1. Asociatia pentru Proprietatea Privata APP
Member of the Union Internationale de la Propriété Immobiličre UIPI
Str. Paul Orleanu 6, 050742 Bucuresti, Româniaa
Fax 0040 21 3364391, e-mail birouapp@gmail.com website: www.a-p-p.ro
APP comments for the UIPI Conference on the SAR study
concerning property restitution in former communist countries
November 2010
Our comments include the following paragraphs:
- remarks concerning the SAR-study
- the ECHR and Romania
- the petition of the tenants having bought abusively confiscated real estate
- conclusion
1. Remarks concerning the SAR-study
o We agree with the remark that restitution legislation in Romania “lacks coherence and unity“, not only because laws were adopted quickly, by different governments with different political positions, as stated in the study, but mainly because of the lack of political will to solve the problem, many politicians having taken possession of most of the valuable confiscated properties, at lowest prices.
o As the project team underlines, “
the compensation system is ineffective“. This has been reiterated by the ECHR in many decisions, including the recent pilot decision concerning the cases Athanasiu, Poenaru and Solon. Therefore the recommendation of the team „the compensation mechanism should become truly effective„ is justified and coincides with the recommendations of the Court.
o The analysis of capacity of the state to pay the promised compensation shows correctly, that the cheaper solution for the state is to restitute as much as possible in kind or in form of compensation with equivalent real estate, while paying to the evicted former tenant compensations, equivalent to the indexed purchase price (index related to the inflation rate or to the evolution of real estate prices). This compensation could eventually be used by the former tenant as an installment for house building. The second alternative for the “former“ owner, compensation by equivalent real estate, presumes that local authorities stop the alienation of confiscated real estate and draw up a genuine inventory of existing real estate. As such actions might reduce the illegal private revenues of many local opposing authorities, these should be supervised by a reliable internal or external authority (at least random-sampling).
o We fully agree with the recommendation , that „In this process, the EU should not limit its assessment to the review of legislation, but should also request concrete action plans with clear benchmarks, budgetary allocations and responsible institutions, once the national governments adopted a law. This coincides with the recommendations of the ECHR and of the Committee of Ministers of the Council of Europe
o The study correctly underlines that Romania has the largest number of judgments finding a violation of property rights: almost ten times more than the second placed, Bulgaria. Romania has also the largest number of applications concerning property restitution pending before the ECHR (about 1.000), which is almost three times more than the second ranked of the six relevant countries, Serbia. The extremely high number of violations of the property right by Romania determined the ECHR to introduce the pilot procedure for this country (8 June 2010) (Study p. 23-24).
o The study does not try to give, even a rough evaluation of confiscated property. Romanian authorities refused up to the pilot procedure to deliver such evaluations, the first figure was given on this occasion, 21 billion Euro. Without such a figures no practicable solution can be proposed.
o The negative effects of Law 1/2009 were not sufficiently described in the study. This law abrogates for example a paragraph of the former law 10/2001, which stipulated that former owners, whose properties had been confiscated without legal title, continue to keep their legal property title. As a consequence of this suppression, dispossessed owners, which up to that moment kept de jure their property title, lost it at the moment this law was issued. This is equivalent to a new property confiscation in a EU country, in which the property right is guaranteed by the Constitution and laws should be consistent with the European Convention. This clause restrains the possibility of legal owners to prove that they posses a good in the sense of art. 1 of the Convention, blocking thus their possibility to suit at the ECHR. The same law confers to the few evicted tenants compensations equivalent to the market price for the lost flat, notwithstanding the fact that they bought it for a price which was in many cases about a hundredth of the market value..
o The optimistic statement in the English summary , “
the restitution of urban property has barely reached half way, again with a major delay in providing compensations“ has been misleadingly formulated. This has been corrected in the following sentence “The prospects are not encouraging because at the current pace the restitution process is likely to be prolonged over several decades. “
o We support entirely the proposal : “ Institutional audits for the central level, Bucharest
City Hall and other lagging institutions are recommended to find pragmatic ways for speeding up the bureaucratic process by eliminating redundant checks and streamlining the procedures. We would add that representatives of the organizations of dispossessed owners, who have a large experience in such problems and know the deficiencies of the system, should be included in these audit teams. This coincides with recommendations of the ECHR in the pilot process.
o One important aspect which, in our opinion has not been sufficiently underlined in the summary paragraph concerning Romania is the way in which the existing legal frame is enforced by the justice and/or by the local authorities. The sentence“the failure of the administration and judiciary to comply with the rules created by this intricate framework and the different interpretation given to the rules triggered a clear reaction from the international organizations Romania adhered to, especially the ECHR“, reflects only partially the causes of this failure. The inconsistent judicial practice and the general lack of legal certainty in justice is caused, besides the complexity and inconsistence of the legal frame, also by corruption and political pressure.
