2012-04 – Unfinished business: Why return issues remain relevant in the process of European integration

by Halisa Skopljak (April 3, 2012)

The 1992-1995 war in Bosnia and Herzegovina (BiH) uprooted over 2.5 million displaced persons and refugees and left some 200,000 properties abandoned by their pre-war occupants. The postwar domestic authorities invested considerable efforts in preserving the ethnically cleansed territory of both the ‘entities’ comprising BiH; the Serb-dominated Republika Srpska (RS) and the Bosniak/Croat Federation of Bosnia and Herzegovina (FBiH).

Property restitution laws were introduced in 1998 in accordance with Annex VII of the Dayton Peace Agreement for BiH (GFAP) to ensure the repossession of property and create preconditions for sustainable return. Concerted efforts by the international community in BiH  helped break the stalemate over restitution, resulting in over 90 per cent of properties abandoned during the war being repossessed by pre-war occupants 10 years after the GFAP was signed and 8 years after Property Laws entered into force. However, the struggle continues.

When the implementation of laws on the repossession of war-time dispossessed properties in Bosnia and Herzegovinawas declared substantially completed in 2006 it was unimaginable that a half decade later the reformed judiciary in BiH would seek to reverse this process. Such negative practices by domestic authorities largely ended in 2002 with the introduction of the New Strategic Direction, an international policy document that helped to overcome bureaucratic obstruction by ensuring that repossession claims were dealt with in chronological order and that local administrative bodies ensured alternative accommodation to temporary occupants of other people’s property if they were unable to repossess their own.

The process of return of property in BiH to its pre-war owners was implemented in accordance with a set of legislation initially adopted by the entity parliaments. In the RS this was the RS Law on Cessation of the Application of the Law on the Use of Abandoned Property and in FBiH the FBiH Law on Cessation of the Application of the Law on the Use of Abandoned Real Property and the FBiH Law on Cessation of the Application of the Law on the Use of Abandoned Apartments. In order to ensure effective implementation, these laws were amended a number of times. One of the amendments imposed by the Office of the High Representative (OHR) in 2003 today represents a nightmare for a number of returnee families in BiH. The (RS) provision reads:

Article 27a[1]

A person whose right of temporary occupancy or occupancy right was cancelled under Article 2 of this Law, who spent his/her personal funds on necessary expenses for the real property or apartment, shall be entitled to recover those under the Law on Obligations (Official Gazette of the SFRY, Nos. 29/78 and 39/85; Official Gazette of the Republika Srpska, Nos. 17/93 and 3/96). Proceedings under the Law on Obligations may be commenced from the date when the previous owner or occupancy right holder regains possession of the real property or apartment.

Where the court has awarded compensation to the person referred to in paragraph 1, the owner or occupancy right holder may recover that sum from the competent authority or, in the case of an apartment, the allocation right holder under the Law on Obligations.

The competent authority shall be liable for all damage to the real property or apartment from the time it was abandoned by the owner or occupancy right holder until the time it is returned to the owner or occupancy right holder or a member of his/her 1991 household pursuant to this Law, or, in the case of real property, until the time that the property is vacated and sealed and notification has been delivered to the owner in accordance with the provisions of this Law and the Law on General Administrative Procedures. In the case of an apartment, any repairs carried out by the occupancy right holder or a member of his/her 1991 household to restore the apartment to the state it was in prior to its abandonment shall be deemed “funds with which the holder of occupancy rights removed war damage” for the purposes of the Law on Privatization of State Owned Apartments (RS OG 11/00, 18/00, 35/01 and 47/02).

This amendment was intended to accelerate the unconditional return of property[2] to its pre-war owners and users, and thus enable the return of refugees and displaced persons, leaving other legal issues not directly related to repossession to be decided in separate proceedings. This solution would later prove to be a double-edged sword and the type of obstruction conducted by administrative bodies in the late 1990s would once again be revived by judiciary with renewed effect.

