Most Protected Tenants Opt for State Apartment

Moving into a state-owned apartment while paying a preferential rent is the measure that has so far been chosen by the largest number of protected tenants, as well as the owners of the apartments in which they live. Namely, by March 15, 2025, all protected tenants and apartment owners were required to submit a form to the Ministry of Physical Planning, Construction and State Property, selecting one of five proposed measures in accordance with the Law on the Execution of Judgments of the European Court of Human Rights in the case group Statileo v. Croatia. Although not all forms have yet arrived at the Ministry, based on the applications received so far, it is possible to infer how the long-standing problem of protected tenants will ultimately be resolved.

According to the analysis of 476 requests received from protected tenants, 50 percent accepted the third measure, which involves handing over the apartment to the owner and moving into an appropriate state apartment, while paying a state rent of two euros per square meter and the right to purchase that apartment according to a special formula (1434 euros for Zagreb, 1195 euros for the rest of Croatia, and an additional discount of 30 percent is possible, depending on whether the protected tenants are retirees, have veteran status, minor children, etc.). A further 23 percent opted for measure number two, which involves the payment of a sum of money to the protected tenant by the state in exchange for the termination of the protected tenant status, i.e., eviction from the apartment. According to this measure, a single person in Zagreb will receive about 61 thousand euros, in the rest of Croatia, 50.8 thousand, and if the household consists of more members, the amounts increase (a four-member household in Zagreb receives about 104 thousand euros, and in the rest of Croatia 86.6 thousand euros).

– Since the beginning of the implementation of the Law (September 2024), 162 offers have been written for the implementation of Program Measure 2 – payment to the protected tenant and eviction and handover of the apartment to the owner, which has cost the state about 10.8 million euros. At this moment, about 70 cases are still in preparation for the offer for the implementation of program measure 2, which will be realized in the next two to three months – stated the Ministry of Construction.

Expectedly, the least popular is the first measure (only three percent opted for it), which involves the termination of the protected lease on the apartment while allowing the previous protected tenant to realize the right to a home by recognizing their status as a tenant in the same apartment indefinitely in accordance with the Law on Apartment Rentals, based on an agreement with the owner.

– According to the requests processed so far, the highest number of people has understandably opted for measures two and three. For those who choose measure three, the state will provide apartments – through the existing fund of state apartments or the construction of new ones. At this moment, there are about six hundred state apartments that need to be renovated, and the construction of an additional three hundred apartments is planned in cities where the highest number of protected tenants is located. Thus, the construction of a multi-family building in Split is soon to begin – 57 apartments, a public procurement process is underway for a multi-family building in Zagreb – 152 apartments, and a public call has been announced for the purchase of land in Dubrovnik for the construction of 50 to 80 apartments. Depending on the final results of the expression of interest from protected tenants, it will depend whether we will also build apartments in Rijeka and Šibenik, while in other locations we have enough state apartments to address the issues of protected tenants – explained Tomislav Jukić, director of the Directorate for the Implementation of Housing Policy, Housing Quality, and Communal Economy.

Currently, state apartments are offered only to protected tenants who have moved into apartments owned by the Republic of Croatia due to earthquake renovations, and when all data from the forms arrive and are processed, a priority list for state apartments will be established.

– If at that moment there are not enough renovated state apartments available, there is a possibility that the protected tenant will temporarily move into an apartment in private ownership, and the Republic of Croatia will also subsidize the rent for them. In that case, the protected tenant will pay the same amount as they have been paying so far, not the increased amount that has been paid since January 1 – Jukić explained.

As of January 1, 2025, the amount that protected tenants must pay to apartment owners until a final solution is reached (any of the five measures) has increased, so they pay a transitional rent of 3.00 to 4.69 euros per square meter (the Republic of Croatia pays the same amount for them). In the case that the protected tenant has low income, the state also subsidizes an additional amount, as it is stipulated that the rent can be a maximum of 25 percent of the income of the protected tenant.

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The implementation of the fourth and fifth program measures provided by the aforementioned law is only possible if the apartment owner agrees to it, and the assumption, based on the processed requests received so far, is that a maximum of about 20 percent of owners or tenants will opt for that option. These measures provide that the owner sells the apartment to the state or receives a replacement apartment in return, and in that case, the protected tenant could remain in the apartment they have lived in so far and purchase it at a lower price than the market price. Given that many such apartments are in good locations, owners generally do not agree to this option, except in cases where the apartment is in extremely poor condition.

So far, a total of 746 forms have been received from protected tenants (out of a total of 1349 registered) and from 719 owners (out of a total of 2771 owners). The reason why there are more owners than protected tenants lies in the fact that ownership of the apartments in which protected tenants reside has been ‘diluted’ through inheritance, meaning that today multiple heirs claim one apartment. Of course, there are also cases where one owner has multiple apartments.

The deadline for submitting certified forms by which owners and tenants choose one of the program measures expired on March 15, but in the meantime, it has been extended until the end of April, so by mid-May, a clearer picture could emerge regarding the options chosen by tenants and owners as well as how much resolving this issue will cost the state. According to some earlier preliminary estimates, it amounts to 107 million euros, but this amount will likely be higher due to rising construction costs.

At the same time, while the issue of protected tenants is being resolved, another assessment of the constitutionality of the Law on the Execution of Judgments of the European Court of Human Rights is awaited, which has been submitted by the SDP and Možemo, as they believe that the state should have resolved the issue of protected tenants more effectively. Protected tenants, in fact, preferred a model in which they would retain possession of the apartments, and the state would compensate the owners. However, given the previous decisions of the European Court of Human Rights and the Constitutional Court, which indicate that it is the undeniable right of owners to regain possession of their apartments, a current compromise solution has been made in which owners can regain their apartments, and protected tenants can receive another apartment with minimal rent payment or preferential purchase. This solution, of course, costs the state less, as protected tenants have often been in large apartments in city centers, while through the legal solution they will receive smaller apartments, in accordance with the number of household members.