Judges at different levels have been suspended because they were suspected to be
corrupt. Mayors have distributed illegally confiscated real estate
2. The ECHR and Romania
Only a few thousand people out of the hundreds of thousands claimants have succeeded in Romania in recovering ownership of their properties or obtaining compensation. Therefore, many hopeless Romanian dispossessed owners, after having exhausted the internal ways, lodged claims before the European Court of Human Rights (the Court, ECHR) in Strasbourg. According to the report for 2009 of the European Court of Human Rights (the Court, ECHR) in Strasbourg, Romania is the EU member state with the most numerous ECHR convictions. In the chart made in Strasbourg, only Russia and Turkey, states that are not EU members, surpass Romania. Statistics of petitions at the EP show a similar pattern.
Despite more than 122 rulings against Romania in cases of violation of the property right (art. 1 of the 1st Protocol of the Convention), and more than 1.000 cases of this kind still pending, the Romanian authorities did not yet implement the legal measures suggested by the European Court of Human Rights (ECHR, the Court), i.e. to change the legal frame and the compensation procedures, in order to make the procedure established by the laws on compensation for immovable property genuinely consistent, accessible, speedy and foreseeable.
The majority of condemnations treat the violation of the 1st article of the 1st additional Protocol (concerning the Protection of Property) and/or art. 6 (Right to a fair trial) of the Convention for the Protection of Human Rights and Fundamental Freedoms.
The Committee of Ministers of the Council of Europe, which “recalled that the questions raised in these cases concern an important systemic problem, related particularly to the failure to restore or compensate nationalized property sold subsequently by the state to third parties, which it is important to remedy as soon as possible to avoid a large number of new, similar violations” decided to apply the pilot procedure to Romania ;
A pilot case deals with a systemic, structural matter, which tries to show the state – Romania in this case - which are measures to be adopted to solve this matter, which affects a huge number of people
The main aspects of this systemic problem concerning abusively confiscated properties were:
- legal uncertainty, a plethora of inconsistent legislative texts
- inconsistent judicial practice and in a general lack of legal certainty as to the interpretation of the core concepts, in relation to the rights of former owners, the State and third parties who acquired nationalized properties
- long processing times
- contradictory rulings
- non enforcing the decisions of the courts
- an inefficient system of compensation.
The Court decision granted the government and parliament, with the participation of the public opinion, a term of 18 months to take the necessary measures.
The Court choose the requests of Atanasiu, Poenaru and others as pilot cases. The case of Atanasiu and Poenaru (no. 30767/05) mainly concerns the applicants’ inability to obtain access to a court in order to claim ownership of a nationalized flat, and the delay on the part of the administrative authorities in ruling on their restitution request, while Solon (no. 33800/06) relates to the applicant’s inability to obtain compensation under restitution law no. 10/2001 in respect of a nationalized plot of land.
The associations for abusively dispossessed owners APP and ResRo lodged interventions concerning some aspects of these violations.
Razvan Horatiu Radu, the governmental agent of Romania to ECHR wanted to underline that Romania does not want to risk to be expelled from the court because of its numerous violations of the Convention.
The Romanian Prime Minister Emil Boc assured visiting ECHR president Jean-Paul Costa that the government will analyze the impact of this decision in order to identify the optimum solution in line with ECHR recommendations, under consideration of the budget hindrances.
Asked what happens if at the end of the 18 months nothing happens, ECHR President Costa answered: „ It is a pessimistic scenario, I don’t want to believe in it (..) We will have to rejudge the case. I think it would be a failure both for Romania and the Court as the pilot procedure is one which inspires trust” he said.
Meanwhile the Romanian authorities suspended the payments of compensation in cash for the next two years.
3. The petition of the tenants having bought abusively confiscated real estate
This petition is based on following incorrect statements:
- Former tenants, having bought confiscated properties, are discriminated
- The number of such discriminated persons amounts several hundred thousands, in one statement 2.000.000 persons were mentioned
1.While the initial restitution laws and the Civil Code allowed dispossessed owners to suit against the purchase contract of the tenant having bought confiscated flats, this possibility has been suppressed by law 1/2009, issued on the 3rd February 2009.