The Case of Faik Zulčić

Faik Zulčić from Bijeljina owned a house in Bijeljina that was still unfinished (under construction) when he abandoned it in April 1992.[3] In January 2004, the Bijeljina Municipal Court ordered Mr. Zulčić to pay BAM 17,937.00 (nearly 9,000 Euros) to the wartime temporary occupant of his home. Four years later, in March 2008, the Bijeljina District Court confirmed the first instance court verdict on appeal, requiring Faik Zulčić to pay the slightly lower amount of BAM 17,267.00 “for the works on the house […], which was allocated to [the occupant] to temporary use it as a displaced person” as well as expenses of the proceedings[4] and in the reasoning of the decision the Appellate Court states that:

…the plaintiff had to do all finishing works on the house in order to use it, such as internal plastering, constructing the chimney under and over the roof, the installation of doors and windows, a complete water and sewer installation, installing electricity, placing wall and floor tiles, digging the septic tank, placing a water connection with manhole, connecting to the telephone land line network, locksmith works, making a foundation for parquet and parquet flooring, painting walls and building partition wall in the basement”.[5]

The Appellate Court further holds that according to the abovementioned Article 27a of the RS restitution law, these works represent essential works and that the investor is entitled to their return on the investment. The court also rejects the argument that the actions of the temporary occupant represent negotiorum gestio, failing to provide any additional reasoning. There are at least two questionable things with regard to this decision.

The first relates to the time of filing of the lawsuit by the temporary occupant in relation to the procedural preconditions to conduct proceedings that the court is responsible to observe ex officio. Specifically, Article 27a prescribes that the temporary occupant has the right to recover expenses pursuant to the Law on Obligations from the day when the previous owner or occupancy right holder regains possession of the real property or apartment. However, in this case, the owner of the property entered into possession in September 2002, while the temporary occupant filed the lawsuit in November 2001, or 10 months prior to the fulfilment of the legal requirement. Neither the first instance nor the Appellate Court ever deliberated on this fact, let along ruled the claim premature.

A second question is whether the Court is tendentiously interpreting the restitution law and the Law on Obligations in such a rigid way. It is hard to escape such an impression and believe that this was a consequence of superficial understanding or ignorance. Although the court decision was rendered in 2008, the facts of the case were not interpreted under the circumstances that existed at the time of allocation of the property to temporary occupant and when all the work was done, i.e. 1996-97. The Appellate Court considers “essential” work to include tasks such as making foundation for parquet and parquet flooring and building partition walls in the basement, or connecting to a telephone landline network, even though temporary wartime allocation of property by its nature represented an impermanent and extraordinary way of accommodation in atypical circumstances. This level of investment into a 170 square metre house allocated for temporary use raises questions as to the real intentions of the investor.[6]

The Court in Bijeljina failed to provide answers to any of these questions. Instead, it applied the Law on Obligations as if in ordinary, peacetime circumstances, ordering the owner to pay the temporary occupant’s investment in full. In doing so it has taken into account all expenses without assessing whether they were indeed necessary or useful.[7] In fact, the reasoning for the decision was that the property value was increased in the amount of the investment, so the owner of the property would gain a double benefit and acquire enrichment without cause.

It is interesting to note that the Appellate Court applies the RS restitution law but fails to recall Articles 14 and 15 of the wartime Regulation on Accommodating Refugees and other Persons on the Territory of Republika Srpska which stipulates that before rehabilitating unfinished facilities, the costs had to be estimated and rehabilitation permits issued by the competent municipal body.[8] Neither such an estimate nor a permit were issued.

