The Law is aimed at resolving ownership issues associated with real estate that has been occupied by camping grounds, hotels and resorts constructed during the communist era, but where the real estate was during privatization left out of the share capital of companies which became the owners of such camping grounds, hotels and resorts. It is estimated that the surface area of such land equals approximately 100 million m².
The Law generally grants the ownership over such unassessed real estate either to the Republic of Croatia or the relevant local municipality. The ownership of unassessed real estate taken by the state during the Yugoslav communist rule which was either never used, or has ceased to be used for tourism, is to be returned to its former private owners, but only if an official request for return has been filed and remains pending as at 1 August 2010.
In general, rights of use over such unassessed real estate can be acquired for valuable consideration either by obtaining a concession, or a right to construct thereon. However, in limited cases involving camping grounds, it may be possible to purchase the real estate at its market value.
Companies owning camping grounds, hotels and resorts that may be using unassessed real estate, have the exclusivity of six months from the Law coming into force to apply for a concession. The procedure for granting concessions and determining the value thereof is to be prescribed by a special Government regulation, except in cases of real estate located within the area of maritime domain where the Law on Maritime Domain and Seaports applies (National Gazette 125/08).
The Law imposes a number of other deadlines that should be complied with by the effected parties if they want to properly protect their legal rights.
For further information please contact Paul Suchar, Partner, Taxation and Regulatory Services or Marinela Mostić, Director, Regulatory Services.