Foreigners as real property owners in the Republic of Croatia

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January 1, 2011 / Damir Kontrec

Abstract

This paper analyses the legislation regulating the issue of foreign natural persons and legal entities acquiring ownership over the real property in the Republic of Croatia, especially after the legislative amendments of February 1, 2009. It also underlines certain dilemmas arising in practice because of the various interpretations of the provisions of the Law on Ownership and Other Real Rights and the Agricultural Land Act, concerning the option of foreigners acquiring titles over agricultural land based on other legal provisions such as inheritance, law or a legal decision. It also considers the process of convalidation of the previously concluded contracts with regards to the purchase of the real property by foreign nationals and legal entities from the EU member States.

Keywords
foreign natural persons and legal entities, real property ownership, reciprocity, consent of the minister of justice, agricultural land, protected areas, contract convalidation.

I. Introduction

The Law on the Amendments to the Law on Ownership and Other Real Rights [1] of 1 February 2009 introduced certain changes with regards to foreign nationals and legal entities from the European Union (hereinafter referred to as: EU) member States acquiring the real property titles in the Republic of Croatia, originating from the provisions of the Stabilisation and Association Agreement between the Republic of Croatia and European Community [2].

The draft LA LO thus states the following:
On 29 November 2001, the Republic of Croatia concluded with the European Community and its member States the Stabilisation and Association Agreement (hereinafter referred to as: SAA) that entered into force on 1 February 2005.

Pursuant to Article 60/2. of the SAA, the Republic of Croatia assumed the obligation to, after the enforcement of the SAA, “ allow the nationals of the European Union member States to acquire real property in Croatia along with the full and purposeful application of the existing procedures, except for the areas and issues stated in Supplement VII“. (The Supplement exempts the agricultural land and the areas protected under the Nature Protection Act from the general rules on foreign nationals acquiring titles but does not mention forested areas and forest lands). The ability to acquire ownership over forests has been denied to foreign nationals after the enforcement of the Law on the Amendments to the Forestry Act (Official Gazette no. 13/02) i.e. since 16 February 2002.

According to the SAA, the Republic of Croatia has thus assumed to obligation to allow the nationals of the EU member States to acquire real property titles (apart from the agricultural land and protected nature areas) in the period of four years after the enforcement of the SAA (the deadline expires on 1 February 2009), having reserved the right to implement the existing legislation up to that date. At the same time, it has assumed the obligation to adjust its legislation in the sense of making the EU nationals equal to the Croatian nationals with regards to the acquisition and legal regime of the real property titles.

Making the nationals and legal entities from the EU member States equal with the Croatian nationals means that special preconditions (reciprocity and consent of the minister in charge of the judiciary affairs) on acquiring the real property titles in the Republic of Croatia have been deleted from the valid regulations, when it comes to the same nationals and legal entities. This means that these nationals, after 1 February 2009 when the Law enters into force, will acquire real property titles in the Republic of Croatia under the terms and conditions stipulated for the Croatian nationals as well (except for the exempt property and the real property subject to special regulations) i.e. only under the general and not under special conditions for acquiring the real property titles[3][4]

This paper will consider the novelties regarding the issues of foreign nationals acquiring real property titles in the Republic of Croatia but will also warn about the exceptions still in force. At the same time, it will underline the dilemmas arising in practice with regards to certain LA LO provisions, especially with regards to the agricultural land and the new Agricultural Land Act[5].

In this paper, we also deal with the convalidation procedure of the contracts concluded by the natural persons and legal entities from the EU member States with regards to buying the real property in the Republic of Croatia and involving the procedures initiated with the ministry in charge for obtaining a consent to acquiring real property titles in the Republic of Croatia.

II. Legal references

When speaking about the legal references on foreign nationals (foreign natural persons and legal entities) acquiring real property titles, one has to, first and foremost, refer to the Constitution of the Republic of Croatia[6], stating expressly in Art. 48. para. 3 that a foreign national may acquire a real property title under the terms and conditions stipulated by lay while para. 4 guarantees the right to inherit.

The fundamental law regulating the issue of foreign nationals acquiring the real property titles in the Republic of Croatia is the Law on Ownership and Other Real Rights[7], stipulating in the provisions of Articles 354 to 358 the basic rights regarding the acquisition of the real property title by foreigners.

