The Obligations Act regulates lease and rental agreements, the Leasing and Sale of Business Premises Act provides specific regulations on the lease of business premises and the Residential Lease Act governs residential rentals.
Last modified 22 Mar 2024
There is no minimum or maximum term. Very long leases are normally granted for land (building rights) in return for a one-off payment rather than a market rent. For market rent leases, terms are much shorter (between three and 15 years is common).
Last modified 22 Mar 2024
Leases of residential property are regulated by the Residential Lease.
Industrial property and offices are normally governed by the general guidelines in the Obligations Act and the Leasing and Sale of Business Premises Act.
Retail leases may allow for turnover rents, where all or part of the rent is determined by the store's profits. They may also include provisions allowing the landlord to maintain a suitable mix of retail tenants.
In addition, retail tenants may be subject to obligations that exist for the benefit of the shopping centre as a whole; for example, an obligation to keep open and trade during specified hours and to contribute towards the marketing of the centre. Although the landlord will maintain the structure and exterior of the premises, a retail tenant may be given the right to maintain its own shop front in its usual trading style.
Hotel leases are similar to office leases, except where the hotel is located in a shopping complex, in which case the lease will have more of the characteristics of a retail lease. Hotel leases often contain detailed provisions relating to the management of the property or, alternatively, the management arrangements may be set out in a separate document providing for a dedicated hotel management company.
Last modified 22 Mar 2024
The renewal of a lease agreement is subject to mutual agreement between the parties.
Last modified 22 Mar 2024
Unlike leases of flats, business leases are not automatically extended if the parties take no action. If the tenant refuses to move out, then the landlord has the right to bring a possession claim before the court.
Last modified 22 Mar 2024
Lease agreements contain provisions allowing the landlord to terminate the lease in certain circumstances, ie breaches of contract such as non-payment of rent etc.
The Lease and Sale of Business Premises Act provides grounds for early termination of a lease by the landlord. These include:
The landlord must bring a claim before the court for a possession order. These applications are regarded as urgent and prioritised by the court.
Last modified 22 Mar 2024
The county authority for expropriation can order the expropriation of a real estate if it has been established that this is in the interests of the Republic of Croatia. In this case, all rights over the real estate, including ownership and leases, are terminated. Compensation is only paid for property rights, not for contractual rights such as leases.
Last modified 22 Mar 2024
The parties are free to contract as they wish. The landlord may ask for a bank guarantee or a rent deposit, usually for an amount equal to three months' rent.
Last modified 22 Mar 2024
Leases normally restrict the use of the premises. Specific activities which may cause a nuisance are also prohibited.
Last modified 22 Mar 2024
Most leases limit a tenant's right to alter or improve the premises. Structural alterations are frequently prohibited, particularly where the tenant only leases part of the building. Non-structural alterations usually require the landlord's consent, which may not be unreasonably withheld. Upon termination of the lease the landlord may require any improvements to be removed in order to avoid paying the tenant compensation.
Last modified 22 Mar 2024
The lease will usually state that any transfer requires the landlord's consent. Where a subletting agreement has been concluded without permission, the landlord may terminate the lease agreement.
Last modified 22 Mar 2024
Where leases are granted for several years, it is standard practice to provide for a rent review after the expiry of a specified period to allow the rent to be adjusted to the market rate that would be payable for a new lease of the property on similar terms. Alternatively, rent may be index-linked.
Rents linked to turnover are also common (especially in the case of retail property).
Last modified 22 Mar 2024
Where the parties do not wish to provide for an open market rent review in the lease, they usually agree to link rent to a consumer price index (either Croatian or European) or, more rarely, to provide for fixed increases.
Last modified 22 Mar 2024
VAT is (currently) payable at 25% only if the landlord is a registered VAT payer.
Last modified 22 Mar 2024
There is no stamp duty. In the case of a lease in the form of a notarial deed, the notarial fee is calculated by reference to the amount of the rent.
Last modified 22 Mar 2024
In the case of a multi-let development, the landlord will repair and maintain the common areas and the structure of the building. Each tenant is usually required to pay a proportion of the service costs, calculated on the basis of the size of their unit.
Last modified 22 Mar 2024
Each tenant is responsible for maintaining and repairing the interior of their individual unit, excluding structural aspects.
Last modified 22 Mar 2024
Charges for electricity, water etc are paid by the tenant directly to suppliers if appropriate meters have been installed in the leased premises. In larger developments or shopping centres these costs are often treated in a similar way to service costs and each tenant will pay a proportion, calculated on the basis of the size of their unit.
Last modified 22 Mar 2024
The insurance is included in the service costs, which are paid by the tenants in proportion to the size of their unit. Insurance policies usually cover fire damage, damage from burst water pipes, glass breakage, storm damage and third party liability.
Last modified 22 Mar 2024
What is the usual length of each type of commercial lease?
There is no minimum or maximum term. Very long leases are normally granted for land (building rights) in return for a one-off payment rather than a market rent. For market rent leases, terms are much shorter (between three and 15 years is common).
Last modified 22 Mar 2024