The penalty for companies is ten times the gross salary

The proposal for the law on construction inspection is a new ‘player’ in the exciting Croatian legislative scene. Discussions immediately began regarding the part of the law that deals with financial sanctions in the event that an investor does not complete the facade.

Official and unofficial, experts and non-experts, everyone is commenting on the Government’s proposal, but more in a general sense and far less constructively. Moreover, they have not even bothered to follow the work on the Draft and thus notice that the initially proposed measure – a financial penalty of 3000 kuna has been significantly improved and now amounts to ten times (for legal entities) and double (for individuals) the average gross salary in the previous year.

There were no comments about the fact that this is a penalty that can and must be repeated multiple times and without any limit on the number of repetitions, if the resolution is not complied with. According to data from the Croatian Bureau of Statistics, the average monthly gross salary per employee in legal entities in the Republic of Croatia for July 2013 was 7922 kuna, so the penalties will be significantly higher than the initial 3000 kuna.

And assistance for owners? The current situation is certainly unsustainable. Buildings generally do not have a well-maintained facade and thus not only mar some visual identity of the space but also cause direct property damage to their owners. A well-maintained facade pays for itself through energy cost savings, and on the other hand, increases the price of apartments in the building. Therefore, facades certainly need to be arranged; the only question is whether the double or tenfold financial penalty is in the correct ratio to the investment that the owner must make to arrange the facade.

It is known that the price per square meter of facade surface ranges between 150 and 200 kuna, which means that the average facade of a family building of 100 square meters requires an investment of around 80,000 kuna, and if it is a large building, it can be a hundred times more. It is not worthwhile for anyone, absolutely anyone, to pay a penalty of 15,000 kuna and wait for the next penalty. However, one must ask why the state is not using this opportunity (as it did not during legalization) to increase employment and generally initiate an investment cycle. The number of unfinished or collapsed facades is enormous; it is clear that this will not be a small job. Therefore, the state could offer very favorable credit conditions (in the manner of a mortgage loan) and special incentives for those who will carry out these works under clearly defined conditions that take into account the interests of all participants. If this were to be done and at the same time clearly warn that swift and high penalties will follow for those who do not accept such offers, very few would not respond and risk a penalty.

Clear provisions, please! And finally – the most important. The law does not explicitly state anything about this, but judging by all available announcements from the relevant authorities, it somehow appears that the new legal solution will not apply to objects that already exist at the time the law comes into force. If this is indeed the case, it is a real disaster. There is not a single argument that would support this. If we want to improve the state of the space, then we must prescribe the same measures for all. It is unacceptable, for example, that in the immediate vicinity of a five-star hotel in Split, there stands an unfinished building that has been a disgrace and a danger to property and lives for years. If the owner were to incur, for example, 100,000 euros a year for the unfinished facade and unkempt plot, the facade and surroundings would surely be arranged in the shortest possible time. Therefore, penalties must certainly be imposed.

To avoid any doubt, it would be useful to exert professional public pressure to achieve a clear provision in the legislative procedure by the so-called second reading that will guarantee that the measures apply to all buildings regardless of the time of construction, and if someone wants to exempt existing buildings from these measures, let them explain how they intend to ensure that those buildings (in terms of facades and their surroundings) are also arranged. Now is the ideal opportunity for action; once the law is passed, everything will be much more difficult. It should also be noted that the obligation to arrange plots and the environment of the building is no less important, but for some reason, this part does not concern anyone.