Zagreb Reconstruction – Entrepreneurs Offer Building Reconstruction in Exchange for Common Spaces

More than four months after the earthquake, it is certain that the new Law on the Reconstruction of Zagreb will finance 60 percent of the works by the state, while local communities and owners will each contribute 20 percent. The reconstruction is expected to last, we have heard, about ten years, but if someone wishes to expedite it, they can do so by transferring ownership of the common areas (attic spaces, laundry rooms, etc.) to the contractor for the building’s reconstruction.

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Marko Piplica

—This new method of financing building reconstruction has been proposed by at least three entrepreneurs, of whom only one – the owner of the real estate business Dalmagrad Marko Piplica agreed to talk. We do not know why the other two declined (one from the start, and the other, although he agreed, did not respond to calls), but Piplica willingly answered questions, emphasizing that he wants to do everything transparently and openly. After all, the offer seems fair, and this is also the view of the companies that manage buildings (GSKG, Zapad-stan, BMD, and Stambeni ZG) we contacted, all of which told us that the co-owners of the buildings they manage have not received such offers, at least so far.

So far, three contracts

We found Dalmagrad’s offer on the Facebook page ‘Earthquake in Zagreb – All of us in the center’, published on June 19 by a member of that group who photographed a letter she found in her mailbox. In it, Dalmagrad expressed interest in purchasing attic space, stating that it is interested in collaborating with co-owners of unused attic spaces to renovate and restore their residential building, their apartments, install an elevator, and similar ‘in exchange for attic spaces that we would give new meaning to’, it states at the end.

– So far, we have signed three contracts out of a total of 28 buildings we have inspected and concluded that we can enter such an investment. We were surprised by the response – says Piplica.

In general, the reconstruction of buildings does not have to be paid for only with common space; various combinations are possible, he says, where part is paid in cash, part in the building’s reconstruction; in short, they are open to all agreements. He adds that they have experience in renovating attics; moreover, the buildings in which they bought the attic even before the earthquake, he claims, were very minimally damaged because they repaired the chimneys during the renovation, so none collapsed when the earthquake occurred.

– We have sold some of those apartments, so I called the new owners, and they all told me that the damage to their apartments is not significant. The earthquake was a trigger for us to intensify our efforts to purchase common areas in this way, and on the other hand, I believe that we will ‘push’ the co-owners of damaged buildings to start the reconstruction sooner than they thought – explains Piplica.

The Croatian Association of Tenants and Co-owners of Buildings did not want to comment on such offers from entrepreneurs, stating that it is a matter of the co-owners’ choice, and one tenant representative from the old part of Zagreb we contacted said she would not agree to such an offer. What her neighbors think, we do not know, but only one tenant can create a problem, notes Dražen Bošnjak, head of the technical service at BMD, because only ‘if the co-owners achieve 100 percent agreement on ownership shares is there a possibility of reconstruction in this manner’.

100 percent agreement

Piplica tells us how he managed to reach an agreement with 17 tenants in one building, but one will not even hear of such an option, so for now, there is nothing to be done.

However, even with the consent of all tenants, a contract with the reconstruction contractor may not be possible, notes Zlatko Vlašić, director of Zapad-stan, if the building’s division into units has not been carried out, which establishes the individual ownership of all co-owners over the common parts that would be transferred.

– In that case, it is not possible to conclude a contract that would allow the investor ownership of the common part of the building after the reconstruction – explains Vlašić and adds that ‘the process of dividing the building into units is complex and demanding and depends on the 100 percent agreement of all owners of the special parts of the building’.

In any case, it can be expected that co-owners of buildings damaged by the earthquake will receive such offers from entrepreneurs.

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