Friday, September 20, 2013

Housing: making the illegal legal

Cuba’s Supreme Court has ruled that illegal home purchases made before the law changed in 2011 can now be legalized. 

This article in Cubaencuentro, with links to the court decision and order, explains the decision and the case based on an interview with the plaintiff.  (The writer, Mirella Betancourt, happens to be my wife.)

It boils down to the following: Decree-Law 288, which legalized home sales in 2011, made no provision for past home sales even though it is common for new laws to contain transitional measures that apply new norms to past actions. 

One such past action, which resulted in the court case, is the 1998 purchase of a Havana apartment for $5,000 by Bertha Bouly Wilson, a woman from Guantanamo province.  Owner Ricardo Andux Barrueta vacated the home, and Bouly moved in.  In a legal maneuver typical of the time, they married, Bouly explained, with the intention of divorcing so that the property could pass to her in the divorce settlement.  But the divorce did not take place, and in time Andux tried to regain possession of the home and to have Bouly evicted.  Bouly turned to the courts to try to obtain full legal ownership of her home.

She and her attorneys fought a losing battle for six years.  After the new real estate law went into effect in 2011, Bouly argued in Havana’s top provincial court that the law should not penalize her for a transaction that was illegal in 1998 but would be legal  today.  She lost that case too, with the court deciding that since the new law did not address past real estate transactions, it had no basis to rule in her favor.

Only by continuing to litigate, “with hope for a miracle,” she says, did she fend off eviction.  Her last option, an appeal to the Supreme Court, gave her a complete victory.  Its February 28, 2013 decision declared the 1998 transaction to be valid today.  It ordered that she and Andux appear before a notario (a local Ministry of Justice official) to have her name inscribed on the property title and that of Andux removed.  It also ordered that in the event that Andux would not appear, the provincial court would appear in his stead to ensure that the transfer of title proceeds.

In its decision, the Supreme Court noted that Decree-Law 288 included no provision about pre-2011 home sales, and it repealed old statutes that made those sales illegal.  That, the court said, left only one legal norm in place, the new one, making home sales legal – past, present, and future.  Hence the Supreme Court declared that the lower court was “in error” on legal grounds in deciding against Bouly, and had failed to act with a “sense of justice that should be most important in a judicial decision when one puts in relief the defenselessness of the appellant [Bouly] in face of the antisocial conduct of the seller [Andux].”

The court then issued a circular to all courts, law firms, and government housing offices to order that the same standards and procedures applied to Bouly be applied to all.  It thus converts its decision into law.

The independence of Cuba’s judicial system is certainly debatable, and indeed the courts are rooted in the Cuban executive.  But regardless of what one thinks of Cuba’s legal system, this decision has impact.

Cuba’s government has already been urging homeowners to update and register their titles.  Now a large number of homeowners previously shut out will have the opportunity to do so.  To the extent that they do, Cuba’s property registry will become more accurate and up to date.  For persons in Bouly’s position, a clear and registered property title means security and protection – from a seller who took your $5,000 and then tries to take his house back, or from some other party, perhaps outside of Cuba, who might press a claim.  For the government, it broadens and consolidates what is one of its most popular reforms.

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