The Law On Croatian Real Estate

On 27th April 2009 a new law regulating the Croatian real estate industry was introduced. It regulates the conditions in which Croatian real estate agents are allowed to operate when selling property in Croatia. It is the first such law to be introduced in the country. Whilst the law is by no means perfect it has given greater credibility to the real estate industry as a whole and created greater accountability on the part of real estate agents working in the business. It has also given Croatian real estate agencies greater protection against client’s who do not fulfill their obligations according to the law.

Clearly if you are buying property in Croatia it makes sense to work with a licensed real estate agent / broker since they are working within the law and are expected to meet a certain level of professional standard. If they do not do so then you, as a Croatian real estate buyer, have the opportunity to report, complain or worst case sue the agency. Croatia real estate agencies are required by law to have liability insurance for damages claimed against them. The level of cover required is approximately €100,000. Whilst not sufficient for larger transactions, if clients have followed all necessary due diligence procedures when purchasing property in Croatia, the chance of problems arising are considerably diminished as is the likelihood of an agent being liable.

To obtain a real estate agency license, the agent must take and pass a written exam. The exam is quite demanding and requires considerable upfront study. It is therefore able to distinguish between the serious and not so serious. However, the relevance of the exam is questionable because it does little to equip students in their daily role as sales agents. It is overly technical and does not deal with more practical aspects of the job, in particular valuations. As the industry develops so too will the level of and relevance of the training required but in the meantime agents must learn the practical aspects of the job on the ground.
If you want to check whether an agency is legal, you can go to the Real Estate Agents Directory in the CCE (HGK). It is a public document and available for all to view. To see First Property Croatia in the directory go to this link
The following is the Law on Croatian Real Estate translated into English, if you have any questions please do not hesitate to contact us.


Article 21

By signing a Representation Agreement, the Broker’s obligations are in particular the following:

1.      Try to find and bring in contact with the client a person interested to make a property sale or purchase deal with this client;
2.      Inform the client of the average price of similar properties;
3.      Inspect all available documentation proving ownership or any other actual rights over the property in question and point out the following to the client:
·         Obvious flaws and possible risks involved with the unresolved Land Registry status of the property,
·         Registered actual or other rights over the property by a third party,
·         Legal consequences of failure to fulfill obligations to the third party,
·         Lack of building and/or usage permits according to special laws,
·         Circumstances of the obligation to apply pre-emption rights and restrictions in the legal system in accordance with special regulations,
4.      Undertake necessary actions in order to introduce the property to the market, place appropriate advertisements, and perform any other actions agreed upon in the Representation Agreement which would exceed usual presentation, and which can be charged separately as listed in advance in the Representation Agreement,
5.      Facilitate viewings of the property,
6.      Take part in negotiations and try to reach the conclusion of a sales-purchase contract, if this was agreed separately,
7.      Keep personal data of the client a business secret, as well as, upon a written order by the client, keep the information on the property, or connected to the property or the contract, a business secret.
8.      If the subject property is land, check the purpose of the land according to the regulations of development plans referring to this particular site.
9.      Inform the client on all circumstances which are important for the intended deal, and which are familiar, or must be familiar to the Broker.