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Confusion over deadlines could cost landlords hefty fines

The dispute between the Ministry of Construction and the Community of Family Tourism of the Croatian Chamber of Commerce regarding the energy certificate is still ongoing, although January 1 is approaching when penalties will be imposed on those who do not have it, but should. The Community claims that those providing ‘hospitality services in households’ do not need to have it.

The discussion about energy certificates has been ongoing for some time and has intensified just before the date designated by the legislator as ‘D-Day’ – January 1, 2016. The Construction Act set this deadline for all those to whom this provision applies to obtain an energy certificate, and those who do not comply will face the threat of hefty monetary fines, ranging from 5,000 kuna (minimum fine) to 10,000 kuna (maximum). Furthermore, after paying the fine once, no one will be exempt from further payments, which can extend indefinitely and reach astronomical amounts. Additionally, regardless of the amount, if the fine is not paid, all consequences that follow if there is a debt to the state are likely, from the inability to participate in tenders to the inability to register vehicles.

Different formulations

The current discussion is taking place between the Ministry of Construction and Spatial Planning and the Community of Family Tourism of the Croatian Chamber of Commerce. The positions are completely irreconcilable, and as time passes, the differences are growing. The Community claims that the obligation to obtain the certificate does not apply to its members because their fundamental Law on Hospitality Services specifically addresses ‘hospitality services in households and on family farms’, so according to that law, hospitality services in households can be provided by a natural person, i.e., a landlord.

Further paragraphs explain what is meant by ‘hospitality service in a household’. Nowhere is the service of renting an apartment, room, or house mentioned, and this is precisely the formulation used by the Construction Act, according to which the owner of the building for which the energy certificate is issued is obliged, before selling, renting, leasing, or giving a part of the building on lease, to obtain an energy certificate. The same obligation applies to the buyer, tenant, lessee, or recipient of the lease to provide the energy certificate or its photocopy. The Ministry claims that all residential spaces that are rented and are larger than fifty square meters must have an energy efficiency certificate and that the arguments presented by the Community in public are not acceptable.

Who is right

Although it is not so common, here we must side with the Ministry and give it credit. Here is the reasoning: firstly, it is true that the formulation from the two laws is not exactly aligned, but this is a common case anyway. However, the solution lies in the interpretation of both legal norms, and this interpretation is all the more important knowing that the provision from the Construction Act is the implementation of a European directive. This directive also states the possibility for the state to exempt certain categories from this obligation or to regulate it differently, but it does not have to do so. It should also be emphasized that the overall concern for the rational use of energy is one of the strategic determinants not only of national but also of European and global legislation. Therefore, the state encourages us to first determine whether consumption is rational considering the condition of the building and/or its part and, if it is not rational, to change it. Although the state is not consistent in this concern, for example, it does not impose the obligation to renovate facades for already constructed buildings (although it could), and although it has not opted for active measures, it is clear that we all benefit from energy certification and that it introduces some order. It is crucial to emphasize that there is a principle in law according to which the label or name is not important, even less decisive. This means that it really does not matter whether the terminology of the two laws is identical and if not, why not. If an energy certificate is necessary for cases of renting, leasing, or leasing a building or its specific part, then it must be determined why this would not apply to persons whom the Law on Hospitality Services refers to as landlords because that very term implies that it is about renting and then only the subject of the lease can be disputed.

What to do

Since about 63,000 family households that receive tourists in their homes, apartments, or flats have found themselves in a gap between the recommendation of the Community (it is not quite clear whether it is willing to bear the consequences of calling for the non-acquisition of the certificate if there are sanctions, but we are quite sure it is not) and the clear positions of the Ministry. The deadline is very close. It is good that few of these people provide services in winter, but spring will come quickly, and the process usually takes a little more than a hundred days. Because of all this, it would be wise for landlords to at least initiate the process of obtaining the certificate, if they have not already obtained it, and to deposit their statement that they are doing so only because the Ministry is almost forcing them to do so, which ensures that they retain the right to claim the funds spent on the certificate in case the coming months bring a ‘ruling’ in favor of the Community.