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The Polish Housing Market

22 Feb 2006 /  #1
The Case of Maria Hutten-Czapska and Her Villa

How long does it take to get justice in Poland? If you are a property owner fighting the Polish state, it seems like forever. A French citizen of Polish origin, Countess Hutten-Czapska, although titles do not give you any favors in Poland nowadays, has been on a warpath against the Polish state since 1989, though without any success. Nevertheless the countess, now in her seventies, is still fighting.

At present, after fifteen long years of a hopeless struggle, the European Court of Human Rights in Strasbourg, France, is handling her case. Why the European, rather than the Polish Court? It seems the countess lost her inherent faith in the Polish legal system. Justice is one thing, the law another, and it seems at times they seldom meet.

What is it all about? Putting it simply the case is about the right of deciding over your own property, which is one of the basic human rights. If you own a house you should be at least able to decide who lives in it and how much rent they pay, states the countess. Well, the Polish state has been of a different opinion until quite recently, although, the state's interference with the private ownership dating since 1944, constitutes a clear breech of the article 1 of the Convention of Human Rights. This declares (regarding protection of property) that:

"Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law."

The fact is that, following the creation of the socialist state, most properties were nationalized, and those that weren't, were submitted to the state administration that not only decided who would live in your house but also the rent he would pay.

Since the socialistic state paid only extremely meager salaries to its employees, it was in the state's interest to keep rents down, as to not cause popular unrest. For this reason for almost fifty years the rents had been kept far below the cost of the maintenance; any profit, an ugly word under the regime, was totally unheard of.

As we all know, the socialist Polish state created after the Second World War by the Soviet union fell apart in 1989. A new republic was created based on market economy, in most sectors, except the rental property market. Undeterred, the state continued to pursue the old politics of the past. The state still continued to regulate the rent, thus protecting the "weak," that is the tenant, against the "capitalistic" owners. Unfortunately, the landlords are still envisioned as money hungry, ruthless thugs, while the tenants are the poor angels.

But the truth is never that simple. There are, of course, bad landlords waiting only to increase rents, but there are also tenants that, thanks to the state's protection, have not been paying any rent whatsoever for years and who thanks to the protection of the Polish law cannot be evicted. And we are not talking of some extreme cases here, but about 20% of tenants currently living free of charge are in other people's house.

The countess is but one of those numerous landlords complaining to the European court. Thus, her case has been chosen as a "pilot" case, which means that its judgment will apply to all the other cases similar cases within the EU. As it is obvious, it is an important case, which can mean billions in damages for the Polish state.

Let's have a closer look at the case, to understand what the whole uproar is about. The countess property is a villa once built and owned by her parents in 1936. After the war the council started to assign the flats in the house as it pleased. Although, the parents of Mrs Czapska were temporally given the house back, soon they were ordered for good from their property and the house remained, until 1990, when it was returned to its righteous owner, under the council administration.

In the returned villa, the countess planned to establish a charitable foundation, alas, without success. The Polish courts refused the landlord's appeal for the tenants to be removed, as well as allowing the owner to charge the market rates for rent. An application for compensation for lost income and the changes made to the house under the council rule was also denied.

After having her case in the Polish courts rejected for years, the countess had enough and took her case to Strasbourg after several years wait. They took up her case in 2005. The countess won the case, but wait, don't declare "happy ending" yet.

Although the court agreed that the Polish state was at fault, no compensation was awarded (Mrs Czapska asked for around 140,000 euro). Instead the Polish state and the countess had to negotiate the compensation on their own.

As could be expected, the Polish state lodged an immediate appeal and the case was judged again in January this year, although the new judgment has not as yet been made public. Believe me that every single owner of a private property in Poland holds his or her breath in anticipation.

Where it will end is anyone's guess and soon enough we will know. Whatever will be decided, the Polish rental market is in terrible shape and it will take many years to alleviate the problem. Unless the tenants contribute funds in form of reasonable rents, the Polish rental market is heading for a catastrophe. On the other hand, making the state pay enormous damages will further endanger the Polish state's economy and will certainly not help the state's investments in other areas. All one can do is wait and see what the judgment will be. Whatever the outcome, its consequences will be monumental. It's a real thriller.

23 Feb 2006 /  #2
... so shall I stay home? :) On the other hand, there are similar situations in each and every country I suppose...
12 Mar 2006 /  #3
I don't hink things like that happen anywhere else. It takes a special combination of socialist incompetence with typical Polish naivity. Everything will be well, just put your head in the sand. And don't forget to close your eyes first.
vladislav skalicky  
29 Mar 2006 /  #4
It si even greater injustice in the Czech republic where the rents in real terms are lower themn in Poland.
The lanlords here are also watching the results of the Polish appeal with great anticipation
4 May 2006 /  #5
It's too bad for Poland that the US dollar is currently weak. Otherwise even I might be able to afford a home there :). On the other hand, average Poles who work for 500 USD a month aren't able to buy new properties.
14 May 2006 /  #6
PolReport - why don`t you write your reports for Trybuna or some other commie newspaper.. I`m sure that there you`d find a lot of people who would appriciate your whineing.

Let`s face it, communism has ended here 17 years ago and applying communist-era thinking to the present times absoloutely dosn`t make any sense.
14 May 2006 /  #7
the present times absoloutely dosn`t make any sense.

I wouldn't be so sure about that -- ask president Lukaszenko and ... Putin.
14 May 2006 /  #8
"I wouldn't be so sure about that -- ask president Lukaszenko and ... Putin."

Why should I ask a dictator and an authoritarian leader about that ? Belarus under the "Father`s" rule has downgraded itself into the cathegory of an obscure 3rd World country and Russia (a country with a GDP and livingstandards comparable to that of Mexico, though it is much richer than Belarus) if not becaouse of its natural resources wouldn`t mean absoloutely anything in this World.
24 May 2006 /  #9
Russia (a country with a GDP and livingstandards comparable to that of Mexico, though it is much richer than Belarus) if not becaouse of its natural resources wouldn`t mean absoloutely anything in this World.

Frankly speaking Poland's GDP almost 3 times less then Mexican or Russian, it's one of the biggest countres in Europe

Russia (a country with a GDP and livingstandards comparable to that of Mexico, though it is much richer than Belarus) if not becaouse of its natural resources wouldn`t mean absoloutely anything in this World.

Frankly speaking Poland's GDP almost 3 times less then Mexican or Russian, and more than twice less then Holland GDP, thought it is one of the biggest countries in Europe with population over 40 million people. And I have to confess it means much less than Russia even in Europe not to mention the rest of the world.

24 May 2006 /  #10

population: $143 million
GDP nominal: $766 billion
GDP per capital (PPP): $11,000
Human Development Index: 0.795 /62th possition in world
Freedom of speech index not free
Political freedom:


population: 107 million
GDP nominal: $766 million
GDP per capita (PPP): $10,200
Human Development Index: 0.814 / 53th possition in the world
Freedom of speech index: free
Political freedom: free


population: 38 million
GDP nominal: $300 billion
GDP per capita (PPP) $13.000
Human Development Index: 0.858/ 36th possiton in the world
Freedom of speech index free
Political freedom: free

I see that you have difficoulties with numbers..

So beat it - or do you want to have another orange revolution ? - this time on the Red Square :)
29 May 2006 /  #11

Polish GDP: $302 billion
Mexican GDP: $824 billion
Russian GDP: $921 billion

Your turn :)

29 May 2006 /  #12
Now it's even more since US dollar is weak....:)
11 Jun 2006 /  #13
Yes, but Russia is "slightly bigger" and Mexico has a "slightly" bigger population.

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