New laws remove barriers to investment in construction

The government has submitted proposals for laws on construction, spatial planning, and construction inspection to parliamentary procedure from today’s session, aiming to simplify the administrative steps preceding construction and encourage investments in the construction sector.

Prime Minister Zoran Milanović believes that the new laws will eliminate barriers to investment and construction while maintaining order and enhancing Croatia’s overall competitiveness for investments.

Three new laws are expected to replace the existing Law on Spatial Planning and Construction. According to Minister of Construction and Spatial Planning Anka Mrak Taritaš, the main innovations brought by the new laws are public decision-making, transparency and simplicity of the system, strengthening accountability, and faster decision-making.

According to the government proposal, in the Law on Spatial Planning, location permits will remain only for exploitation fields of mineral raw materials, interventions requiring expropriation, and for large interventions in space such as the transformation of former military facilities into tourist facilities. Location permits will be necessary, but also sufficient for interventions that are not considered construction, such as the installation of pontoons in marinas.

Regarding the Law on Construction, a single permit – the construction permit – will be introduced, which will be issued based on minimal documentation. To facilitate investors, construction permits will be issued without regulated communal and water fees, but the investor will have to prove eight days before the start of construction that this issue has been resolved. According to the government’s proposal, the construction permit would be valid for three years, during which construction must commence.

Speaking about this proposal, Minister Mrak-Taritaš explained that the implementation of two separate procedures, i.e., issuing a location permit as an act for implementing the spatial plan and an act for construction (confirmation of the main project or construction permit) for most buildings in most cases represents an unnecessary administrative barrier that also increases the cost of investment.

 - The adoption of the proposed Law will establish a hierarchical relationship and connection between the central body of state administration responsible for the state of the administrative area of construction and local and regional self-government, which issues construction and usage permits, and will eliminate other deficiencies, thereby creating conditions for ensuring effective and uniform application of laws and other regulations governing construction. The issuance of construction and usage permits will be simplified and accelerated, and the documentation required for their issuance will be reduced, thereby also reducing the overall costs of issuing these permits – stated Minister Mrak-Taritaš.

For owners of new buildings, the government proposes the Law on Construction, imposing the obligation to arrange the facade and surroundings within a period of five years for family houses and up to ten years for large buildings. If these deadlines are exceeded, the proposed law provides for a penalty of three thousand kuna per month.

Prime Minister Milanović assesses that facades are not only an aesthetic but also an energy problem, and he finds the proposed deadlines generous.

“I cannot imagine someone building a three-hundred-square-meter house without a facade,” says Milanović.

Regarding the owners of old houses without facades, the mentioned deadlines and penalties do not apply to them, but the Ministry of Construction and Spatial Planning estimates that energy certification of buildings and savings on energy will compel citizens to create facades.

According to the proposal of the Law on Construction, a tolerance of three percent on the projected dimensions of buildings for which a construction permit has been issued is introduced, except for neighboring boundaries and the basic construction direction.

To expedite the work of a total of 900 officials in 53 regional offices dealing with the issuance of construction permits, the government proposes a system of disciplinary procedures and monetary fines for slow officials and those who issue permits contrary to spatial plans. Fines for negligent officials of up to five thousand kuna are proposed, as well as for the heads of their offices if they refuse the ministry’s request to initiate disciplinary proceedings. To facilitate officials, the government prescribes material responsibility for designers, so officials will no longer have to check projects when issuing construction permits.

Regarding the Law on Construction Inspection, it is proposed to transfer part of the work of construction inspectors to municipal inspectors, who would be responsible for smaller structures such as fences and canopies, as well as for collecting fines for buildings without facades and with unkempt surroundings.

Inspectors, according to the proposed law, could issue demolition orders within eight days of going to the field for buildings constructed outside construction zones. Today, this takes significantly longer due to a number of procedures.

Regarding illegal construction within construction areas, the possibility of issuing demolition orders is proposed, with the possibility of postponement that would serve to obtain a construction permit. In this case, inspectors would impose a corresponding fine, and if the illegal builder refuses the possibility of obtaining a permit, demolition would proceed within two weeks.