An important legal source is the legislation limiting the option of foreigners to acquire the real property title in the Republic of Croatia such as the Nature Protection Act[8], or rather ALA.

The Law on Resolving the Conflict between the Laws and the Regulations of Other Countries in Certain Issues[9], and the Law on Croatian Citizenship[10], can be included among the legal references along with the Law on the Ratification of the Stabilization and Association Act between the Republic of Croatia and the European Community and Its Member States, the Law on Implementing the Stabilization and Association Act between the Republic of Croatia and the European Community and Its Member States and the Interim Agreement on Trade and Trade-Related Matters between the Republic of Croatia and the European Community.

III. Concept of a “foreign national” according to the Law on Ownership and Other Real Rights

III.1 Foreign natural person

Pursuant to Article 355, para. 1, of the LO, a foreign natural person denotes, from the legal point of view, a person not having the citizenship of the Republic of Croatia as well as a person without a citizenship i.e. stateless person. According to paragraph 2 of the same Article, persons not having the citizenship of the Republic of Croatia but being expatriates from the territory of the Republic of Croatia or their descendants are also not considered foreign nationals, provided that the State administrative body in charge of passing the decisions on the citizenship has determined that they fulfil the preconditions for acquiring the citizenship of the Republic of Croatia.

A person, having a citizenship of some other country and the Croatian citizenship, is also not considered a foreigner. From the point of view of the LO, such persons are considered Croatian nationals.

III.2. Foreign legal entity

As for the foreign legal entity, it denotes, pursuant to Art. 355, para. 3, of the LO, a legal entity having a registered seat of business outside the territory of the Republic of Croatia, unless otherwise stipulated by law. The afore-mentioned should be considered in conjunction with the provision of Art. 611. of the Company Law[11] stipulating in paragraph 1 that, for the purpose of the CL, a company properly established according the laws of the country where it has a registered seat outside the Republic of Croatia is considered a foreign company while, according to paragraph 2. of the same Article, for the purpose of the CL, a natural person having this attribute recognized outside the Republic of Croatia in the country where it has a registered set of business and running an enterprise conducting business in the Republic of Croatia is considered a foreign tradesman[12].

IV. Reciprocity and consent by the minister in charge of the judiciary affairs as a precondition for acquiring ownership over the real property[13]

IV.1. Reciprocity

When speaking about the reciprocity in acquiring the real property titles, we have to underline that the general rule is that the foreign natural persons and legal entities can, under the precondition of reciprocity, acquire the real property titles in the Republic of Croatia on the basis of the inheritance right (Art. 356, para. 1 of the LO). Paragraph 2 stipulated, on the other hand, that foreign natural persons and legal entities can, under the precondition of reciprocity, acquire real property titles in the Republic of Croatia if the corresponding consent is issued by the minister in charge of judicial affairs in the Republic of Croatia. The term „reciprocity“ as related to foreigners acquiring certain rights denotes a situation in which the organs of a certain country acknowledge a certain right to a foreigner under the condition that a foreign country whose citizen the foreigner in question is treats the Croatian citizens in the same or similar way[14].

Simply put, reciprocity means that a citizen or legal entity having the seat in another country can acquire real property titles in the Republic of Croatia under the condition that the Croatian citizen, or a domestic legal entity, can acquire the same real property title in that other country.

IV.2. Consent by the minister in charge of the judiciary affairs

It has already been said that the very existence of the reciprocity does not suffice for the foreigners to acquire ownership in the Republic of Croatia but that it is necessary for the minister in charge of the judiciary affairs to issue consent for the acquisition of titles (Art. 356, para. 2 of the LO) whereby the afore-mentioned consent constitutes an administrative act (Art. 356, para. 3 of the LO)[15].

Also important is the provision of Art. 357 of the LO. Paragraph 1 thus stipulates that, if consent from the minister in charge of judicial affairs of the Republic of Croatia is required to acquire the real property titles, then the legal affair aimed at acquiring this title is null and void without the consent of the minister in charge of the judiciary affairs[16]. Paragraph 2 defined that the minister in charge decides on giving a consent to acquiring a title at the request of a foreign national intending to acquire a title over a certain real property or of a person intending to alienate such a property while according to paragraph 3 of the same article, a foreign national who has been denied a consent to acquire a real property title cannot repeat the request for obtaining a consent to acquire a title over the same real property before the expiration of five years from the date of the submission of the rejected request.

