Lavinia Stan

A reposting of one of my materials first made available on Journal of Property Rights in Transition, at

On April 3, 2013, the European Court of Human Rights (ECHR) granted the Romanian government yet another extension in the hope that owners of property abusively confiscated by the communist regime will see justice. In October 2010, in a pilot judgment in the Maria Atanasiu vs. Romania case the ECHR asked Romania to revise the underlying dysfunction at the national level that led so many Romanian citizens to petition the Court in “repetitive cases” related to property return. Romania has lost 435 property restitution cases at the ECHR, for breaching Article 1 in protocol 1 of the Convention on Human Rights, which protects property rights [1]. The ECHR adopted its first pilot procedure in 2004 in the Broniowski vs. Poland, another property related case. In a pilot judgment, the Court must decide whether a violation of the Convention occurred and indicate to the government the remedial measures needed to rectify the systemic problem the Court had identified [2]. Even if the Romanian legislative framework is changed and the government-sponsored National Fund is created, the fact that few abusively confiscated properties were returned by 2013, close to 25 years after the collapse of the communist regime, means that property restitution does not really work in that country.

The bones of contention are the dwellings, which the communists confiscated without due compensation throughout the 1945-1989 period. After 1990, the new rulers showed intention not to satisfy owners’ restitution demands but to acquire the ownership rights of nationalized dwellings for themselves. First, these nationalized historical houses were well situated in leafy neighborhoods, and had distinct architectural features that made them status symbols for the new elite. Second, they were systematically under-valued by the governmental agency that oversaw them, and could be bought or used only by individuals closely connected to the government. These high status symbols available at rock-bottom prices have attracted politicians of diverse ideological persuasions on all sides of the political spectrum (former President Ion Iliescu, once a Communist Party official, as well as his rival, Democrat Liberal President Traian Basescu, have both acquired nationalized dwellings) [3].

Until 2005 successive Romanian governments blocked attempts by owners to recover their dwellings, siding with the tenants who were using the dwellings (well connected political, business, and cultural luminaries) against the owners (elderly persons or residents of foreign countries). Only 5 percent of all owners received their homes back. In 2005, a Property Fund (Fondul Proprietatea) started to compensate owners whose properties could not be returned because they had been demolished, bought by the tenants living in them, or (abusively) retained by the government offices (mayoralties and ministry departments) using them. The Property Fund relied on shares in large state-owned companies. Because it was constituted over 15 years after the privatization process was launched, during which most such companies had been transferred into private hands, the Fund controlled few assets effectively. As such, many owners continued to receive neither property, nor compensation. Executive interference in the activity of the judiciary meant that many courts disregarded procedure and infringed both the Romanian Constitution and the European Convention of Human Rights when hearing restitution cases, thus prompting an increasing number of owners to approach the ECHR. This is why in 2010 the Court asked the government to revamp its property restitution scheme.

From October 2010 to April 2013 Romania did nothing to comply with the ECHR request. The vested interests of powerful political elite members in retaining ownership of the nationalized dwellings by disregarding the rights of the owners explain why the authorities did not consult with the owners, although consultations were recommended by the Court and would have involved little effort. Political instability was also at play. There were no fewer than four cabinets during that time period (headed by Prime Ministers Emil Boc, Mihai Razvan Ungureanu, and Vasile Ponta), the first three of which were weak cabinets delegitimized by scandals, frequent replacements of ministers, and an unclear policy direction. Instead of solving the restitution cases, by providing the Property Fund with the means needed to compensate owners, punishing Fund leaders for mismanagement and waste, and protecting owners from undue pressure to renounce their property rights, these governments perpetuated an untenable system. According to some reports, 1,000 intermediaries well connected to the Fund cashed in 1.5 billion Euros for property claims they brought from disillusioned initial owners, who simply gave up the fight. These intermediaries received compensation at higher rates and faster than thousands of owners whose claims the Fund refused to consider promptly and honestly [4].

In March 2013 the current Social Democrat government of Victor Ponta, heir to the Communist Party that nationalized the disputed dwellings, announced the creation of a new National Fund destined to settle the 200,000 outstanding restitution claims. This Romanian scheme – as any Romanian scheme proposed since 1989 — is unnecessarily complicated. Owners will get points proportional to the compensation they are entitled to, whose level will be decided by a National Commission for Compensating Building Owners. The Commission will also decide how many points each land plot is worth. The owners will be able to use those points to bid for assets owned by the new fund, totaling 3.6 million hectares of agricultural and forestry land. The bids will be accepted only starting in 2016, to give the government the time to identify the land plots included in the scheme. Owners who will refuse to buy land will receive cash in installments over a seven-year period, starting in 2017 (that is, almost 30 years after the collapse of the communist regime). The government boasted that the new Fund would disburse 10 Billion Euros, making Romania the only country to compensate owners so generously [5].

The new fund will be insufficient in deterring Romanian owners from approaching the ECHR, if the government does not boost the independence of the judiciary, stop undue pressure of the executive and legislative over the judges, revoke the controversial recurs in anulare procedure (which allows the government to overturn definitive and irrevocable court decisions that recognized owners’ right to their property), or encourage judges to refuse hearing property restitution cases. It remains to be seen whether the measures the government will soon announce will suffice in convincing the ECHR to restart hearing property restitution cases lodged by Romanian citizens. 


[1] “Romania asks for delay in enforcing new property restitution law from the European Court of Human Rights,” Romania-Insider, 21 March 2013, available at: (accessed on 3 May 2013).

[2] European Court of Human Rights, “Pilot Judgments,” April 2013, available at: (accessed on 3 May 2013).

[3] Lavinia Stan, “The Roof Over Our Head: Property Restitution in Romania,” Journal of Communist Studies and Transition Politics, vol. 22, no. 2 (June 2006), pp. 180-205.

[4] “Romanian PM: Property restitution became lucrative real estate business for 1,000 intermediaries,” Romania-Insider, 15 April 2013, available at: (accessed on 3 May 2013).

[5] “Romania plans another national fund for property restitution, with landplots and forestry as main assets,” Romania-Insider, 19 March 2013, available at: (accessed on 3 May 2013).