Poznan buildings by Christofer John SSF (Flickr)
RECOVERY OF TITLE OR FINANCIAL COMPENSATION?
Q. What are alternative
ways to claim asset restitution in Poland?
A. It should be emphasized
that, whatever legislation has been enacted in some other countries of
Europe, Poland does not have a general property restitution law. That
is, Poland does not have a law that — without the applicants facing
contestation — returns to them private property that was nationalized
or expropriated (collectively “expropriated”)
or that — without contestation — pays applicants indemnification
for expropriated property.
“Private property” refers to property that, before expropriation, was
owned by individuals
companies. Poland has a general property restitution law concerning
was owned by religious communities and certain other non-profit
organizations. Such “Communal Property” was already restitute or is now
being restituted (without contestation of the correctness of
expropriation, as long as
Communal ownership is proven).
A few years ago, restitution
via Project HEART was the
great hope of heirs of Polish Jews, whose properties were
expropriated in Poland. But sometime in 2013, Project HEART stopped
claims and in 2016 informed us that it has given up on
obtaining restitution for individual
to obtain restitution for a nationalized
expropriated property in Poland is to file an individual legal demand,
on the grounds of specific material defects in the expropriation
laws or procedures, via which a specific property
was taken. The need to file an individual
legal demand is a fact of life.
during the Communist era, which are now myths,
today in many cases recovery is possible.
In fact, since the fall of
Communism in 1989 tens of
claimants obtained restitution by taking legal steps. This has worked
a great number of claimants,
because during the Communist period material defects in expropriation
procedures were fairly common. The carelessness of officials of that
era had many roots, one of them was the arrogance of those who (then)
had absolute power.
Q. Should one aim to
recover the property itself or financial compensation for it?
A. It depends, and sometimes making the best choice is not easy.
Due to the devastation
caused by WW2 and subsequent developments during the Communist era, in
instances the pre-WW2 building is gone, and the government,
or a new private owner, erected new buildings on the lot. Also,
the property may have been an empty lot when it was owned by the
situations, the pre-war owner (nowadays, more often the heir), has a
claim to the
land but not to the building, for the construction of which someone
else paid. In
such situations one can claim the rights to the land, a so-called
lease” (for 99 years)
or one can claim compensation.
In some cases, the
owner of the new building wants to buy the land rights from the heirs
who recovered them, instead
of paying to them rent for the land. He can then redevelop the
property, for instance
erecting condo buildings on it.
In such situations, the
decision (whether to claim land rights or compensation) will depend on
various factors, particularly on what is the
of the land at issue.
Under Polish law, compensation should be at fair market value. However,
the determination of what is fair market value takes time and can be
especially when the government is involved. For this reason, when the
building still stands and is still owned by the government, then very
is more efficient to take title back and monetize the property on
In fact, it
is not uncommon for
a municipal government to
management of expropriated properties which it knows it may have to
For instance, the administrators hired by municipalities allow “social
and sometimes even companies, to pay negligible rents (insufficient to
basic renovations) for premises in heritage-designated areas near city
locations are in high demand by parties who are willing
to pay rent at market value (such as high-end stores and professional
In such cases of management neglect, change of management and a few
other strategic changes made after the recovery of title can greatly
property’s value. Sometimes we get involved in such work.
In a few cases in which we are involved in (one of them concerns
we recovered in November 2015), the client wishes to develop some of
properties that are large neglected lots near the center of a medium
Q. What types of rights can an
A. It depends, but in general an heir can
claim the title to the property, plus net profit arrears for the last
In some cases, a claim for net profit
arrears is particularly difficult to evaluate. In such cases we use
the property was taken by the government for public use, how
does this affect our approach to monetization?
A. Such situations are not infrequent in parts of
Poland; especially in Warsaw and Łódź. In such situations, it is often
more expedient to claim financial compensation, in order to
further delays in monetization.
Warsaw by Night, panorama By Michal Osmenda of Brussels, Belgium,