The government today adopted the Affordable Rental Program, which aims to activate existing vacant residential units and offer them for rent at affordable prices.
The program outlines the procedure for implementing public calls for owners and tenants, a scoring system for inclusion in the program, a list of documents that interested parties must submit to the public legal body, the method for determining and implementing the priority list, the calculation of locally affordable rent, and more. The program will be implemented by the Agency for Legal Affairs and Real Estate Mediation (APN).
Compared to the proposal sent for public consultation at the end of August, the main change is that individuals with an active own company or craft can now apply for the affordable rental tender, but they will not be able to conduct business at the address of the residential property they use for affordable rent.
An additional provision has been added stating that individuals applying for affordable rent must provide a certificate that no criminal proceedings are being conducted against them or their immediate family members. Furthermore, the maximum number of points that can be earned based on residency has also been limited.
For those wishing to rent their apartment through the APN program, proof that the property has not been used for two years can be provided through utility bills or consumption statements for energy and water. Additionally, a new rule states that owners whose properties are structurally damaged will not be able to apply for the public call.
The affordable rent is paid to the APN and must not exceed 30 percent of the household’s monthly income, reduced by utility costs. The difference to the market price is covered by the state. Apartment owners receive compensation equal to the local median rent, paid in two installments, as reported by Hina.
For example, a family with a total income of 2000 euros for a 60 square meter apartment would pay rent according to the formula: income × 0.30 − 2.50 €/m² = 600 – 150 (utilities), which would ultimately amount to 450 euros per month. If their income increases, the rent would also increase, while in the case of a decrease in income, the family would have the right to request a correction. The difference to the amount received by the owner would be compensated by the APN.
The APN will collect data on the total income from the previous year for the tenant and all immediate family members from the Tax Administration at least once a year. If the tenant or their immediate family members’ net income increases by more than 15 percent annually, the tenant is obliged to notify the APN of the new income status within 30 days of the income increase.
Scoring Criteria
The scoring criteria for tenant applications include the income and number of immediate family members of the tenant, the number of preschool children and children in regular schooling, the age of the tenant, educational qualifications, disability of the tenant or a family member, residency, and the need for deficit occupations in the local government area.
Regarding the scoring of tenant income, if it amounts to between one and one and a half minimum wages, they earn the maximum number of points, which is 10. For income from one and a half to two minimum wages, 7 points are awarded, 5 points for income from two to three minimum wages, 3 points for income from three to four minimum wages, and 1 point for income greater than four to five minimum wages.
The grading in scoring also applies to the number of immediate family members. If it is a single person, that individual receives 1 point, while having 5 or more members earns the maximum of 9 points. An additional two points can be earned if the tenant is a single parent, adoptive parent, or a member of a single-parent family. For each child, the tenant is entitled to 3 points.
When it comes to the established degree and severity of disability of the tenant or a family member, 10 points are awarded for a child with developmental difficulties, 8 points for 100 percent disability, 6 points for disability or impairment of 80 to 100 percent, and 4 points for 50 to 80 percent.
An additional 8 points can be earned by applicants who are individuals without appropriate parental care, individuals under 30 years of age exiting the social and alternative care system, or children of deceased or missing Croatian defenders from the Homeland War.
According to age, the highest number of points, 12, is awarded to tenants aged between 25 and 45 years, 8 points are awarded to those aged 18 to 25, 6 points to individuals aged 45 to 55, and those over 55 are entitled to 4 points.
Local government units can define two categories of deficit occupations, with 8 points available for the first category and 6 points for the second category. Half a point is awarded for each year of residency in the local government area where they wish to rent, but a maximum of 10 points in total.
In the event that they have the same number of points, priority over other tenants is given to family members of killed and missing Croatian defenders, war veterans, volunteers, and defenders.
The owner of the property they wish to rent must prove that the apartment has been vacant for two years. In addition to HEP bills as proof, bills from other operators will also be accepted. Exceptions to the two-year rule will be precisely regulated by the Affordable Housing Act, which is expected to go to public consultation by the end of the year, as previously reported.
Compensation for Landlords
Property owners included in the Affordable Rental Program are entitled to compensation equal to the local median rent.
This is paid in two installments: 60 percent immediately after handing over the property to the APN, and the remaining 40 percent after half of the contracted period has elapsed.
For example, for a 60 square meter apartment in Zagreb with a five-year contract, the median rent amounts to 660 euros per month. This totals 7920 euros annually, or 39,600 euros for five years. The first payment would amount to 23,760 euros, and the second to 15,840 euros.
If the property is not in a usable condition, the owner is contractually obliged to bring it to a usable state within six months.
The APN will rent the property free of persons and belongings, except for items necessary for the regular use of the property, whereby the APN is not liable to the tenant for the correctness of the items, except for kitchen elements and white goods if they are present in the residential property being rented.
The tenant is obliged to take care of the residential property they use and carry out ongoing maintenance, which is detailed in the rental agreement.
The rental agreement is concluded between the APN and the owner after selecting the tenant, while the lease agreement is concluded between the APN and the tenant.
The APN performs all administrative and technical tasks related to the implementation of the program and maintains a database of expressions of interest and concluded contracts. The APN will also issue public calls for both tenants and landlords.
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