Justice for All: The State Should Bear the Cost of Rent for Protected Tenants

The Croatian government will soon propose amendments to the Rental Law, which have been in preparation for over a year and a half, dating back to when Lovro Kuščević was the Minister of Construction. In fact, Kuščević announced back in May 2016 that the government would quickly send these amendments to parliamentary procedure. The question is why this has been delayed until now.

These issues have been lingering since the 1950s because the communist authorities confiscated many private apartments and relocated other people into them. This is a very difficult political problem that the state itself created, and it is estimated that there are about three thousand such apartments, housing between ten and twelve thousand people. Of that number, about ten percent are socially vulnerable citizens, and the same percentage are war veterans, whom the state is obliged to care for.

I had the opportunity to speak with the president of the Croatian Journalists’ Association, Saša Leković, who pointed out the problem faced by the HND, where protected tenants are also residing in their building, located in an extremely attractive location in Zagreb, paying a laughably low rent, and additionally, the HND is contractually obligated to pay even the maintenance fees for them, so the rent does not even come close to covering the maintenance fees.

The Law Against Ownership

Of course, every journalist who is a member of the HND wants to know where the money of their organization goes, but Leković is right when he says that the HND did not negotiate the status of protected tenants nor did it have the ability to determine the amount of rent. These tenants were relocated and received the status of protected tenants because the then SR Croatia confiscated their property and allocated them apartments in the Journalists’ Home as compensation. Previously, the state (SR Croatia, SFRY) confiscated the Journalists’ Home from the HND, and only in 2000 did the Croatian authorities return that home to the HND’s ownership. However, they did not return the entire building to its possession because protected tenants remained in those apartments, paying a miserable rent.

That is why Leković says that the amount of rent paid by protected tenants is not determined by the HND, and like any owner, he pays maintenance fees for the apartments that are in his ownership because it is a legal obligation. Indeed, if we look at the Rental Law (Article 13), it states that the landlord is obliged to maintain the apartment being rented in a condition suitable for habitation, in accordance with the rental agreement.

A State Problem

Furthermore, the apartments where protected tenants live can only be sold to them, if they even wish to do so. It is very questionable whether in such situations the actual owner of the apartment could receive even 20 percent of the value of their apartment, because since they cannot evict protected tenants (even in the case of death, the right to protected rent is held by the spouse, children, stepchildren, adopted child of the tenant, Article 24), it is practically not worth it for them to buy the apartment.

Former Minister of Construction Kuščević announced that with the amendments to the Rental Law, within five years, the protected rent would increase to the level of full market rent, and after five years, tenants would have to vacate those apartments at the owner’s request. This is some kind of solution (although it is not to the liking of tenants, and the deadline is too long for landlords), but not the best. Namely, the state created the problem itself and should have accommodated these people somewhere at its own expense, rather than shifting the cost onto private owners whose property was confiscated in the 1950s and formally returned, but not really.

It would be fair for the state to at least pay the rent for these apartments at market price during that five-year period or for tenants to pay ten percent of the rent, with the state covering the rest. Alternatively, it could evict them from those apartments and provide them with state apartments or find them another apartment for which the state would pay rent for five years. As it stands, the question is when the changes to the law will be voted on, and then it is a question of how much longer private owners will wait to enjoy the fruits of their property. Therefore, it is time for the state to pay for what it is responsible for, not private apartment owners.