation of 20 percent.

Warsaw puzzle

With most of the city destroyed during World War II and the subsequent nationalization of most of its land in 1945, Warsaw presents a thorny problem. The nationalized Warsaw real estate was transferred to the Warsaw city authorities. To this day, the restitution of property or the payment of compensation for property in Warsaw is handled on a case-by-case basis by the Warsaw city authorities.

Attempted solutions

In 1999 the government attempted to devise a wholesale solution to the re-privatization claims. The compromise proposed would have provided compensation, in cash or kind, on an average of 10 percent of the value of nationalized real estate. In the end, the Sejm rejected this draft bill.

In 2005, the then-Prime Minister, Marek Belka, presented a draft of a bill to regulate all re-privatization real estate claims, other than the Warsaw and Zabużańskie claims. Until recently this draft languished in the Sejm. It sweetens the pot for former landowners and heirs by proposing payment of 15 percent of the value of the nationalized property. It does not, however, allow for return of the property. If this compromise can be reached, the compensation would be paid out of funds gathered, for example, during the privatization of state-owned companies and the sale and lease of state-owned land. If this is not sufficient (and it looks like it would not be), the remaining sums would be covered by loans from - you guessed it - the state budget.

Compromise is not always easy or pleasant, but it seems a better alternative than further procrastination.

Judith Gliniecki is a partner with Rymar and Partners; j.gliniecki@rymar.pl