Minister: Balance struck between interests of apartment owners and protected tenants

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(Hina) - Construction and State Assets Minister Branko Bačić said on Wednesday that the law, which solves the long-standing problem of protected tenants, corrects the injustice towards apartment owners while at the same time enabling tenants to solve the housing issue.

We believe that we have found a balance between the interests of the owners and their rights to have their apartments returned to their ownership, and on the other hand, the protected tenants to enable them to solve the housing issue and the right to a home under favorable conditions, said Bačić on Wednesday, presenting the draft legislation for the execution of European Court of Human Rights decisions in the Statileo vs Croatia group of cases and a Croatian Constitutional Court decision.

Five sets of measures

The draft bill envisages the introduction of a total of five programme measures, and according to the latest data, there are 1,030 apartment owners and protected tenants.

When the register is established, the exact number and how much it will cost Croatia to solve the problem will be known, and the conservative estimated total cost of implementing the law is around €107 million, Bačić said in Parliament.

It is estimated that by applying this law, the state will pay off about 500 protected tenants, build about 500 apartments in Zagreb, Split, Rijeka and Dubrovnik that will be rented out or sold under favorable conditions to the tenants concerned, 300 apartments it owns will be rented out or sold to tenants and buy 100 apartments from the owners and sell them to tenants, he added.

The programme measures provide for a settlement between the parties on the apartment lease between the owner and the protected tenant, the immediate payment of the amount due to the protected tenant, which would compensate him, as well as the possibility for the protected tenant to move out of the existing apartment and move into an apartment owned by the state. At the same time, he would pay a minimum rent of €2 per square meter with the possibility of buying the apartment later, for about €1,000 per square meter for 20 years without interest, and if he pays all at once with a 20 percent discount.

The fourth set of measures  is for the state to buy an apartment from the owner, and a protected tenant would remain in it, who could then buy that apartment, and the fifth measure is the exchange of an apartment between the owner and the state, whereby a protected tenant would still live in that apartment, who would then could buy the apartment.

The implementation of the law should start in 2025, when owners will start being paid the market rent instead of protected rent until the apartment's status is finally resolved. At the same time, 50 percent of the market rent will be paid by the state and 50 percent by the protected tenants, and if it exceeds 25 percent of the total income of the tenants, the difference will also be covered by the state.

According to the law, compensation will be paid to the owners for the damage suffered since 1996, for example, €5,000 for an apartment of 50 square meters, and €10,000 for an apartment of 100 square meters.

The law also stipulates that the state pays moving costs to vulnerable groups of protected tenants (disabled, over 65 and tenants living on social welfare) in a fixed amount of €1,000.