Reprivatisation of real estate in Poland
It is still possible to regain property expropriated by the state after the Second World War, and in some cases compensation is awarded instead.
Real estate in Poland was expropriated by the state on a massive scale. This was done by operation of law or through administrative orders, which in most cases were issued in violation of the law in force at that time. Because no law has ever been adopted in Poland regulating in a comprehensive fashion the issue of restoration of property in kind or awarding of compensation for expropriated real estate, reprivatisation continues to be carried out on a case-by-case basis through administrative and judicial proceedings.
After the war, the state seized property belonging to the broadest cross-section of Polish society, including individuals, corporate bodies, churches and other religious institutions. Properties of all sorts in the former German territory of western Poland, known as the “Regained Lands,” were also taken over by the state.
The discussion below addresses several selected procedures for regaining real estate in kind or compensation, depending on the legal basis for expropriation of the property.
Warsaw Decree
Pursuant to the Decree on Ownership and Usufruct of Land in Warsaw of 26 October 1945, popularly known as the “Warsaw Decree,” all land within the borders of Warsaw as of the effective date of the decree passed by operation of law to the ownership of the City of Warsaw, and subsequently the State Treasury. Only title to the land passed by operation of law, and therefore the buildings continued to be owned by the former owners of the land. This was only an interim solution, however, because if the former owner wished to retain ownership of the building and gain rights to the land, the owner was required to file an application to establish the right of perpetual usufruct, and to pay the fee for the application, by a specific deadline. But when these applications were considered, they were ordinarily denied, and thus the ownership of the buildings was also assumed by the state.
Persons who were issued negative decisions may follow the procedure for a declaration of invalidity, obtaining a ruling that the decision was unlawful, and then on the basis of that ruling apply for establishment of perpetual usufruct of the land. If this is not possible because of intervening irreversible legal events, such persons may file suit against the State Treasury for compensation.
Agricultural reform
Pursuant to the Agricultural Reform Decree of the Polish Committee of National Liberation of 6 September 1944, property seized for purposes of agricultural reform included land owned or co-owned by natural or legal persons if the area exceeded 100 hectares in total or 50 hectares of agricultural land. Ownership of such real estate passed in its entirety to the State Treasury, by operation of law, without any compensation.
Under current law, it is possible to regain real estate that was taken under the agricultural reform but not meet the conditions set forth in the decree. This primarily concerns park and palace structures and agricultural property that did not exceed 50 ha.
Currently the province governors rule on applications for a declaration that a specific property did not fall under the operation of the Agricultural Reform Decree. Such a determination provides grounds for taking further legal steps to regain the property in kind or for filing suit against the State Treasury for compensation.
Renovation and Reconstruction Act
Administrative authorities used state funds to conduct thorough renovations of private buildings, or work to secure the condition of such buildings, pursuant to the Act on Renovation, Reconstruction, Completion and Expansion of Buildings of 22 April 1959. To this end, the authorities gave the owner of a building 14 days to file a declaration that the owner would do the construction work himself. If the owner did not file such a declaration, or filed the declaration but failed to conduct the construction work, the costs of the construction work would be borne by the public administration. If the expenditures from public funds exceeded 50% of the value of the building, the administration could assume ownership of the building and the land. Ownership passed in the form of a ruling with compensation.
However, because the valuation of both the construction work and the compensation was conducted to suit the needs of the authorities at that time, the compensation represented only a token of the value of the property lost by the owner. Such properties were taken over in violation of the law in force at the time, and thus it is now possible to regain certain properties in kind or to obtain compensation from the State Treasury.
The properties taken under this act included landmark tenement buildings in historic city centres, particularly in Kraków and Poznań.
State acquisition by prescription
After the Second World War the State Treasury took over privately owned real estate on the basis of nationalisation laws or through outright seizure. In such cases, the State Treasury argues that it obtained title to the real estate by prescription due to the passage of the legal periods for acquisition by prescription (previously 20 years, now 30 years).
The Supreme Court of Poland ruled in an en banc resolution dated 26 October 2007 (Case No. III CZP 30/07), which has the force of a rule of law: “Control by the State Treasury over real estate of another obtained in exercise of public authority could constitute independent possession leading to acquisition by prescription. However, the period for acquisition by prescription did not run if the owner could not effectively seek possession of the real estate.”
Under the law at that time, there were a number of other regulations, beyond those discussed in this article, which provided grounds for the state to take over private property, for example concerning industrial plants, forestry operations and church assets.
Even though reprivatisation has still not been regulated by statute, under current law there are regulations that enable legal measures to be taken to regain expropriated real estate or obtain compensation, despite the passage of time.
Nonetheless, without a statutory solution, there is a large group of former owners of expropriated properties who cannot currently count on receiving either in-kind restitution of their lost property or any financial compensation.
Leszek Zatyka, Reprivatisation Practice, Wardyński & Partners