Therefore, the situation remained the same for the nationals and legal entities having a seat in the countries that are not EU member States so in order for these foreign natural persons and legal entities to acquire a real property title it remains necessary to meet the reciprocity condition i.e. there must be a consent from the minister in charge of judiciary affairs for the real property title acquisition[17].

The LA LO of 2008 has not amended Art. 358 of the LO describing the real properties in exempt areas. Paragraph 1 stipulates that a foreign national cannot become the owner of a real property located in an area that has been declared, for the purpose of protecting the interests and security of the Republic of Croatia, an area in which foreign nationals cannot acquire titles, unless other specified by law. Paragraph 2 further stipulates that the foreign national, having acquired a real property title before a certain area in which the real property is located was declared an area under paragraph 1 of this article, ceases to have the right over this real property while having the right to compensation according to the expropriation regulations whereby according to paragraph 3 if a foreign national is unable to acquire in the area described in paragraph 1 of this article, to acquire the title of the real property otherwise acquired by inheritance, that person has the right to a compensation according to the expropriation regulations, as though the real property has been alienated from the person according to the expropriation procedures[18].

Until the novelties introduced by the LO of 2008, the LO stipulated that the foreigners cannot be owners of the real properties in the so-called exempt area (Art. 358) while other regulations defined that the foreigners cannot be owners of the agricultural land, forests and forest lands and real properties in protected areas.

With regards to the agricultural lands, this prohibition was introduced into our legal system by the Law on Amendments to the Agricultural Land Act[19] that entered into force on 7 September 1993. With regards to the forest and forest lands, such a prohibition was introduced by the Law on the Amendments to the Forestry Act[20] that entered into force on 8 February 2002 while, with regards to the protected nature areas, the Nature Protection Act[21] of 1994 already stipulated the afore-mentioned prohibition. None of the above-mentioned laws encroached upon the earlier acquired titles of foreigners while, when it comes to inheriting, the provision of Art. 358, para. 3 of the LO might be applied. This provision states that if a foreign national cannot acquire a real property title otherwise acquired by inheritance in the area described in paragraph 1 of the same article, then he/she has the right to compensation pursuant to the expropriation regulations as if this real property had been alienated from him/her in the expropriation procedure.

V. Novelties related to foreign citizens and legal entities from the EU member States acquiring ownership over the real property

V.1. Citizens and legal entities from the EU member States as equal to the Croatian citizens and legal entities having seat in the Republic of Croatia with respect to acquiring ownership over the real property

It has already been stated that the Republic of Croatia has, by signing the SAA with the European Union, assumed the responsibility to equate the option of foreign nationals or legal entities from the EU member States to acquire the real properties with the Croatian nationals i.e. legal entities having the seat in the Republic of Croatia within four years from the date when the SAA entered into force and this deadline expired on 1 February 2009. This was one of the main reasons for the novelties introduced by the LO of 2008[22] It should be underlined here that the SAA is an international agreement and is, by the force of law, superior to the domestic regulations and has the priority of enforcement.

The stated changes are contained in the new Articles 358. a and 358. b. Art. 358. a paragraph 1. of the LO states that the provisions of Articles 254 through 358 of the LO do not apply to the citizens and private nationals from the EU member States and that these persons (foreigners) acquire real property titles under the preconditions valid for the citizens of the Republic of Croatia and legal entities having a seat in the Republic of Croatia when acquiring titles. This actually means that all regulations valid for domestic natural persons and legal entities apply also to this category of foreigners, as related to acquiring the titles, provided that, in respect of the provision of Art. 114, para. 1 of the LO, a title can be acquired based on a legal transaction, a decision of the court or other authority, by inheritance or by law. This further means that the foreigners (citizens and legal entities from the EU member States) would acquire a real property title based on a legal transaction, that it suffice for a contract to be concluded and the seller’s signature to be notarized and that the registration is completed in the land registers (titulus and modus – Art. 119. of the LO[23] ). The decision of the court in the sense of the provision of Art. 126, para. 2 of the LO determines that a title is acquired the moment when the decision of the court becomes valid or the decision of another authority becomes final, if not stipulated otherwise by law, and is not derived from the objective that underlines the decision in question. Pursuant to Article 128, para. 1 of the LO, the heir acquires a title over inherited items at the moment of the will opening, if not otherwise stipulated by law, while the provision of Art. 129, para. 1 of the LO, the title is acquired by law at the moment when the legal preconditions for acquiring the title are met.

