Identifier
Created
Classification
Origin
06PRISTINA299
2006-04-04 15:14:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Pristina
Cable title:  

KOSOVO STANDARDS DELIVERABLE: PROPERTY RIGHTS

Tags:  PREL PGOV PHUM KDEM UNMIK YI 
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VZCZCXRO1947
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RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHPS #0299/01 0941514
ZNR UUUUU ZZH
P 041514Z APR 06
FM USOFFICE PRISTINA
TO RUEHC/SECSTATE WASHDC PRIORITY 5988
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNDT/USMISSION USUN NEW YORK 0636
RUFOANA/USNIC PRISTINA SR
RHMFISS/CDR USEUCOM VAIHINGEN GE
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK
RHFMIUU/AFSOUTH NAPLES IT
RHMFIUU/CDR TF FALCON
RHEFDIA/DIA WASHDC
RUEKJCS/SECDEF WASHINGTON DC
RUEPGEA/CDR650THMIGP SHAPE BE
RHEHNSC/NSC WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC
UNCLAS SECTION 01 OF 03 PRISTINA 000299 

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR DRL, INL, EUR/SCE, NSC FOR BRAUN, DOJ/OPDAT FOR
SEASONWEIN, EMBASSY ATHENS FOR TOM YAZDGERDI, EMBASSY
BELGRADE FOR LAURA BROWN

E.O. 12958: N/A
TAGS: PREL PGOV PHUM KDEM UNMIK YI
SUBJECT: KOSOVO STANDARDS DELIVERABLE: PROPERTY RIGHTS


Sensitive But Unclassified; Protect Accordingly

UNCLAS SECTION 01 OF 03 PRISTINA 000299

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR DRL, INL, EUR/SCE, NSC FOR BRAUN, DOJ/OPDAT FOR
SEASONWEIN, EMBASSY ATHENS FOR TOM YAZDGERDI, EMBASSY
BELGRADE FOR LAURA BROWN

E.O. 12958: N/A
TAGS: PREL PGOV PHUM KDEM UNMIK YI
SUBJECT: KOSOVO STANDARDS DELIVERABLE: PROPERTY RIGHTS


Sensitive But Unclassified; Protect Accordingly


1. (SBU) SUMMARY. UNMIK and the Provisional Institutions of
Self Government (PISG) have created the Kosovo Property
Agency (KPA) as a quasi-judicial forum for resolution of
private real estate disputes. The KPA will replace the
Housing and Property Directorate (HPD),the independent
agency that has adjudicated possession rights to 29,000
residential properties affected by the Kosovo war. The KPA
inherits a significant piece of unfinished HPD business --
what to do with the 5,400 HPD-administered residential
properties for which tenants are not paying rent to rightful
owners. In addition the KPA is charged with the adjudication
of rights to an estimated 11,000 agricultural and commercial
properties over which HPD had no jurisdiction. Most of these
leftover cases involve absentee ethnic Serb owners and ethnic
Albanian tenants. The new agency could establish itself as a
champion of minority rights, and help the PISG realize one of
the Standards for Kosovo, by instituting and enforcing a
rental scheme for these thousands of properties. END SUMMARY.

Background
--------------


2. (SBU) On March 4, the SRSG Soren Jessen-Petersen signed
into law UNMIK Regulation 2006-10 establishing the Kosovo
Property Agency as a quasi-judicial body ostensibly operating
under the authority of Kosovar courts within the Provisional
Institutions of Self Government (PISG). The regulation calls
for each KPA decision to be sent to the courts whose failure
to act within 45 days would be construed as affirmation of
the KPA decision. Court action options in any case are to be
limited to affirmation of a KPA result or remand to the KPA
for further consideration. This unusual appellate structure
embodied UNMIK's effort to involve Kosovo's struggling courts
without overwhelming them. USOP and other liaison offices
argued that creation of an executive agency whose decisions
would be appealable to the courts would be a better model,

but UNMIK balked at such a substantive transfer of competency
to the PISG. Ultimately USOP was convinced that getting on
with the resolution of the thousands of outstanding claims,
most of which do not involve serious legal issues, was a
higher priority than perfecting the process for rare appeals.


3. (SBU) The Housing and Property Directorate (HPD) is often
cited as one of UNMIK's most successful creations. Operating
out of offices in Pristina and Belgrade, HPD has resolved
more than 29,000 housing claims stemming from the Kosovo
conflict. Given the wholesale destruction or removal of
legal documents during the war, HPD did not undertake to
quiet titles but rather adopted a pragmatic approach to
sorting out possession rights. Title disputes, in any event,
were rare (and subject to jurisdiction of regular courts).
Much more typical were cases of displaced persons occupying
the homes of other displaced persons, a practical consequence
of the destruction of 150,000 homes and the displacement of
more than a million people.


