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Manor houses and decrees

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The lack of reprivatisation legislation has made the restitution of property a chaotic procedure. The losers include not only the rightful owners and the state, but also thousands of tenants living in nationalised buildings.

There have been over a dozen draft proposals. Some were brought to a standstill in parliamentary committees, three were voted down and one was vetoed by the president. In a nutshell, this is the story of Poland's reprivatisation attempts. The present government had proposed paying for nationalised property in 2012, but in March 2011 the Treasury halted work on the draft. PLN 20 billion in compensation would increase the public debt and exceed the 60% precautionary threshold.

Although 13% of Poland's citizens sustained losses as a result of nationalisation carried out by the communist authorities, Poland is the only country among the new EU members and one of four in the region (the others being Belarus, Ukraine and Albania) that have not carried out reprivatisation following the transition to democracy. When in the early 1990s owners began reclaiming their property in Czechoslovakia, Bulgaria and the Baltic States, and Hungary was issuing special bonds for them, Poland only managed to regulate the restitution of trade-union and church property.

Return or substitute

From that time, the chances for former owners to regain their property have dwindled year on year. Not only have successive governments over the past two decades refused or been unable to pass the relevant regulations, but a changing approach to property restitution can clearly be seen in successive drafts. The 2001 law vetoed by Aleksander Kwaśniewski envisaged the State Treasury returning confiscated property to its rightful owners. Where impossible, former owners were to receive reprivatisation vouchers equivalent to half the value of the nationalised property.

However, the draft abandoned two years ago made no mention of reprivatisation. Instead, it referred only to ‘alleviating the wrongs suffered as a result of nationalisation measures’ for which ‘monetary benefits’ were to be provided. The decrees of the postwar communist-controlled Polish National Liberation Committee and the measures adopted by the parliament of the People’s Republic of Poland were to remain in effect. Former owners were to receive compensation only if the communist authorities had nationalised property in violation of their own regulations. These regulations were often insulting to an elementary sense of justice. The government did not intend to return a set amount of the property's value to its rightful owners, but wanted to earmark PLN 20 billion for that purpose to be distributed among former owners. Compensation amount would depend on the number of claims filed and would be strictly symbolic.

‘Back in the 1990s, when the initial draft privatisation proposals were being worked on, it was obvious to everyone that the property should be returned in kind,’ explained Marcin Schirmer, vice-president of the Polish Landowners Society. ‘Since then, there has been a clearly visible tendency. The authors of successive drafts have moved away from restitution-in-kind in favour of monetary compensation, and each successive draft envisaged increasingly smaller damages.’

Why do successive governments want to return an increasingly diminished share of nationalised property to its former owners? ‘Unfortunately, that is the normal course of events,’ comments Professor Włodzimierz Pańkow, a sociologist at Koźminski University in Warsaw. At stake are the interests of hundreds of thousands of new owners, who after 1989 took possession of property previously nationalised by the communists. Often members of the former communist party authorities were enfranchised in this way. Today, in most cases privatisation no longer involves actual restitution of nationalised property, since beginning in the early 1990s the state has managed to sell off a large share of nationalised assets.

Most economists and sociologists agree that the abandonment of reprivatisation has adversely affected the Polish economy. A middle class has begun to emerge with great difficulty. The rural areas where nationalised property has going to ruin have lost out. And the lack of clear regulations is troublesome for tenants living in buildings being restored to their former owners. Do rightful owners still have any chance of regaining their property? Marcin Schirmer has not lost all hope. “At present, the Agricultural Property Agency has at its disposal nearly two million hectares of land, mainly in what are known as the recovered territories. Today, most of the land taken over by the communists can no longer be returned, but substitutional reprivatisation could be carried out if the political will existed.

Bierut lives on

The problems behind the lack of reprivatisation legislation can best be understood through the example of Warsaw. In 1945, communist leader Bolesław Bierut decreed that all pre-war property within Warsaw's city limits was to become city-owned. These regulations encompassed more than 90% of the capital’s real estate. Owing to Warsaw's exceptional situation in the country, there were repeated plans to regulate the question of property restitution in the capital by means of separate legislation. Last year, parliamentarians from the governing Civic Platform party pledged that applicable draft legislation would be ready by early 2013. But there is no guarantee that these promises will be kept. ‘Work on the new regulations is underway but proceeding are rather slow,’ daily Rzeczpospolita was told by Ligia Krajewska, the Civic Platform MP who heads the group working on the bill. ‘The matter is extremely complicated, and we are regularly consulting with legal experts. Perhaps work will move forward next year.’ When will the bill be ready? ‘That may take a year or two, maybe three,’ Krajewska adds. ‘It is difficult to predict at this stage, but we are not abandoning our work on the new regulations.’

