Germans Tackle Property Claims

IT'S a case of the Hatfields vs. the McCoys - German style. East and West Germans are feuding over property. As negotiators continue their talks this week to merge the German economic and social systems, the issue of individual and commercial property rights in East Germany has moved to center stage.

About 1 million West Germans claim rights to property in East Germany. In many cases, however, East Germans have been living on these lands or in these houses for 40 years. They are unlikely to give them up. In some places, this has led to confrontation, as West Germans pull up to their old homesteads and announce intentions to move back, sell, or raise the rent.

The many individual case histories, strong emotions, and differing ideologies involved make the property issue one of the most difficult to negotiate. Some politicians say it is a tougher subject than currency union, on which the two German governments agreed last week.

The main point is to bring East German ownership law in line with West German law to create incentive for investors. But this is difficult.

For instance, East Germans say they should have first dibs on property.

``Our property prices are simply laughable,'' says Regina Rosenfeld, a specialist in property law at the Justice Ministry in East Berlin. ``A lot of people are afraid that West Germany, with its stronger economy, will simply roll right over us.''

All over the country, East Germans are filing applications to buy houses and beat the West Germans before prices go up because of speculation. (Forty-two percent of housing here is privately owned, though in most cases, individuals own only the structure; the state owns the ground).

In April, the new East German government announced that changes in property ownership after Oct. 7 would be carefully reviewed.

To discourage speculators, it said that non-East Germans could have title to property but not be able to actually buy it until a 10-year wait, and then at the prevailing market prices, according to press reports.

The dispute over individual property rights between East and West arose from Germans who left this part of Germany. Those who left ``legally'' still have title to their property, but not use of it, says Joachim Knudel, a colleague of Ms. Rosenfeld's at the Justice Ministry in East Berlin. Those who fled ``illegally,'' i.e., without a permit, have no ownership rights, according to East German law.

While not all 1 million West Germans will follow up on their claims, ``it's clear that a large number of people will,'' says Richard Motsch at the Ministry for Intra-German Relations in Bonn.

Mr. Motsch, a specialist in the property issue, explained that about 500,000 West Germans have been compensated for the loss of their property in East Germany, though at rather low prewar valuations.

It's not as if palaces await most of these West Germans. Because of subsidized rents, which haven't changed in decades, houses and apartment buildings have fallen into ruin. Western owners also want compensation for the forced ruin of their property, says Mr. Knudel.

On the commercial side, East Germany has passed a law giving small businesses expropriated in 1972 back to their owners. But 95 percent of industry is in state hands. It has been decided to take these huge concerns and turn them into holding companies. But who would own the shares and whether East Germans would have a stake in this has not yet been decided.

So far, East Germany is holding fast to the Land Reform of 1947, in which plots greater than 10,000 acres, some belonging to Nazis, were confiscated by the state.

Although West Germany appears to be flexible on this issue, ``there are going to have to be some changes,'' Motsch says.