4. (SBU) HPD dealt with residential properties only.
Non-residential claims are subject to jurisdictions of other
entities. More than 450 communist-era "socially owned
enterprises" (SOE) are passing through Kosovo's privatization
auction process under the administration of UNMIK's Kosovo
Trust Agency (KTA). Some 1,500 claims against the results of
that process, about a third sponsored by the Government of
Serbia, are pending before a special chamber of the Kosovo
Supreme Court established to hear them. KTA also administers
Kosovo's five public utilities (telephone, electricity,
railroads, airport, water). Some 17,000 claims for war
damages to real property, most against NATO, have been filed
in Kosovo courts, nearly all by Kosovo Serbs. Finally, OSCE
estimates that possession rights to 3,000 agricultural
properties and 8,000 commercial properties have yet to be
resolved or even addressed by competent authorities.



PRISTINA 00000299 002 OF 003


KPA: New Agency Thrown Right Into The Fray
--------------


5. (SBU) The KTA expects to fully privatize all marketable
SOE's by the end of 2006 and is well on the way to
incorporating all five public utilities in preparation for
eventual privatization. The courts are awaiting UNMIK
guidelines on the war damages claims. (NOTE. UNMIK evidently
is anticipating a NATO declaration of immunity from suit. END
NOTE.) KPA will then be left to deal with more than 16,000
cases comprising the 11,000 agricultural or commercial cases
and 5,400 cases of HPD-administrated residential properties
where no rent is currently changing hands.


6. (SBU) Most of the agricultural and commercial claims
involve property owned by displaced Kosovo Serbs and occupied
by Kosovo Albanians. Although anecdotal evidence suggests
that some of these tenants are paying rent, in funds or in
kind, the great majority are not. Similarly, virtually none
of the tenants in HPD-administered residential properties are
paying rent. HPD's resolution of these cases typically
involved the legitimization of the status of squatters who
already occupied the properties involved. For their part,
the absentee owners (mostly Serbs but a significant number of
Albanians) gain at most some degree of assurance that their
properties will not be destroyed by disgruntled evictees.


7. (SBU) HPD never intended its administration of residential
properties occupied by nonpaying tenants to be a permanent
arrangement. As KPA takes over these cases from HPD and adds
the 11,000 agricultural and commercial claims, the new
agency, per Regulation 2006-10, is obliged to institute some
variety of rental scheme. This is a potentially massive
undertaking for KPA and its staff of 14 internationals and
200 Kosovars, involving the setting and collection of rents
in a market still seriously disrupted by the demographic
upheavals and real property destruction of the war.


8. (SBU) Two important social factors further complicate any
KPA effort to institute a rental scheme. First, Kosovo is
ill-equipped to evict illegal tenants on a mass scale. The
HPD executed a small number of evictions, all with perimeter
police support and all after first making sure that evictees
had somewhere else to go. There is no assurance that Kosovo
Albanian society would tolerate the wide-scale eviction of
tenants who, although clearly in the wrong legally, were in
many cases themselves burned out of their homes during the
war. Second, agricultural production in Kosovo remains at
less than half its pre-war level. Getting land back into
full production is a social imperative demanding attention
even as the rights of individual land owners are recognized.


9. (SBU) COMMENT. The war resulted in nearly one million
displaced ethnic Albanians and huge damage to their homes. A
plan to compensate Serbs will therefore not be an easy
political sell, but the issue of property claims will not go
away. The HPD's pragmatic resolution of thousands of
property claims amounted to an invaluable service performed,
largely by the international community, for the benefit of
post war Kosovo. As Kosovo moves towards realization of its
final political status, the quick fix provided by the HPD to
keep Kosovo's housing stock from even further damage needs to
give way to a permanent arrangement. In addition, the
lawlessness that has characterized occupancy of a good
portion of Kosovo's agricultural and commercial properties
must be corrected. These are heavy responsibilities for the
new KPA, especially in that the ultimate result of these
efforts would be a significant redistribution of real
property and money in favor of the Kosovo Serb minority, many
of them living in Serbia. The shear number of such cases
means that implementation and enforcement of a rental scheme
will be a major undertaking. But fundamental rule-of-law
principles and the Standards for Kosovo program (septel)
demand that it be done. These are exactly the kind of
responsibilities any government must accept and the PISG
ostensibly seeks.

PRISTINA 00000299 003 OF 003


GOLDBERG