The lack of legal regulations means that former owners can and are attempting to seek justice on their own. The value of property confiscated after the war is now estimated at some PLN 40 billion. Specialist firms involved in consolidating claims and recovering real estate have been established. There is also much to indicate that reprivatisation in Warsaw has taken on more ominous forms. Business magazine Puls Biznesu has established that there are at least several groups in Warsaw specialising in making money on privatisation. It reports that members of these groups are consolidating claims to a small fraction of the real estate's value and subsequently, thanks to ‘nonstandard good relations with officials’, quickly recover the property.

‘Extremely alarming things that have little to do with righting historical wrongs are taking place in Warsaw,’ Aleksander Grabiński, president of the Association of People Affected by the Warsaw Decree, told Rzeczpospolita. ‘Many owners who often have excellent lawyers are unable to recover their property for years on end. But the moment they sell their claims to private firms, it soon turns out that the real estate can be quickly recovered,’ Grabiński says. He cited the example of Warsaw's Blue Palace, which Jan Zamoyski had sought for years to reclaim. ‘Discouraged by endless procedures, he sold his claims and a private investor recovered the Palace within several weeks.’

Each year, dozens of Warsaw tenements experience a similar fate. Tenants' organisations are up in arms, because the housing being reclaimed by private firms is occupied by tenants who had been granted council flats after the war. ‘The firms reclaiming tenements want to transform them into luxury apartments or tear them down and build new structures in their place,’ said Anna Kutyńska of the Warsaw Tenants’ Defence Committee. They use every trick in the book to force tenants, often elderly people who are unaware of the legislation, to move,’ she explains. ‘In theory, these tenants are protected by the law. In practice, however, there are many ways of circumventing it. A standard practice is to begin prolonged, make-believe renovations involving numerous hardships such as disconnecting the electricity, water and gas. It is sufficient to sit back and wait until the tenants are unable to put up with such conditions and begin moving out on their own. “Unknown assailants” are brought in to deal with those who still refuse.’ Since Warsaw is short of housing, the displaced tenants often have nowhere to go.

Cashing in on other peoples’ misfortunes

How can the problems of Poland's capital be solved? Members of the Association of People Affected by the Warsaw Decree maintain that no new legislation is needed to restore most real estate to its rightful owners. ‘Existing measures regulating property issues clearly state that real estate taken over by city authorities should be returned to its former owner if it has not been put to the (city’s) intended use within seven years of the take-over,’ said Ryszard Grzesiula, a lawyer and the Association's vice-president. Its members have long been appealing the matter to the prime minister, president, MPs, senators and Warsaw city hall. The Decree Association has taken note of the problem of tenants evicted by private firms, and Grzesiula is proposing a solution: ‘The city council could be doing the same thing that private firms are. Many members of our association would forego their claims towards the council in exchange for a small proportion of the value of their real estate or a modest life annuity,’ he explains. Subsequently, real estate in good locations could be sold to developers for a fraction of its true value on condition that they build housing that includes council flats, so the displaced tenants would have a place to move. We have proposed that solution to the municipal authorities, but nobody even wanted to discuss it.

A lack of interest on the part of politicians is the most serious charge levelled by organisations of former property owners. The real estate taken over by the state after the war is sold on the free market or is falling into disrepair. It has been estimated that in 1939 there were some 20,000 manor houses and palaces in Poland. After nationalisation, many of these were deliberately destroyed as part of the communist regime's anti-landowner campaign. Others are now outside Poland's present borders. Ultimately, a mere 2,000 buildings have survived. In 2010, officials from the Supreme Audit Office verified the condition of the manor-houses and palaces now belonging to the Agricultural Property Agency or local councils. The results of the inspection were unequivocal. The report stated that ‘for the most part the current owners of the inspected historical property have done nothing to renovate destroyed or deteriorating real estate.’ The Supreme Audit Office has therefore recommended ‘regulating reprivatisation issues as soon as possible.’

It appears that the recommendations of Supreme Audit Office officials will remain on paper for quite some time. At present, reprivatisation demands are not included in the manifesto of any political party in parliament. In the meantime, the problems arising from the lack of reprivatisation regulations are growing and it appears that both in Warsaw and nationwide, politicians lack the desire and determination to resolve them. ‘The lack of reprivatisation at the start of the 1990s, in addition to the fact that it was simply unjust and adversely affected the economy, has produced yet another deplorable result,’ explains Professor Pańkow. ‘Among a sizeable portion of society, it entrenched a lack of respect for private property as well as the conviction that a passive state facilitates cashing in on the misfortunes of others.’

 


This article was originally published in a special appendix to Rzeczpospolita daily for the 'Genealogies of Memory' conference on 27 November 2013.
>> Find out more about transitional justice in the 'Genealogies of Memory' conference footage at: genealogies.enrs.eu/multimedia

 

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