V.2. Exempt real property

It should be said that the foreigners from the EU member States are not fully equal with the Croatian citizens or the legal entities having a seat in the Republic of Croatia, when it comes to acquiring real property titles in the Republic of Croatia. Namely, pursuant to Article 358a, paragraph 2 of the LO, the provisions of paragraph 1. of the same Article, determining that the citizens and legal entities from the EU member States are equal with the citizens of the Republic of Croatia and the legal entities having a seat in the Republic of Croatia when it comes to acquiring real property titles, do not relate to the real properties in the following exempt areas:

agricultural land determined by a separate law,
protected nature areas according to a separate law.

V.2.1. Agricultural Land

In the SAA and Supplement VII, the prohibition of foreign nationals and legal entities from the EU member States to acquire titles over the real properties that are agricultural land or protected nature areas, as defined in the Nature Protection Act, still remains while the prohibition has been lifted for the forests and forest lands[24].

Pursuant to Article 3 of the NPA, the agricultural lands, in the sense of this Act, are considered the following agricultural areas: plowfields, gardens, meadows, pastures, orchards, olive groves, vineyards, fishing ponds, thickets and swamps as well as other lands that can be agriculturally exploited. Paragraph 1 of Article 2 of the same Act stipulates that the agricultural land is a property of interest to the Republic of Croatia and enjoying its personal protection while paragraph 2 stipulates that the land under paragraph 1 of the same article cannot be acquired through a legal transaction by the foreign nationals and legal entities, unless otherwise stipulated by an international agreement.

It should be emphasized that, according to the earlier Agricultural Land Act [25], there was no difference between the legal foundation for acquiring a title since the Act in Art. 1, para. 3, expressly states that foreign legal entities and natural persons cannot be title holders over agricultural land.

This very point caused a dilemma that will be dealt later on as to whether this means that today the nationals and legal entities from the EU member States can acquire real property titles over agricultural land based on a court decision, law or inheritance, i.e. other legal foundations of acquiring that differ from the legal transaction. The afore-mentioned issue especially arises as disputable in the inheritance procedures that are currently conduced at public notaries’ offices.

On the other hand, the issue arises as to the manner in which a public notary or a land registration court can be certain that the land in question is actually agricultural land and whether it suffices for it to determine the manner of using the real property according to the cadastre or the land registry. In practice, it often happens that a real property is registered in the land register as a plowfield i.e. as agricultural land and that a house has been erected on that real property so it can hardly be called agricultural land[26].

Since Art. 358a, paragraph 2, of the LO expressly stipulates that the provision of paragraph 1, whereby the nationals and legal entities from the EU member States are equal to the citizens of the Republic of Croatia and the legal entities having seat in the Republic of Croatia when it comes to acquiring the real property titles, does not apply to the real properties in the exempt areas i.e. the agricultural land defined by a separate law, and that is the NPA, we are free to conclude that the NPA prohibits the foreigners (and even the nationals and legal persons from the EU member States) to acquire real property titles over agricultural land based solely on a legal transaction. This would further imply that other legal foundations for acquiring real property titles are allowed i.e. that the foreigners might acquire titles over agricultural land based on other legal premises.

Hereby a relevant piece of information on whether a certain real property is agricultural land or not should be a certificate (statement) by a local government body in charge of urban and physical planning (a large city or county office) stating that the real property is located within the perimeter of a construction area provided for in urban plans. It would be necessary to enclose this piece of information to the registration application, as a proof that the real property constitutes a construction area, to the relevant land registration court i.e. it should be determined by a public notary as a court proxy during the inheritance procedure.

