Government amends Lease of Flats Act

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The government on Thursday tabled draft amendments to the Lease of Flats Act in order to secure a fair balance between the interests of landlords and protected lessees, Construction Minister Predrag Stromar said at the cabinet's meeting in Zagreb.

Thus, Croatia is remedying the situation from 1998 in a fair and viable manner, and ensuring a fair balance between the opposing interests of landlords (flat owners) and protected tenants (lessees) with the help of the active role of the authorities, the minister said.

Under the legislation, the landlords will be given a specified date when their property is to be vacated for them to use it freely and the protected rent will be gradually raised within five years of the amended act's going into force.

After the expiry of their status as protected lessees, those tenants will be eligible, over a period of five years, to a state subsidy as assistance for payment of the lease as regulated by the market, also taking into consideration the surface area of the leased property and financial status of the person eligible for this type of subsidy.

The government intends to set aside HRK 40.5 million for that purpose and local authorities an additional 2.7 million, according to Stromar's explanation.

The protected lease is to be gradually raised as of 1 July 2018 until 30 June 2023, when the rights of protected tenants to protected rent cease to exist. They are, however, entitled to preemptive rights as of 1 July 2023.

The amended legislation also removes risks for Croatia stemming from the Statileo vs. Croatia case before the European Court of Human Rights in 2014.

In that case, the Court unanimously decided that the rights of the applicant Sergej Statileo, the landlord of a flat in Split, were violated and the court found that in that case Article 1 of the Protocol No. 1 of the Convention on Human Rights was violated.

Croatia was told to pay the applicant's heir EUR 10,550 in respect of pecuniary damage and non-pecuniary damage and in respect of costs and expenses.

The applicant complained that he could not collect the adequate rent from the protected tenant in his flat.

In the explanation of the application, the European Court for Human Rights noted that on 5 November 1996 the Lease of Flats Act entered into force and such law "abolished the legal concept of the specially protected tenancy and provided that the holders of such tenancies in respect of, inter alia, privately owned flats were to become 'protected lessees' (zasticeni najmoprimci), see paragraphs 31 and 40 below)."

"Under the Act such lessees are subject to a number of protective measures, such as the duty of landlords to contract a lease of indefinite duration, payment of protected rent, the amount of which is set by the Government and significantly lower than the market rent; and better protection against termination of the lease."

EU Timber Regulation

The government also sent to parliament final bills of amendments to the law on the implementation of the EU Timber Regulation and the Contractual Relations Act to ensure the implementation of the relevant EU provisions.

Text: Hina