Rental tenures in CROATIA Regulation and manegement of

Rental tenures in CROATIA Regulation and manegement of housing policies Ana Jakopič ISSBS ana. ostir@mfdps. si

TYPES OF RENTAL TENURES 1. MARKET rentals 2. PROTECTED TENANTS rentals (former housing rights owners) 3. SOCIAL and other rentals (war veterans) 4. Public rentals 5. POS programme rentals (the new RENTTO-BUY sheme)

RELEVANT LEGISLATION - 1996 Law on lease of apartments: – Market and protected tenants tenures – Articles 30 -49 dealing ONLY with protected tenants tenures – Decissions of Constitutional Court regarding protected tenants tenures’: – Decission number U-I-762/1996 (1998) – Decission number U-III-25429/2009 (2010) – 2005 Civil obligations Act – Rules and tenures of Local communities – 2013 POS Programme Rules on rent-to-buy sheme

MARKET RENTALS – 1996 Law on lease of apartments – 2005 Civil obligations Act

MARKET RENTALS n BLACK MARKET PHENOMENA: - tax evasion (non-registration to tax office) - subsidies (in some municipalities not a problem) Within the housing allowance system the local and regional authorities subsidize rents and housing costs of private rental housing, social housing-housing with protected rent and owner-occupied housing.

MARKET RENTALS – Written contract – Minimum requirements(Art 5 of Law on lease of apartments): • Parties to the contract • Description of the apartment or its part • Level of rent, how&when paid • Costs and its payment method • Persons living with the tenant • Period of tenancy • Manner in which the apartment maintained • Use of common area of the building • Manner in which the apartment is handed over

MARKET RENTALS n RENT CONTROL: - No rent control In cases of open-ended tenancy contracts a raise by the landlord can be proposed. The new rent level can amout to max 120% of average rent paid in the area, for similar apartment -

TERMINATION OF MARKET RENTALS • • • End of the time period Mutual agreement The tenant and the landlord have become the same person Perishing of the apartment CANCELATION TERMINATION

CANCELATION BY THE LANDLORD n Only in explicitly defined cases of major breaches defined in Law on lease of apartments (Art 20 of Law on lease of apartments) n Written explanation of reasons with the deadline for moving out, min. 15 days n Eviction procedure

TERMINATION BY THE LANDLORD “At fault” reasons (Art 19. of Law on Lease of apartments): 1. written warning to stop with the breach in 30 days 2. in cases of third time breach no warning is necessary 3. after the warning has not been respected, a termination period of 3 months is given in a written form (signed by the tenant, or send by registered mail) eviction procedure n Not “at fault” reasons, the landlord can terminate open-ended tenancy agreement in cases (Art 21. ) : 1. if he intends to move into the apartment himself or he has such an intention with his (grand)children, parents or other persons he is obliged to care for 2. has respected termination period of 6 months given in a written form (signed by the tenant, or send by registered mail) eviction procedure n

TERMINATION AND CANCELATION BY THE TENANT n n n Termination with a termination period: in cases of open-ended lease, 3 months termination period without stating reasons (Art 23 of Law on lease of apartments) Termination without the termination period: when the apartment is hazardous to health(Art 576 of Civil obligations Act) Cancelation: in cases when the apartment is not handed over, or is in an inappropriate state or becomes such during the lease (Art 553 and 555 of Civil obligations Act in acc. of Art. 12 of Law on lease of apartments)

PROTECTED TENANTS RENTALS Ex holders of housing right n Did not buy the apatment they were living in (socialy challenged or unable due to legal limitations) n Law on lease of apartments Art 7, Arts 30 -49 n Pay social rent n

PROTECTED TENANTS RENTALS n n Ex lege transformation to tenant-lessee status (former housing right is abolished) The tenant has the right to demand conclussion of the (open-ended) written tenancy contract with protected rent in 6 months time If the contract is not concluded the Court can pass a rulling instead Lack of written form does therefore not have the same consequences as in market rentals

PROTECTED TENANTS RENTALS -in privately owned apartments (15. 000 families) n COLLISION OF TWO PROCESSES : 1. 2. - Privatisation Denationalization (restitution) 1996 Law on lease of apartments abolishes HOUSING RIGHT No posibility to buy Former housing rights owners become PROTECTED TENANTS Pay SOCIAL RENT

PROTECTED TENANTSPRIVATE LANDLORDS n Problems where the Landlord is a private person emerge: – Protected tenants pay very low rent (the landlords have only nuda proprietatis) – The landlords often try to forcibly evict the tenants

SPECIAL PROTECTION IN PROCESS OF TERMINATION OF TENANCY CONTRACT – In accordance with Art 40/1 and 4 termination by the landlord is not possible for the reasons of Art 21 (Not “at fault” reasons), but only for reason when: 1. the landlord or his family members have an unsolved housing problem; receve social help or are older than 60 years 2. the tenant owns another apartment

SOCIAL HOUSING STOCK n 2 -3% of the whole housing stock n Privatisation- local authorities n POS Programme (State subsidised building of a new social housing stock trough non-profit entities)

SOCIAL RENTALS – According to Art 134 of the Constitution the Local authorities shall provide for housing n – Procedure: 1. Rules of local authorities 2. Public tenure, deadline for application and enclosing documents, selection of elegible applicants, administrative procedure In cases of emergency: alocation is possible without public tenure (Social services referal etc. )

SOCIAL RENT LEVEL OF RENT: protected rent defined by Croatian Government’s Decree

PUBLIC RENTALS n Some municipalities (Local authorities) n Defined with Local authority Rules, selection procedure n Rent level: between social and market n Protection for families with young children who are not eligible for social housing

POS PROGRAMME TENURES RENT-TO-BUY-SHEME n n n New Programme launched in 2013 The offered apartments are those not sold in the POS Programme (Government programme for affordable housing) POS Programme Rules The apartment can be bought in the time of the rent contract (60 months plus add. 36 months) Who can apply: – Croatian citizens – Do not own apropriate housing unit in the area – Min 30% of average salary per family member

PROBLEMS n n n n Very low % of social housing stock Very low quality of social housing stock Unrealistic legal provissions Black market phenomena in market rentals Non-existence of market rentals in coastal area during summer time Forcible evictions of protected tenants Lack of renovation of housing stock