Buying farmland in Croatia

Croatian expatriates are often interested in buying land in Croatia – particularly along the Adriatic coast, but also in the interior of the country.
In this case it is clear to everyone that land that is zoned in the spatial or town plans as development land, building land so called, is different from the land that is meant only for agricultural purposes, be it plough land, gardens, meadows, pasture, olive groves, vineyards and other – all this is called “agricultural land”.
Some expatriates buy land in Croatia just in order to “have a piece of land in the homeland”; others in order to go in for some farming activity (usually to do with vines or olives) when they retire and go back to the old country; some buy for investment purposes. This last is because farmland is much cheaper than building land; however, it is known that the spatial and town plans in Croatia change from time. In the case of these changes, there is a chance that agricultural land that has been bought is re-zoned and becomes not building but development land. The price of this same land will suddenly skyrocket, since people pay a great deal more for building than for farm land. Then a purchaser can put up buildings on the land, for their own use, or for the market (apartments for tourists for example).

In this article we shall not deal with the problem of purchasing building land, but with one small but very important part of the Agricultural Land Law, which has a direct relation to the matter of buying and selling farmland in Croatia. At the end of 2008, the Croatian Parliament passed a new Agricultural Land Law. At the beginning of this year, in February 2010, this law was altered again, and on the basis of these changes, some legal provisions, important for all those involved in buying and selling land, will start to be applied from July 1, 2010.

1. The Agency for farmland
In this law, the legislation set out the founding and activity of the Farmland Agency. This agency is supposed to carry out a number of operations prescribed by the law, but we will refer to just a few. These are for example the following matters:
• taking part in the disposal of farmland
• acquisition of farmland in private ownership
• consolidation of farm land
• managing the land stock
• mediating in the transfer of privately-owned farm land
• helping owners of farmland in settling title and ownership problems to do with farm land
• giving its consent for the subdividing of cadastral plots of farm land.
The law provides for the Agency buying up farm land owned by corporates and individuals in the name and for the account of the Republic of Croatia and creating with it a Land Fund, which it will manage for the sake of consolidating farm land.

2. Disposing of farmland in private ownership

Provisions of Articles 81-83 of this Law define the procedure when a private owner of farmland wants to sell or lease it. From these provisions it derives that these matters can be done only via the units of local self-government (municipalities and cities), in the name and for the account of the Agency.
What this means in practice is that a private owner of farmland, if he wants to sell it or lease it to a third person, has to address the local self-government body for the area in which the land lies. He may not enter into a sale and purchase or lease agreement with the lessee or the purchaser directly, but has to offer it to the local government. Within 15 days of receiving the offer, the local government body has to put up the offer on its notice board (usually in the premises of the government, in the corridors and so on). All interested in buying or leasing this real estate can, within 30 days of the advertisement on the notice board, give a written statement to the local government body, to accept the offer. After the receipt of one or more such statements, the local self-government will propose to the Agency the most suitable bidder and send it this bidder’s statement. If the Agency in a further 15 days confirms that the procedure has been carried out in line with the Law, the local body will supply the private owner of the farmland the information about the best bidder, and the two of them will enter into a contract to sell/buy or to lease. This contract will have to be supplied to the Agency by seller and purchaser.
If no one responds to the offer displayed on the notice board and no one accepts the offer, the local self-government will repeat the procedure, until someone does respond.
And of course, the said private farmland can be bought by the Agency itself.

3. Beginning of application

These provisions of this Law were supposed to come into force on January 1, 2010. However, because of the delayed foundation of the Farmland Agency, and the fact that it has not started working, the Parliament has decided, with the changes to this Law, that these provisions will start to be applied from July 1, 2010.

4. Conclusion

As a result of all these, the sale and purchase as well as lease of farmland in the Republic of Croatia will be possible from July 1st, 2010 only via this procedure. Those who want to sell or buy or lease farmland will not be able to do so by direct negotiation with the purchaser or lessee or via adverts in papers or estate agents, only by the local government body and the Agency.
Up to June 30, 2010, farm land can be sold and purchased, leased or given out to lease, according to the general provisions about the disposal of real estate. This means in practice, direct bargain or contract between seller and purchaser.
Those who have the intention of buying or selling, taking out a lease to leasing farm land by the common procedure of direct bargaining, adverts and so on have less than a month to do so. Please let us know if you need our help.

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