Individual Democratic Institutions Research Fellowships 1994-1996

The research reports reproduced here are the responsibility of the individual authors. Their reproduction does not imply any form of official or unofficial endorsement by NATO. The reports are offered in unedited form, as presented by their authors, with a view to make their findings available to a wide audience. La protection juridique de la propriété privée dans le nouveau contexte social et économique de la Roumanie Simona Iliescu Nastase [Back to Index] Chapter 5 - The legal situation of the nationalised real estate Except the land owned by the state or by co-operatives, the buildings nationalised in late '40s and early '50s were subject to restitution only to a small extent. After 1989, this situation soon became subject of controversy among scholars and furthermore, generated a climate of conflict between the landlords or their heirs and the present tenants living in the buildings in question. Such circumstances - faced by all former socialist countries -urged the Romanian legislator to intervene, by adopting a new law regarding the legal situation of this type of real estate. Adopted in 1995, this law came however late, considering the fact that the restitution of the buildings abusively nationalised became a serious social issue even since 1990. Confronted with the weakness ( or rather unwillingness) of the state in finding an appropriate solution to this situation - a solution meant both to protect the landlords' right of property and the tenants' interests - many persons sought in the judiciary a possible way of solving their problem. Thus, many actions for the recovering of these houses were brought before the law courts. The legal grounds for these claims were the Romanian Civil Code provisions, which state that the property cannot be lost by non using it, especially in the case of houses transferred to the state administration by violence, without any legal redress and without having the legal grounds for it. Furthermore, it is a well known fact that in most of cases the landlords ended up in the communist prisons. On the other hand, some plaintiffs invoiced before the courts the unconstitutionality of the Decree 92 from 1950, the most important regulation related to and used for the nationalisation of housing. The main argument used against this Decree was that the 1991 Constitution does not provide nationalisation as a legal way to transfer private property into the state ownership. For a short period of time, most of these claims were successful - the courts recognised the plaintiffs their ownership rights. In 1995, however, the courts' freedom to decide upon this issue was severely limited by the Supreme Court of Justice, which, by justifying the need for a uniform jurisprudence regarding nationalised real estate, decided for the change of its own practice. Thus, according to the Supreme Court Decision from February 2, 1995 (following a tight vote - 25 for and 20 against), the Courts do not have the ability to monitor and decide upon the restitution of the real estate nationalised by the Decree 92/1950. As to the grounds of judgement for this decision, the Supreme Court has shown, in its explanatory statement, that the Decree of nationalisation was conform to the 1948 Constitution, in force by the time the above mentioned Decree was passed. By consequence, the Decree 92 cannot be evaluated according to the present Constitution, because this would represent a violation of the principle of non-retroactivity of the law, a principle otherwise stipulated by the 1991 Constitution. Another argument invoiced by the Supreme Court was that the plaintiffs were not able to show written evidence in order to prove their ownership rights, while the defendant (the State) has demonstrated its rights, based on the Decree 92. Furthermore, according to Decree 524/1955, provided that the confirmation of individual decisions belonged to the former Council of Ministers. This 1955 legal situation was used by the Supreme Court to conclude that the courts are not able to judge the actions in recovery of the nationalised houses, until a special law will regulate the restitution procedure. Following this controversial decision, the General Prosecutor filed a series of appeals in cancellation against the decisions of restitution given by the ordinary courts. All of these appeals were admitted by the Supreme Court, so the previous decisions were cancelled. The new law. With difference from other former socialist states, where the new laws provided as the norm the restitution in kind ( the Czech Republic, Germany, Bulgaria ), the Romanian legislator established very limited possibilities for the landlords to benefit from the restitution in kind, the compensation procedure prevailing in most of cases. Thus, according to the Law 112/1995, the Romanian citizens benefit from the restitution in kind only if the houses in question are free or if the landlords or their heirs live as tenants in their own houses. When there are tenants living in those houses, the landlords will be paid a compensation, representing the sum of the one person average wage per economy for the last 20 years. Comparing this amount with the real value of the respective houses on the market, it is obvious that the due compensation is far from being fair. In such circumstances, the landlords find themselves in a position of victims for the second time. On the other hand, the rental contracts with the tenants living in these houses are prolonged by the law for another five years. A similar solution was also given by the Bulgarian legislation, which prolonged the rental contracts for another three years period, beginning with 1995. In the Bulgarian case, however, this solution is meant to leave the tenants the time to find another place. The most controversial provision of the Romanian law is still the one by which the tenants living in the nationalised houses are given the possibility to buy them, either by paying at once or by paying on a 15 or 20 years ( for young couples under the age of 30 or for persons aged over 60) instalment scheme. As an exception, the houses declared as historical monuments or having a protocol use, as well as those ones used by the former or present high public officials are not subject to sale. A significant provision of this law is the one stipulating that all court decisions regarding the restitution of abusively nationalised houses can be subject of an appeal in cancellation. By consequence, considering this provision and following the Supreme Court jurisprudence, the access to justice of the concerned parties is in practice severely restricted, thus fair solutions can hardly be seen. Finally, the Constitutional Court imposed another restriction to the restitution procedure; by using the principle of the separation of power, the Court decided that the power to decide upon the restitution in kind does not belong to the judiciary but to the legislator (Parliament).