Croatia prepares new law to regulate apartment rental market

The Croatian government is preparing a new Law on the Rental of Apartments to regulate the relationship between landlords and tenants. The current legislation dates back to 1996 and was primarily designed for social housing, whereas market-based rentals have grown significantly. Data from the Tax Administration shows that registered rental contracts rose from 104,000 in 2021 to 240,000 last year.

Key provisions of the proposed law include the mandatory solemnization of rental contracts before a notary public. This process is intended to ensure both parties understand their rights and obligations while allowing for the inclusion of enforcement clauses. These clauses would enable faster eviction or collection processes in cases of contract breaches, bypassing lengthy litigation. Under the proposal, the landlord would bear the cost of solemnization.

To protect tenants from arbitrary price hikes, the law would limit rent increases to once per year. Any increase would be capped at the rate of real estate price growth, which was estimated between 14% and 15% this year. The new law is intended to enter into force on January 1, 2027, following a public consultation period.