V.2.2. Protected nature areas

The second category of the real properties over which the nationals and legal entities from the EU member States cannot acquire real property titles are protected nature areas. The protected nature areas are stipulated by Art. 8. para. 1. para. 1. of the NPA stating that the protected areas are strict reserve area, national park, special reserve area, nature park, regional park, nature monument, significant landscape, forest park, landscaping monument.

Article 113, paras. 1 and 2 of the NPA stipulates that the real property titles in protected areas can be acquired under the conditions defined by this Act and other laws and that the foreign legal entities or natural persons cannot acquire real property titles in the protected areas unless otherwise stipulated by an international agreement.

It should be pointed out that the NPA does not differentiate with regards to the legal foundation for foreigners acquiring real property titles, as is the case with the ALA, whereby we deduce that the foreigners and the nationals and legal entities from the EU member States likewise, cannot acquire real property titles over protected areas under any legal premise.

In this segment, a special problem can be caused by the fact whether the real property in question is marked as a protected area in the land register or in the cadastre. Since the new Law on State Survey and Real Property Cadastre stipulates the obligation to associate the information on legal regimes to the cadastral parcels (Art. 36, para. 5)[27] encompassing the protected areas so it is therefore important to double-check whether the cadastral records contain the information on a special legal regime.

V.3. Rights of foreigners with regards to the application of Art. 358. para. 2. and 3 of the Law on Ownership (LO)

Article 358b, para. 1 of the LO states that the ownership over a real property which has cased based on Art. 358, para. 2 of the LO as well as the real properties over which a foreign national cannot acquire a title through inheritance based on Art. 358, para. 3 of the LO become property of the Republic of Croatia who is obliged to pay out a compensation. The heir, in this case, enjoys the right to compensation pursuant to the expropriation regulations, based on a valid inheritance decision stating this right. Paragraph 2 of the same article stipulates that the liens and other real right of insurance charging the real property also charge the compensation due to the heir while according to para. 3 of the same article, other real rights of third parties charging the real property do not cease. Para. 4 actually extends the option to apply the afore-mentioned article also to other real properties that the foreign nationals are unable to acquire through inheritance.

This rectifies, to a large extent, the dilemma regarding the issue of who acquires in this case a title over such real property and who is obliged to pay the compensation. However, this also precludes the option of, for example registered mortgages to „go null and void“ since the liens and other real rights of insurance charging the real property acquired by the heir in the case that a title of a foreign national is rescinded or if the foreign national cannot inherit a certain real property. It is also understandable that other real rights, such as servitudes, do not cease to be because they charge the real property.

VI. Convalidation of previously concluded contracts

Another problem arises with regards to the convalidation of previously concluded contracts. The very term “convalidation“ (derived from the Latin word „convalescere“ which means to strengthen, refresh[28]) means further strengthening of the null legal transaction by meeting the missing formalities.

The LA LO in its transitory and final provisions of Articles 5 and 6 states the rules on convalidation of previously concluded contracts. Thus, Article 5 stipulates that the procedures, initiated for the purpose of obtaining a consent for acquiring the real property titles pursuant to Articles 356 and 357 of the LO for the benefit of the nationals and legal entities from the EU member States that had not been validly completed by the moment this Law entered into force, will be terminated ex officio.

This would actually mean that the contract that was thus far null and void because it lacked the necessary consent from the minister of justice to acquire a title, would thereby cease to be null and void and start to produce all legal effects which, in turn means that the acquirers have a legal foundation to acquire titles.

Article 6 of the LA LO defines that a legal transaction aimed at acquiring a real property title in the Republic of Croatia bought by a citizen or legal entity from the EU member State before the enforcement of this Law, would be convalidated if executed and if the general preconditions for the legality of such a transaction are met, provided that this does not refer to the real property from Art. 358a, para. 2 of the LO.

The question that needs to be raised here is the manner in which the convalidation itself will be implemented, whether it is necessary to initiate a separate non-litigation procedure in which the court will decide whether the contract has been executed, whether the real property in question has been exempt or not or whether it will be decided by a land registration court where the acquirer will submit the application along with the deed serving as the basis to acquire the real property title and a certificate from the administrative body in charge that the real property is not located in exempt areas.

