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Alex Wolf

&

Associates

LLC

Recovery of Nationalized and Expropriated Property in Poland

Contact:  Alex Wolf                e-mail:  awolf@alex-wolf.com                Telephone:  302-351-6200

Kielce, Sienkiewicza Street in winter
Kielce, Sienkiewicza Street in winter by Miky at pl.wikipedia via Wikimedia Commonsclick to view license







MONETIZING / SELLING RECOVERED PROPERTY

Q. What can be done with a recovered property in Poland?
A. Once the property is recovered, it is owned by heirs and their title is marketable. Their monetizing options are similar to those in America and other western countries.

Most foreign owners sell the properties they recover in Poland. A minority holds them —  for income and /or further appreciation of value.

Over the last 10 years or so, we have observed that some heirs develop the properties they recover, typically by building on them a number of individual homes, apartment buildings, or even high-rises. They generally work in partnership with local developers. The real estate market in Poland is lively.

Recently, a few foreign heirs asked us to make development arrangements for them, in order to maximize their monetization.

Q. Can the sale proceeds or income be transferred outside Poland?
A. Naturally. Communism ended in Poland in 1989, long ago. Nowadays, Polish currency, the zloty (symbol PLN or ZŁ) is fully convertible and there are no restrictions on transfer of funds out of the country.

Just as Polish residents, foreigners are subject taxes on inheritance and income derived from Poland. Taxes in Poland are moderate. This is another matter. See Tax Issues.

Q. Who arranges the monetization of the recovered rights?
A. This can be done in different ways. Most of the time, our compensation includes a significant contingent component (in some cases, the bulk of our fees) payable upon monetization. In such situations, as a rule, our responsibilities comprise the recovery and the monetization of properties — i.e. a sale at a reasonable price or, when applicable, the obtaining of reasonable Indemnification from governmental bodies.

However, we are busy enough and do not mind if the client makes his own monetization arrangements, provided we are promptly paid our contingent fee in full.

Q. How important are monetization arrangements?
A. They are very important. The following are only some of the elements of paramount importance in monetization arrangements:

  • In many situations several heirs inherit shares in the same assets (“joint heirs”). In this context it is important to note that generally, one obtains better prices by selling the entire property or a majority interest in it, as compared with selling only a minority interest.
  • For this reason, when we work for joint heirs, we require them to act in concert with each other, including at monetization.
  • We have come across cases in which foreign heirs (and elderly heirs living in Poland) received only a small fraction of the realizable value (in one extreme case less than 10% but often around one-third), because, without any verification or control, they entrusted monetizing transaction to persons unworthy of trust.
  • We, however, inform heirs in writing of true market values, provide general transparency and ultimate-seller-control for all monetizing transactions.
  • It should be noted that Polish law allows intermediaries, such as realtors, to receive commission from both the seller and the buyer. In situations involving a foreign seller, some intermediaries view the foreign seller as the proverbial “absentee owner” and quietly team up with local buyers to arrange sales at unreasonably low prices.
  • When we are involved, we do not allow this.

Q. What should the selling price be?
A. The sale price should be at market value. When Indemnification is accepted from the government, it should also be at market value, or at the going rate for Indemnifications paid for similar properties in the relevant area.

Q. How do we ensure that our clients receive reasonable prices or reasonable Indemnification?
A. We do this via a number of measures, which we incorporate into our Agreements.

Most importantly, we align our interests completely with the heirs — our clients.

In our Agreements we commit not to receive remuneration other than that specified in these Agreement. We provide heirs with written information on market prices and Indemnification rates prior to recommending how they should respond to offers received. We encourage and assist heirs to obtain additional appraisals, if they wish.

When we work with Polish realtors we make sure they receive a motivating commission, but do not allow them to receive a remuneration from other parties in relevant transactions

Under our Agreements, the heirs retain control over the sale or acceptance of the Indemnification and the transfer of their recovered rights is made only against full payment in cash.


View on the Wawel Hill in Krakow. View from Wawel Hill, Krakow,
by Jakub Hałun (Own Work), Krakow, Poland, via Wikimedia Commons, click to view license

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