This law prohibited any type of suit against the buyer, even if the contract did not respect the provisions of the law 112/1995, which governed these transactions. Buying tenants, which have been previously evicted, as a consequence of a lost lawsuit, should be receive from the state budget the equivalent to the market value of the flat. The payment should be performed without delay, while dispossessed owners have to wait years until they receive compensations from the Property Fund, in form of stocks. Cash payments for dispossessed owners have been suspended for the next two years.
This means that dispossessed owners, not buying tenants are negatively discriminated by the present laws.
2. The figures issued by the restitution authority, NARP (romanian ANRP) show that, from about 200.000 claims, only about 16.382 have been restituted in kind. Taking into account that after the publication of the law 1/2009 no buying tenant could be evicted, we can see that the number of concerned tenant petitioners has been exaggerated.
4. Conclusion
The most important conclusions can be derived from the decision in the pilot process (case of Maria Atanasiu and others vs. Romania, applications nos. 30767/05 and 33800/06). We quote some of them:
- Par. 216 (of the decision). The Court observes that it is clear from the present case that the ineffectiveness of the compensation and restitution mechanism continues to pose a recurrent and large-scale problem in Romania. This situation persists in spite of the adoption of the Viasu, Faimblat and Katz judgments, cited above, in which the Court indicated to the Government that general measures were needed in order to guarantee the right to restitution in an effective and rapid manner.
And in par. 228. In view of the large number of problems besetting the restitution and compensation mechanism, which have persisted after the adoption of the Viasu, Faimblat and Katz judgments, the Court considers it imperative that the State take general measures as a matter of urgency capable of guaranteeing in an effective manner the right to restitution or compensation while striking a fair balance between the different interests at stake.
- The Government representative mentioned the intended correction measures, from which we quote the most important ones:
– Par. 203. ....the Government acknowledged the importance of making the system of restitution more effective. A working party had been established in 2009 ....an action plan had been submitted to the Committee of Ministers of the Council of Europe on 25 February 2010, comprising the following elements
– creation of an interministerial commission aimed at pinpointing the best means of finalizing the property restitution process
– amendment of the legislation on restitution of nationalized property in order to simplify the process and make it more effective. The most important proposals concerned the setting of time-limits for each administrative stage in the procedure and the introduction of penalties for failure to comply, an increase in the surface area of land which could be returned and an increase in the number of staff working on restitution cases;
– organization of talks with associations of former owners and representatives of civil society
- Our comment to Government's action plan is similar to that of the Court: par. 190......although it proposes some interesting solutions, no timetable for their adoption has yet been communicated.
- par. 225. The absence of any time-limit for the processing of claims by the Central Board is another weak point in the domestic compensation mechanism, identified by the Court in Faimblat, cited above, and acknowledged by the HCCJ,.Similar comment in par 226.
– The high value of necessary compensations, especially during this period of crisis, when Romania covers part of its expenses using loans of the European Union and the International Monetary Fund, shows the complexity of the problem.
5. The recommendations of the ECHR for solving the revealed systemic problem should be enforced within the 18th month following the day the pilot decision becomes definitive. We add some more recommendations
- the cheapest solution for the state are either the restitution of confiscated goods to the dispossessed owners and compensation of later buyers or a compensation in form of an equivalent real estate. In the first case the compensation of the buyer should be based on the indexed purchase price, which was often one hundredth of the market price. A compensation based on the market value would be an enrichment without fair cause of the buyer and also a theft from the state budget and the tax payer.
To facilitate compensations in form of equivalent real estate an updated land registry should be maintained-
- To accelerate the compensation procedures, as the ECHR has strongly recommended, besides the evaluations of the authority NARP, also evaluations in court, with executory title (without paying taxes) should be admitted. This way the surcharged authority ANRP could be relieved. Similarly redundant verifications, as they are today performed by the city council, by the prefecture and by the ANRP authority, should be eliminated.
- Corruption at all levels should be detected and punished
- European funds for Romania, which were not called by Romanian Authorities, and would otherwise be lost, should be directed, under severe monitoring , to the payment of compensations for dispossessed owners
- The civil organizations, as well as the associations of dispossessed owners, who posses a good overview over these problems, should be involved in decisions concerning legislation and enforcement.
E.g. newspapers Evenimentul Zilei from 24.6.2010 Costiniu, mai aproape de Voicu, Gandul 2.11.2005, Judecatorul Bicu Vasile de la Tribunalul Bucuresti a primit spaga un Nissan Primera
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