New Property Rights in Cuba? Sort of…

This past April Raul Castro presided over the 6th Congress of the Communist Party of Cuba. Originally these planning events were scheduled to be held every five years, but the Castros either lost count or lost interest in engaging the Cuban people and a while ago fell several five year periods behind. Anyway…

The simple holding of this event was reported on by many media outlets as a sign of the Castros looking to reform what is a staggeringly bad economy.

But as I have often wrote in my blog at www.mojitonovel.com, Cuba is an isle of lies. Old people lie because they have always had to, to survive. Young Cubans lie because it's the only thing they know. And the Castros lie just about every time they move their lips, because they always have.

At the Congress, Castro the younger made a series of announcements that, if they could be taken at face value, would indicate a drastic lean toward an open market economy for the emerald island of the Caribbean.

But this is Cuba, where nothing is as it seems.

The promised reforms included a private business development initiative, a transition of leadership in Cuba's institutions, more opportunities for blacks and, of interest to the participants in CREOPoint, the right to buy and sell real estate.

President Raul Castro makes the new property ownership and transfer initiative sound easy. And in military dictatorships, usually government policy is easily implemented since there’s no opposition. But in the case of real property, there are legal barriers that a sweep of a dictator’s magic wand cannot eliminate.

Currently all ownership of property in Cuba is ultimately controlled by the Interior Ministry and the Cuban Army. Which really means the Castro family. Cubans are given rights to live in houses based upon their place in the political hierarchy, their history of sacrifice for the revolution, or as a survivor's benefit.

Which is a problem. Ask a million or so people living south of the Florida Panhandle and north of the Straits of Florida. The property that their family left behind a half century ago still belongs to them. Period.

If the Castros ever die and Cuba "normalizes" its relationship with the USA, then it can be expected that almost all of the formerly freehold property will be pursued for compensation or return by ex-patriot Cubans.  Meanwhile, the family members who have occupied this property for two generations can be expected to not be in a very big hurry to move out when the time comes.

Jose Palli, a property title expert in Miami of Cuban descent, has written a series of excellent articles on these ownership legal issues in Cuba (http://wwti.net/newproprightsincuba.html). He points to the historical efficacy of the land registry system in Cuba, pre-Castro and suggests that close ties with Spain may lead to rapid re-establishment of a land registry system.

His view (as expressed in an email exchange) is that the ultimate resolution to getting clear title to property in post-Castro Cuba will be found in laws there that existed pre-Castro. My view is that the American demand for resolution will be for litigation under USA laws. I guess we’ll see. Both of us agree (I think) that the resolution will not be cheap and it will not be easy.

Brian French is a consultant in Toronto.