The epilogue of this case was the auction of the disputed property because the owner did not have the resources to otherwise meet the obligation stemming from the court decision.  In November 2010, the property was sold in auction to the former temporary occupant for half of the estimated value, and the rest of the debt will be compensated by the sale of the owner’s movable properties. The enforcement proceeding is pending a decision on appeal filed against rejection of the motion for repetition of the proceedings (an extraordinary legal remedy that must be exhausted prior to recourse to the Bosnian Constitutional Court).[9] In the meantime, Mr. Zulčić’s debt has increased due to the application of penalty interest to approximately BAM 60,000.00 (approximately EUR 30,000.00).

It is also important to note that the owner failed to request recovery of funds from the competent body pursuant to Article 27a paragraph 2.

The judge who conducted the first instance proceedings was not reappointed in the process of reappointment of judges and prosecutors in the course of 2003-4 judicial reform process in BiH.

This case illustrates the pattern of problems faced by the returnees in both entities of BiH (the official data on their exact number is still unavailable). In addition to this issue, there are at least two other outstanding problems directly related to the implementation of property restitution laws in BiH. One is the fate of the cases managed by a quasi-international restitution body, the ‘CRPC’ that remained undecided before the closure of the organisation.[10] Another is the issue of implementing a recent European Court of Human Rights decision ordering redress for confiscated military apartments in the FBiH[11]. These factors make the much-anticipated declaration of the full implementation of Annex VII of the GFAP hardly appear likely anytime soon.

Concluding Remarks

The process of property repossession in BiH is unprecedented in the history of the protection of refugees and displaced persons. This makes it difficult to analyse through the prism of existing international standards and practice. However, this process should be analysed through the prism of standards relevant to BiH in this area: the European Convention on Human Rights, which is the integral part of the Bosnian Constitution, Annex VII to the Peace Agreement and the implementing legislation contained in the Laws on Cessation of the Application of the Laws on the Use of Abandoned Property as lex specialis. All those made an excellent framework to ensure that refugees and displaced persons would repossess their property (and decide whether to actually return to their pre-war homes) and no other purpose was meant to be achieved by them. For that reason, they should be applied in such way by any authority whose interpretation is solicited.

Bosniais currently undergoing a new discussion on restructuring of judiciary following allegations of inefficiency, lack of professionalism and bias. However, this “structured dialogue” with the EU mainly focuses on war crimes trials. The RS has asserted the unconstitutionality of the Court and Prosecutor’s Office of BiH established by transfer of entity competencies to the state (which, the RS claims, do not derive their competence directly from the Bosnian Constitution as such). Unfortunately, it cannot be expected that this structural dialogue will change significantly the practice of courts when it comes to the rights regulated by the Peace Agreement and its Annex VII on return.

Annex VII was meant to ensure that the political, economic, and social conditions conducive to voluntary return across BiH. Had such been created by those who had the obligation to create them the population structure of currently ethnically divided BiH would look much different. The reestablishment of ethnic, political, social and religious pluralism would have been a corrective mechanism to guarantee equal treatment of all before the law, ensuring independent, accountable, impartial, efficient authorities and judiciary. This would make the structured dialogue redundant…had only Annex VII been implemented.


[1] See also, FBiH Law on Cessation of the Application of the Law on the Use of Abandoned Real Property (Official Gazette of the Federation BiH, Nos. 11/98, 29/98, 27/99, 43/99, 37/01, 56/01, 15/02, 24/03), Article 17d

[2] OHR letter of 23 August 2011 (046/2011/IJ/AH) “The amendments to the Law on Cessation of the Application of the Law on the Use of Abandoned Property enacted by decision of the High Representative in 2003 were aimed at accelerating the right to return by ensuring that the relevant property legislation is implemented in a swift and non-discriminatory manner. The relevant domestic authorities should interpret and apply the provisions of Article 27a in a manner that is consistent with the rights of refugees and displaced persons under Annex VII to return home and have their prewar property restored. As a result, the right of a temporary occupant of abandoned property to receive compensation for necessary expenses under Article 27a should not impair the rights of refugees and displaced persons to freely return to their pre-war homes of origin or to have restored to them property of which they were deprived in the course of hostilities since 1991.

