Restitution claims – time for verification

UNDER THE NEW ENACTED LAW, THE ACCURACY OF RESTITUTION DECISIONS WILL BE VERIFIED. WILL IT HELP TO FINALLY REMOVE THE FORMER IRREGULARITIES OR WILL IT CREATE NEW ONES? Kamil Osiński, Advocate, Partner, Head of Real Estate at Kochański Zięba & Partners Despite the passing of a substantial period of time since World War II, restitution claims still remain a controversial matter, not only from a strictly legal point of view but also on the basis of social-economic relations, having a significant impact on the real estate investment market in Poland. In addition, public opinion has recently been swayed by some examples of irregularities concerning restitution claims. In many cases the true beneficiaries of a number of laws adjusting the “old” legislation to the new constitutional norms, which equipped the former owners and their legal successors with legal instruments allowing them to effectively assert their rights, are the “professional” entities that handle restitution claims. Consequently, some of the real properties were probably returned, or compensation provided to their supposed original owners for, in what would be considered, doubtful circumstances or in violation of the law. Due to the above, at the beginning of this year, Polish Parliament enacted a special Act on the specific rules of removal of the legal effects of restitution decisions concerning Warsaw real properties issued in violation of the law¹. On the basis of the Act, a special Government Commission will be entitled to verify the accuracy of restitution cases conducted over the last 20 years in Warsaw. The Commission, in particular will be entitled to:

• Issue administrative decisions (as a collective body);
• Turn to the public administrative authorities for information, explanations and files of each administrative proceeding regarding restitution claims;
• Turn to a prosecutor to secure evidence or a refund of the equivalent of the undue performance;
• Initiate proceeding ex officio;
• Enter a caution in the land and mortgage register kept for a particular real property stating that a proceeding before the Commission has been imitated;
• Establish a restriction on the sale of the real property.

In addition to the above, proceedings before the Commission will take precedent over other proceedings, run before public administrative authorities or even the Supreme Court, which will be subsequently suspended. As a result of the proceedings, the Commission will: (a) uphold the restitution decision; (b) revoke the restitution decision in whole or in part and rule as to its merits; (c) revoke the restitution decision in whole and refer the case back for rehearing or (d) state that the decision was issued in violation of the law if the restitution decision created irreversible legal effects. With regards to the latter, the Commission will oblige the beneficiary of the restitution decision to refund undue performance calculated on the basis of prices from the date of issuance of the decision by the Commission, with consideration of the factual status of the real property from the date that it was taken over. The general sentiment in the market is that no one doubts that some solutions aimed at verification of the accuracy of restitution decisions should be provided. However, there are serious concerns as to whether the current existing instruments provided in the Administrative Procedure Code and Civil Code could be deemed as unsatisfactory and should be replaced with a separate act. Moreover, the actions undertaken by the Commission will have a significant influence on the principal rule of the administrative proceeding, i.e. reliability of the administrative decision. As a result, despite the fact that the main aim of the Act may be considered justified, the provided solutions, the broad competences of the Commission, and the fact that the Commission will be political in nature, may create additional threats and exacerbate the risks involved in restitution matters.   ¹ Polish: Ustawa o szczególnych zasadach usuwania skutków prawnych decyzji reprywatyzacyjnych dotyczących nieruchomości warszawskich wydanych z naruszeniem prawa (Parlimentary Printed Matter No. 1056).