Personally we advocate the second option. Namely, the earlier null-and-void contact has ceased to be null and void due to the fact that the LO has been amended so it seems unnecessary to us to force the parties to initiate a new non-litigation procedure in which the court would determine whether all preconditions to acquire a title have been met. The party can easily prove whether the procedure initiated earlier to obtain consent has been terminated by submitting a relevant decision of the Ministry of Justice. This very fact proves that the responsible administrative body has terminated the procedure for giving consent ex officio in accordance with Art. 5 of the LA LO.

The acquirer can obtain the certificate on whether a real property is agricultural land or not from the responsible administrative body (in charge for urban planning and construction) stating that a certain parcel is within the perimeter of a construction zone or outside it. The responsible cadastral office might issue a certificate as to whether a real property is in the protected area or not since the responsible cadastral office keeps records on the legal regimes over real properties. These certificates should, in our opinion, contain the data as to whether a certain real property was agricultural land at the time of the contract signing or rather whether a certain real property was in the protected area.

VII. Final remarks

The LA LO implemented the provisions of the SAA concluded between the Republic of Croatia and European Union which has enabled the citizens and legal entities from the EU member States to acquire the real properties under the same conditions as the citizens of the Republic of Croatia or the legal entities having a seat in the Republic of Croatia. This means that in practice we have two categories of foreigners with regards to acquiring a real property title in the Republic of Croatia whereby other foreigners, outside the European Union are still subject to the reciprocity rule and the need to obtain consent to acquire a title from the minister of justice.

The afore-mentioned easier acquisition of titles for the citizens and legal entities from the EU member States should allow for greater foreign investments whereby it is necessary to ensure as soon as possible that the land registers will be completely authoritative for the legal status of the real properties and that everyone will enjoy the protection with regards to the trust and truthfulness of the land registers. Given the current global recession and the downslide of the real property market, it is to be seen whether and in which scope the afore-mentioned legal resurveys will influence the growth in the foreign nationals and legal entities from the EU member States buying the real property in the Republic of Croatia.

Bibliography

Books and articles

Bagić S., Real Rights of Foreigners, magazine no. 4430-4431, Zagreb, 1996
Belaj V., Changes related to foreigners acquiring real property titles in the Republic of Croatia, Informator magazine no. 5728, Zagreb, 2009
Gavella N., Josipović T., Gliha I., Belaj V., Stipković Z., Real Property Laws, Volume I, Official Gazette, Zagreb, 2007
Jelčić O., Real properties as objects of inheritance by foreign nationals in the Republic of Croatia (especially on the inability of foreigners to inherit exempt real property, in Jelčić O., Končić A.M., Kontrec D., Mihelčić G., Pahić D., Sarvan D., Real Properties – Novelties of Legislation and Practice, Novi informator magazine, Zagreb, 2008, pp. 183-205
Jelčić O., Foreigners as real property title holders, Collection of Papers of the Law School of the University in Rijeka, Vol. 23, no. 1, 2002
Josipović T., Transposition of the real property EU legislation into the Croatian legislation, in Baretić M., Jelčić O., Josipović T., Kontrec D., Pahić D., Petrović S., Sessa Đ., Real Properties as Objects of Property Rights – EU legislation transposition, disposition of real properties, cadastre, land registers, mediation, Official Gazette, Zagreb, 2008
Klaić B., Glossary of Foreign Terms, Nakladni zavod Matice Hrvatske, Zagreb, 1988
Kontrec D., Public notary as a court proxy in inheritance procedures, in the book entitled „Competencies of public notaries in the inheritance procedure, mediation procedure and real property transactions in the countries of South-Eastern Europe, IRENE and the Croatian Chamber of Public Notaries, Zagreb, 2008, pp. 149-163.
Tomljenović V., Foreigners acquiring real property titles, Collection of Papers of the Law School of the University in Rijeka, v. 19, no. 2., 1998.
Žuvela M., Foreigners acquiring the real property titles, Current affairs of the Croatian legislation and practice, Annual Report 13, Organizator magazine, 2006