[3] Bijeljina is a town in the northeastern part of Bosnia and Herzegovina where the atrocities of the 1992-1995 war began. See the ICTY verdict against war criminal Momčilo Krajišnik sentence to 27 years of imprisonment http://www.icty.org/x/cases/krajisnik/tjug/en/kra-jud060927e.pdf.

[4] Bijeljina District Court Decision Gž-287/04 of 17 March 2008 (unofficial translation by the author).

[5] Unofficial translation by the author

[6] Had the temporary occupant and his four-member family been allocated an alternative accommodation by the competent municipal body after vacating the property of Faik Zulčić, the following standard provided by Article 1a of the restitution law would have applied: “[…] one or more rooms which provide shelter to the user from adverse weather conditions and protect his or her furniture from damage, with a minimum of 5 square metres/person.

After such extensive refurbishing, the court should have been prompted to consider bona/mala fide actions of the temporary occupant, considering that the allocation and refurbishing took place after the GFAP was concluded in December 1995, and after its Annex VII made the right to return and repossession of property applicable to all refugees and discplaced persons .

[7] OHR in its letter of 23 August 2011 (046/2011/IJ/AH) sent to Mr Salem Čorbo from the Citizens Association Povratak i održivi ostanak from Bijeljina (Sustainable Return) reiterates that “The provisions of Article 27a are meant to cover only the compensation of “necessary expenses”, which represent only those costs that are essential and required to preserve an item of real property and its functional capacity, i.e. those required to maintain an item of real property in usable condition. The Office does not believe that the concept of necessary expenses includes “useful expenses”, which are not essential to the preservation of the existence and functional capacity of an item of real property or expenditures that serves primarily to increase the value of an item of real property as an investment. Additionally, the evaluation of a temporary occupant’s personal expenses under Article 27a must be conducted thoroughly and with full regard to the established legal definition of ‘necessary expenses’.

[8] Regulation on Accommodating Refugees and other Persons on the Territory of Republika Srpska (Uredba o smeštaju izbeglica i drugih lica na teritoriji Republike Srpske) Official Gazette of RS no 27/93

Article 14: Pursuant to the Regulation on Establishing and Defining Competency of the Commission for Recording and Assessing the War Damages (Official Gazette of RS no 3/93) abandoned facilities that suffered one to five category war damages, including unfinished facilities, can be allocated for temporary use.

The Municipal Commission referred to in Article 4 or other body or organization authorised by the municipality shall estimate costs of rehabilitation of the facilities referred to in paragraph 1.

Article 15: A rehabilitation permit shall be issued to a person who was temporary allocated a facility referred to in Article 14.

The rehabilitation permit shall be issued by the Municipal Body for Urbanism and Housing Affairs pursuant to the allocation decision, records of the damages and estimated costs of rehabilitation. Unofficial translation by the author

[9] The appeal of the Bijeljina District Court decision that was filed with the Constitutional Court of BiH was rejected as inadmissible on 15 June 2010 (AP 473/10) because the appellant failed to exhaust all effective legal remedies.

[10] See Analysis: Komisija za raseljena lica i izbjeglice (CRPC) -pravno nasljeđe (Commission for Real Property Claims- Legal Heritage), available at:  http://www.fcjp.ba/templates/ja_avian_ii_d/images/green/Srdjan_Arnaut.pdf


2 responses to “2012-04 – Unfinished business: Why return issues remain relevant in the process of European integration

  1. Comment from Chris, April 5, 2012:

    Maybe the issue of so called unsolicited investments could be resolved the way it has been in Croatian with the State offering extra judicial settlements to temporary users of occupied properties for the investments made. This is the solution the EU pushed for in Croatia, maybe somebody within the EUSR office should remember about it.

  2. Pingback: Back to the Balkans – upcoming guest postings on restitution issues in Bosnia, Serbia and Kosovo | TerraNullius

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s