The Entrepreneur Has Good Prospects in Court Against the City of Zagreb

An entrepreneur from the vicinity of Zagreb writes that the City of Zagreb sent him a letter requesting the preparation of project documentation for the installation of an advertising pillar for his micro-enterprise, and then also sent him a contract for the payment of a fee for that advertisement which will cost him around 50 euros per month. He believes this is illegal as it is almost the same case described in ‘Pravda’ in June last year.

Before I remind readers of what this is about, I will just mention that the entrepreneur did not want me to disclose either his identity or the identity of his company. The amount of the fee is also known to me, but I rounded it to fifty euros. Thus, the High Administrative Court (VUS) declared last year the decision on the fee for displaying advertisements on private property or land of the City of Velika Gorica illegal. The request for reconsideration of the legality of that decision was submitted by the state company HP – Croatian Post.

The Velika Gorica Case

Namely, based on that request, the VUS annulled Article 28, paragraph 1 of the Decision on the Communal Order of the City of Velika Gorica, which states that a fee is paid for the placement of posters and advertising items on public areas, land owned by legal or natural persons, and buildings. HP considered that such a decision is contrary to Article 3 of the Law on Financing Units of Local and Regional Self-Government and Article 68 of the Law on Local and Regional Self-Government (ZOLPS). It also considered that the contested provision is contrary to Article 8 of the Law on Ownership and Other Real Rights. Therefore, this company submitted a request for the assessment of the legality of that provision because it believes that JLRS cannot charge a fee for advertising content placed on property in private ownership, but only on public areas owned by that JLRS.

The court accepted this because, according to Article 68 of the ZOLPS, it is prescribed what revenues JLRS has. For example, these are municipal, city, or county taxes, surtaxes, fees, contributions, and charges, revenues from property in its ownership, revenues from companies, etc. Nowhere is there mention of fees from advertisements on private areas. Article 3 of the Law on Financing Units of Local and Regional Self-Government states more or less the same, but I emphasize it because it specifically states that JLRS generates income from the fee ‘for the use of public municipal or city areas’. Thus, again, there is no mention of fees for the use of private areas.

The judgment states that from the aforementioned legal provisions it clearly follows that by the decision on the payment of fees for advertisements on land and buildings owned by legal or natural persons, the City Council of Velika Gorica violated the law because JLRS can only request this for advertisements placed on their property.

The Zagreb Story

The Zagreb entrepreneur would like to request an assessment of the legality of the fee imposed on him by the City of Zagreb just as HP – Croatian Post did in the Velika Gorica case. Namely, the City of Zagreb adopted a Decision on the Communal Order (Official Gazette 15/2023) in May, which confirms in Article 170 that the Regulation on Criteria for Determining Fees for the Placement of Name Plates, Posters, Flags on Masts, Advertisements, and Advertising Panels (Official Gazette 14/15 and 14/16) is still in force. Article 1 of the Regulation states that it ‘determines the criteria for determining fees for the placement of name plates, posters, flags on masts, advertisements, and advertising panels (hereinafter referred to as advertising objects) on public areas, land, and buildings owned by others in the area of the City of Zagreb’. By ‘buildings owned by others’, private buildings are also implied.

In my opinion, the entrepreneur should hire a lawyer and submit a request to the Administrative Court for an assessment of the legality of Article 170 of the Decision on the Communal Order and the Regulation that is in force. I believe that the fee will also be annulled for the City of Zagreb, just as it was for Velika Gorica, but also for some other municipalities in Croatia.

POST SCRIPTUM

In addition to referring to the decision of the Constitutional Court in the Velika Gorica case, the VUS also referred to some of its previous judgments related to other local communities where it grants rights to private individuals and companies, rather than to JLRS. In other words, all individuals, as well as companies that display their own or others’ advertisements on their private property, do not need to pay fees to their JLRS. However, they will have to sue JLRS to the VUS because, as in many cases so far, those same JLRS (mostly) will ignore such a judgment interpreting that it does not specifically concern them even though the laws are clear. And the Zagreb city fathers apparently behave this way, which is why they will likely lose taxpayers’ money if they drag entrepreneurs through the courts.