Legal references

Croatian Constitution, Official Gazette nos. 56/90, 135/97, 8/98, 113/00, 124/00, 28/01, 41/01, 55/01.
Law on State Survey and Real Property Cadastre, Official Gazette
Croatian Citizenship Act, Official Gazette nos. 53/91, 70/91, 28/92, 113/93, 4/94.
Law on Amendments to the Agricultural Land Act, Official Gazette no. 79/93.
Law on Amendments to the Law on Ownership and Other Real Property Rights, Official Gazette no. 38/09.
Law on Amendments to the Forestry Act, Official Gazette no. 13/02.
Expropriation Act, Official Gazette nos. 9/94, 35/94, 112/00, 114/01, 79/06.
Agricultural Land Act, Official Gazette nos. 66/01, 87/02, 48/05, 90/05.
Law on Agricultural Land, Official Gazette no. 152/08
Law on Ratification of the Stabilisation and Accession Agreement between the Republic of Croatia, European Community and all its member States, Official Gazette – International Agreements no. 14/01.
Law on Enforcing the Stabilisation and Accession Agreement between the Republic of Croatia, European Community and all its member States and the Temporary Agreement on Trade and Trade-Related Matterse from the Republic of Croatia and European Union, Official Gazette – International Agreements no. 15/01.
Law on Resolving Conflicts between the Laws and the Regulations of Other Countries in Certain Relations, FRY Official Journal nos. 43/82, 72/82, Official Gazette no. 53/91, 88/01.
Law on Ownership and Other Real Rights, Official Gazette nos. 91/96, 68/98, 137/99, 22/00, 73/00, 114/01, 79/06, 141/06, 146/08, 38/09.
Company Law, Official Gazette nos. 111/93, 34/99, 121/99, 52/00, 118/03, 107/07.
Nature Protection Act, Official Gazette nos. 30/94, 72/94.
Nature Protection Act, Official Gazette nos. 70/05, 139/08.

Footnotes

[1] Official Gazette, no. 146/08, hereinafter: LA LO.

[2] The Republic of Croatia concluded the Stabilisation and Association Agreement (hereinafter referred to as: SAA) with the European Community and all its member States on 29 October 2001 in Luxembourg. The Law on Ratification of the Stabilisation and Association Agreement between the Republic of Croatia, European Community and all its member States was published in Official Gazette – International Agreements no. 14/01 while the Law on Enforcing the Stabilisation and Association Agreement between the Republic of Croatia, European Community and all its member States and the Interim Agreement on Trade and Trade-Related Matters from the Republic of Croatia and European Union were published in Official Gazette – International Agreements no. 15/01.

[3] Available at www.sabor.hr

[4] More details on the need to adjust the Croatian legislation in the field of the real property in article by T. Josipoviæ, Adjustment of the Croatian legislation on the real property to the EU legislation, in Baretiæ M., Jelèiæ O., Josipoviæ T., Kontrec D., Pahiæ D., Petroviæ S., Sessa Ð., Real Properties as real property rights objects – transposition of the EU legislation, real property disposition, cadastre, land registers, mediation, Official Gazette, Zagreb, 2008, p. 3-29.

[5] Official Gazette, no. 152/08, hereinafter: ALA.

[6] Official Gazette, no. 56/90, 135/97, 8/98, 113/00, 124/00, 28/01, 41/01, 55/01, hereinafter: Constitution.

[7] Official Gazette, no. 91/96, 68/98, 137/99, 22/00, 73/00, 114/01, 79/06, 141/06, 146/08, 38/09, herinafter: LO.

[8] Official Gazette, no. 70/05, 139/08, hereinafter: NPA.

[9] Official Journal of the FRY no. 43/82, 72/82, Official Gazette no. 53/91, 88/01, hereinafter: LRCC.

[10] Official Gazette, no. 53/91, 70/91, 28/92, 113/93, 4/94.

[11] Official Gazette, no. 111/93, 34/99, 121/99, 52/00, 118/03, 107/07, herinafter: CL.

[12] The same point of view can be seen in the article by S. Bagiæ, Real Rights of Foreigners, Informator magazine, no. 4430-4431, 1996., Zagreb, p. 18.

[13] See more details on foreigners as title holders in Gavella N., Josipoviæ T., Gliha I., Belaj V., Stipkoviæ Z., Stvarno pravo, Volume I, Official Gazette, Zagreb, 2007, pp. 391-398.

