New law to limit converting flats into commercial property

(Hina) - The government on Thursday sent a bill on the management and maintenance of buildings to parliament for its first reading, and the bill aims to limit the conversion of flats into commercial property in order to increase the supply and thus increase the affordability of flats for purchase and rent.

Deputy Prime Minister and Minister of Physical Planning, Construction and State Assets Branko Bačić said that this was the first time that a legal act defining the maintenance and management of multi-apartment buildings was being passed.

One of the proposed novelties is the restriction of the conversion of flats into tourist apartments and other forms of short-term rental, since this activity will require the consent of 80% of the building's co-owners.

This is primarily due to the fact that in Croatia, according to the data of the national statistical office and the HEP power company, 40% of the total housing stock is not being used for housing. The goal is to return those approximately 908,000 flats to their original purpose, Bačić pointed out.

"Instead of the flats being on the market, and then increasing the offer and making them affordable for our young families and fellow citizens, practically another activity is being carried out in them, which leads to an increase in prices per square metre for housing as well as rent," said the minister, who noted that this law was part of the measures of a new housing strategy that would be presented soon.

Also, the bill introduces, among other things, for the first time a community of co-owners as a legal entity.

According to Bačić, in the past 30 years or so, shortcomings have been observed regarding the required majority of co-owners deciding on certain activities and works on the management and maintenance of buildings, and now this required majority will be lowered, for example, when it comes to urgent and necessary repairs, investment in building maintenance, as well as the appointment of building managers. 

An important innovation is that all buildings with three floors or more will be able to install elevators under a special programme, with the state participating with 33% of the value of installing an elevator. Also, considering the condition of the facades in the centres and cores of the cities, the government's co-financing of the renovation of those facades will also be regulated by a special programme, also with a share of 33%.

Fines are also being introduced for flat owners who arbitrarily add to multi-apartment buildings, the minister said.

Too few inspectors for quality supervision of unauthorised construction

The government also sent amendments to the Building Inspection Act to the parliament, given that, as explained by Bačić, despite the involvement of the State Inspectorate, illegal, unauthorised construction was still present in Croatia on a large scale.

Given the number of inspectors, of whom there are no more than 70 in Croatia, it is impossible to have building inspectors intervene at the very beginning of all illegal construction. Therefore, the proposal is to include 882 communal wardens who are employed in the bodies of local government units in preventing and stopping illegal construction. They would be given certain powers to immediately intervene and stop the construction, collect the fine prescribed by law and inform the Inspectorate about everything, which will then react in accordance with the regulations, said Bačić.

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