Sleepers awake! | In Principle

In February 2017, the first notices began to appear in nationwide Polish newspapers and on the City of Warsaw website summoning legal successors of former owners of Warsaw properties to appear in reprivatisation proceedings and prove their rights—or the proceedings will be discontinued.

The announcements are the result of entry into force on 17 September 2016 of the “Small Reprivatisation Act” (the Act of 25 June 2015 Amending the Real Estate Administration Act and the Family and Guardianship Code).

The amendment added a new Art. 214b to the Real Estate Administration Act, supplementing the regulations in the act concerning land in Warsaw covered by the Decree on Ownership and Usufruct of Land in Warsaw of 26 October 1945 (popularly known as the “Warsaw Decree”).

Genesis of Art. 214b

When the Warsaw Decree entered into force, all land in Warsaw passed to the ownership of the municipality. Art. 7(1) of the decree awarded the previous owner, the owner’s legal successors in possession of the land, or legal persons representing the owner, as well as usufructuaries of the land (in the case of land delivered to another person for administration and usufruct under applicable law) the right to submit an application, within six months after the municipality took possession of the land, for establishment of the right to perpetual tenancy at a token rent or the right to build on the land for a token fee (currently the right of perpetual usufruct).

Due to the convoluted post-war fate of the former owners and their legal successors, as well as well as years of neglect by the communist-era authorities, many applications for usufruct filed in the 1940s have never been decided to this day. This means that the legal status of many Warsaw properties remains unresolved and uncertain.

When can proceedings be discontinued?

The newly introduced Art. 214b of the Real Estate Administration Act provides for discontinuance of proceedings that were commenced but uncompleted if the only document filed in the case was an application under the Warsaw Decree and currently the proceeding cannot be continued because the parties or their addresses cannot be determined.

Discontinuance of proceedings by the authority currently responsible for consideration of Warsaw Decree applications, the Mayor of Warsaw, will not occur automatically. If there are grounds for discontinuing the proceeding, the mayor will have to summon the applicant or any legal successors to participate in the decree proceeding. The summons is made through an announcement containing:

• The applicant’s name and address last known to the authority
• Information about the application that was filed
• An indication of the real estate covered by the proceeding, and
• A summons to the applicant or legal successors to appear and prove their rights to the property, under pain of discontinuance of the proceeding.

The notice must be published in a daily newspaper with nationwide circulation, and also in a local press title that covers the place of the applicant’s last known address. The notice must also be displayed for 30 days on the website of the relevant public authority.

From the time of publication of the notice, interested parties will have six months to announce their participation in the proceeding, and then they will have another three months to indicate their own address and demonstrate their rights to the real estate.

If these deadlines are not met, the authority will issue a decision discontinuing the proceeding. Under Art. 214b(5) of the act, a decision discontinuing the proceeding will provide grounds for disclosing the right of ownership of the real estate by the State Treasury or territorial governmental unit in the land and mortgage register for the building and units in the building as separate pieces of property, and closing the land and mortgage register.

Discontinuance of the proceeding initiated by an application under Art. 7(1) of the decree bars the legal successors of the former owners from pursuing return of the lost property or compensation under the decree procedure. They will still be able to seek damages as provided in Art. 215 of the Real Estate Administration Act, but that provision applies only to applicants who meet the criteria set forth in that article.

Art. 214b is constitutional

Introduction of Art. 214b of the Real Estate Administration Act pursuant to Art. 1(3) of the amending act was examined by the Constitutional Tribunal for compliance with Art. 64(1)–(2) in connection with Art. 31(3) and Art. 2 of the Polish Constitution. It was asserted first and foremost that the proposed regulation violated fundamental principles of administrative procedure, creating mechanisms for once again expropriating the former owners and their legal successors without compensation, and also making decisions discontinuing proceedings—not in themselves giving rise to ownership rights on the part of public entities—grounds for disclosing the rights of these public entities in the land and mortgage register. But in its judgment of 19 July 2016 (Case Kp 3/15), the Constitutional Tribunal upheld the constitutionality of Art. 214b.

Announcements in practice

The first announcements published under Art. 214b (2) and (4) of the act, with respect to over 40 Warsaw properties, appeared in the print press and on the website of the City of Warsaw on 22 February 2017—in Polish and English, although the act does not require publication in any foreign language. With publication of the notices, the first of the periods provided in Art. 214b(2) for applicants and their legal successors—the six-month period for announcing their participation in the decree proceeding—began to run, and will expire on 22 August 2017. Interested persons should therefore systematically track press publications in order to comply with the deadlines imposed by law.

But it can already be stated that because of the short time provided to assert rights to the property and the fact that the heirs of the former owners are scattered all over the world, in many instances it will not be feasible to meet the requirements set forth in Art. 214b of the Real Estate Administration Act, and consequently many remaining Warsaw Decree proceedings will be discontinued.

Barbara Majewska, Real Estate, Reprivatisation and Private Client practices, Wardyński & Partners