[14] Tomljenoviæ V., Foreigners acquiring real property titles, Collection of Papers of the Law School of the University in Rijeka, v. 19, no. 2, 1998. pp. 529-544.

[15] Žuvela M., Foreigners acquiring the real property titles, Novelties in the Croatian legislation and practice, Annual Report 13, Organizator magazine, 2006, pp. 1-52. The afore-mentioned article under 40. analyses the issue of the legal nature of the consent of the Minister of Justice stating the following: „The legal nature of the Minister’s consent, given that it is stipulated (Art. 356/5 and 357/5) that the stated consent is not an administrative act, was discussed on several occasions before the RoC Constitutional Court, and the decision of 9 February 2000, no. U-I-1094/99 this provision was rescinded. Thereby the act of the Minister related to passing the decision on giving a consent to the legal affair has been recognized the character of an administrative act with all the consequences derived therefrom. Thus a situation has been created whereby the procedure of giving a consent to the legal affair has been given such a legal protection as exists against any administrative act, including also the protection in the case of the administration silence and involving also the court protection – it opens up a possibility of conducting an administrative dispute against the final administrative act and against the administration silence. The last amendment to the LO (LA LO, 2006) introduced into the Law the express provision that the consent of the Minister of Justice is an administrative act (Art. 3.)“.

[16] It has to be underlined that the practice of a great number of land registration courts after the adoption of the LO contained the provision that, in the event when a foreigner has bought a real property in the Republic of Croatia, a flag was registered at the request of the buyer which was an erroneous practice because no conditions for registration or for registering a flag have been met on the basis of the contract thus executed that was null and void. Fortunately, such practice has been changed in the past few years.

[17] Jelèiæ O., Foreign nationals acquiring real property titles, Collection of Papers of the Law School of the University in Rijeka, vol. 23, no. 1, 2002. pp. 243 -270.

[18] In the Republic of Croatia, the expropriation is regulated by the Expropriation Act, Official Gazette nos. 9/94, 35/94, 112/00, 114/01, 79/06.

[19] Official Gazette, no. 79/93.

[20] Official Gazette, no. 13/02.

[21] Official Gazette, no. 30/94, 72/94.

[22] Belaj V., Changes related to foreigners acquiring real property titles in the Republic of Croatia, Informator magazine no. 5728, Zagreb, pp. 1-2.

[23] Article 119. of the LO reads as follows: A real property title is acquired upon the legally provided land registration of the title by the person acquiring it based on the properly expressed will of the previous owner aimed at transferring his/her title to the person acquiring it, if not otherwise stipulated by law (Art. 1.). The provisions of this Law on acquiring a real property title by land registration is applied in the relevant manner also to the changes and cessation of titles based on lega„ transactions (Art. 2.). The manner of establishing and keeping the land registers and the manner of land registration are provided for by the land registration provisions (paragraph 3.).

[24] It should be emphasized that the foreigners have been denied the option of acquiring ownership over forests only after the SAA was signed i.e. after the Law on Amendments to the Forest Act entered into force (16 February 2002) but, since the SAA is an international agreement not providing for this prohibition, the SAA prevails over domestic laws so the afore-mention prohibition is no longer valid.

[25] Official Gazette, no. 66/01, 87/02, 48/05, 90/05.

[26] For more details see the dilammas regarding the inheritance procedure at public notaries, articles:
Jelèiæ O., Real properties as inheritance objects of foreign nationals in the Republic of Croatia (especially the inability of foreigners to inherit exempt properties, in Jelèiæ O., Konèiæ A.M., Kontrec D., Mihelèiæ G., Pahiæ D., Sarvan D., Real Properties – Current Legislation and Practice, Novi informator magazine, Zagreb, 2008, pp. 183-205.;
Kontrec D., Public notary as a court proxy in inheritance procedures, in the book entitled „Competencies of public notaries in the inheritance procedrue, mediation procedure and real property transactions in the countries of South-Eastern Europe, IRENE and the Croatian Chamber of Public Notaries, Zagreb, 2008, pp. 149-163.

[27] Official Gazette, no. 16/07, 152/08, hereon LSSRPC. Article 36. para. 5. of the LSSRPC defines as follows: The data about the following special legal statuses can be associated to a cadastral parcel: