We purchased a house in Istria 3 years ago which was at that time under construction. We still have no independant water supply and we receive water via our neighbour who is Croatian. We have no water metre and as such, we can not get a usage permit. We have been promised many times that we would get a temporary water metre to enable us to get a usage permit. It is not happening. Our lawyer is no longer assisting us and says we will have to take legal action against the water board!! Yeah! Our lawyer has been paid in full for complete legal services including obtaining MFA approval. Does MFA approval depend on a usage permit also? Without a usage permit, we can not legally rent our our house either. Other houses recently built in the same village have a temporary connection and usage permits! We don't know what to do. Has anyone heard of a similar situation? Can anyone offer good advice. We find this entire situation totally unacceptable. Does anyone know a tough lawyer who can assist?
I don't know which lawyer you had, but I know there is a good one in Porec, his name is Ilic, have to get the address and tel nr if you require. Then again, court cases take forever over here, you are probably much better off with someone who can 'put some oil' on the tracks. Why not hire a translator, go to Vodavod and talk directly to the boss ? They will try to scare you away, but just keep hanging on like a pitbull and by all means tell the boss that you will pay 1000 or 2000 Kuna to the guy who comes and connect it. YOu will be surprised to see that sometimes things go much smoother.
The country is corrupt, I know, it is rotten to the core, but that is the way it works here. If you want to send a local person make sure it is a she and make also sure that she is drop dead gorgeous. Miracles will happen, I can assure you.
...I know this may sound silly but have you taken the water board to dinner? It seems to be the way to get things done. With connecting a phone line, electric and water there is a long waiting list and you need to get noticed. I don't think taking legal action will get you anywhere, being corrupt in Croatia, for some at least carries no stigma whatsoever.
Just think of it as a different type of ball game.
Thank you Mambo and Zorro for your help. Apparently the developer has already paid loads of money to the water board for infrastructure to be put in place - the other houses are sorted but we've been forgotten about. Apparently the developers representative (a middle aged man) has been into the water board many times. We are going to Croatia next month - I am going to follow your suggestion and recruit a good looking local female for the job! I'd be more than happy to pay to get this sorted. I think you're right-there probably isn't any point in getting another lawyer - it will probably just cost us loads more money for nothing. I think your suggestions are the way forward. It's just difficult for us as we don't speak the language and can't visit as often as we would like to in order to get this sorted. Thanks again.
so isnt there a customs guy i can take to dinner to get my ducati registered........i like this style and have drop dead gorgeous friend in split..........maybe my new idea......lol
We finally have our usage permit after almost 4 years! Time to celebrate, we thought. We can now rent out our property legally and obtain categorisation. But no, nothing is ever easy in Croatia! Apparently the laws have recently changed (yet again) and the usage permit needs to be a BUSINESS USAGE PERMIT not a Residential Usage Permit. The most annoying part is if we'd received the usage permit even a few months ago and obtained categorisation at that time, we would be allowed to keep our categorisation but this is not the case for us. I am writing this to let all prospective buyers in Croatia know that Real Estate agents should let buyers know they must buy as a company and that the usage permit must be a business usage permit otherwise they won't be legally able to rent out their properties. From our experience, we believe that most usage permits are always residential permits. We now doubt that Croatia actually want any foreign investment? It is all so very frustrating. Is anyone else aware of this or currently waiting for a usage permit/categorisation?
you can still change the ownership to a company ownership, without paying 5% RETT tax on the transfer by using the property as foundation capital. However i am not sure this will solve the problem. I need to find out more about the new regs. (The government doesn't bother to inform the people who deal with the public -such as my agency - of the new regs or even that they exist. We are expected to hear of them on the grapevine and then try to investigate to find out what truth there is to the various rumours.)
It can also depend on what the initial builder , investor, declared the property will be used for. If it is a residential building rather than a touristic building then the builder will pay less tax so they will obviously choose this option . To rent out your property you must be either a Croatian citizen or own a Croatian company. For your property to get catagorisation you must be either a Croatian citizen or own a Croatian company. Yes you can use the property as initial capital to open the company and not pay the 5%RETT. BUT the property will have to be re-evaluated by an independant . This cost is on per m2 and does also vary on which local council is in charge. You could be looking at 3,000 - 5,000 Euro to do this. A way around this is... open company with the required 20,000 kuna and pay all the relevant set up costs. Then your company rents the property from you as individuals which by law you can do. (A Croatian company can rent from a foreign citizen). thus avoiding the 5 %RETT., and get catagorisation and legally rent the property.
Last Edit: Apr 5, 2008 7:24:59 GMT 1 by upthevilla
That is good advice and I didn't know that. Two questions:- 1. can the company rent the property from someone who has signed the purchase contract and paid for the property but not actually got their name into the land registry e.g. no MJ permission? 2. Is the rent which the company pays pre-defined somewhere i.e. will the tax officer say that this apartment should be let for €x?
Bron, Your thread started out with the lack of your water meter being the main problem for not getting usage permit. Can we assume that that was sorted out and whose name is/was it in? Also can we ask what the position is/was with the electricity meter – was that not a problem in the same way as the water was? Will the utility meters be in your name?
Last Edit: Apr 5, 2008 13:53:28 GMT 1 by mirabelle
Hi Bron. I recently found myself in the same situation yourself in that I have been trying to get categorization for two flats which I have been doing up to rent out and was told last year that this was no longer a problem for private owners as the law had changed in late 2006. I was dealing with a rental agent who had all the relevant documentation in place and told me in Sept. 2007 that I could just as easily arrange inspection etc. early in the new year as the department closes down over Christmas. I went in February to arrange this - he had already taken photos for advertising on his website!! - when he told me that the law had changed again and that I needed the original building permit (my property is some 30 years old) to have commercial use. Setting up a company has nothing to do with it. To get change of use apparently can take up to 2 years and costs who knows. I have written to Minister of Interior, MEPs, European Commission (especially as there is a plenary meeting concerning accession of Croatia to EU on 9 April!!) in connection with this and the residency laws. In the latter we (or someone) appears to have been successful. Am awaiting full translation to see if anything can be deduced from that one as it pertains to non nationals and their activities. We are entitled to the peaceful use and enjoyment of our property and should not be restricted in this way.
This seemingly new restriction is apparently a revival of an old byelaw set down in 1991 and mostly ignored by the local authorities. Then last October the people working in the categorization departments were called to an official meeting where they were told to implement this ruling. There is a very helpful agent in Porec who clarified this for me with whom I was in touch last month and who was going to pursue the matter with people in Zagreb. I shall see her again when I go in a couple of weeks. All the agents are up in arms as it is severely restricting their business and this is the second change in as many years. Shall keep you informed of any developments.
Thank you Carole, UptheVilla and Mirabelle for all your help. Funny you should ask about the electricity Mirabelle, as this is the latest shock from Croatia on top of everything else. I've just found out TODAY that we are also on a temporary, ILLEGAL electricity connection! Our lawyer has never informed us of this! When I asked before about us not getting any electricity bills, the answer was "this is Croatia, and you'll probably get one bill for the past three years". Now I know the reason why we've never had a bill. It appears we have a house with both an illegal water and electricity connection. This is a disgrace! Unbelievable. What kind of lawyer let this happen to us? Is there anyone else out there in this situation? The name on the usage permit is the name of the people who previously owned the land which the house is now built on. The developer bought plots of land throughout Istria and then built stone houses. I believe our names will only be on the usage permit when the 5% transfer tax has been paid? I'm waiting for the lawyer to clarify this. How could we get a usage permit if we have illegal water & electricity? I am at my wits end here and haven't a clue what's going on. I feel we've been messed around totally and the lack of communication and support from the lawyer does not help us. Both the lawyer and the Sales Person whom we bought the house from knew at the outset we wanted to rent out the house; they should have advised we buy as a company. I think that even if we set up a company now, apparently the usage permit application has to be gone through again from Buildings Permission application stage including the services of an architect - obviously this would take years! I am open to all suggestions on how to resolve this. I love the house, love Istria but am beginning to regret every buying there. Even if we decided to throw in the towel now and sell, we couldn't! How could we sell a house with no legal water and electricity supply with a usage permit that doesn't allow you to rent out the house. This is a crazy situation! I need to get out of this situation! Thanks everyone in advance for taking the time to help.
Forgot to mention, this information re the illegal electricity connection has just come out because an Electricity Official was in the village disconnecting another house built by the same developer. He said our house is due to be disconnected any day. Our friend thought he was there to read the metre! Friends arrive next week.