The Law Concerning Real Estate  Agency

The Law concerning Real Estate Agency, published in the Official Gazette No. 170/07 from 19 October 2007 (hereinafter: the Law) governs in detail the Contract on Agency in Real Estate Trade.

The Law provides for the conditions for dealing in agency in real estate trade, concluding contracts on agency in real estate trade, general terms and conditions, rights and obligations of  agents in real estate trade, agency brokers in real estate trade and mandators, agency fee, agency certification exam, and control and administrative measures over the performance of agency in real estate trade.

The Law entered into force on 27 October 2007, and its provisions are in application therefrom, all  except the provision of Article 5 Paragraph 3 which is to enter into force upon the admission of Croatia into the EU.

Specifically, in line with Art. 5 Paras. 1 and 2 of this Law the real estate agent  (hereinafter: the Agent) is obligated to insure and renew insurance from liability for damage which it could cause to the mandator or to third persons in acting as an agent with an insurance company in Croatia. In line with Para. 3 of the same Article the Agent will be able to be insured with an insurance company from a member state of the EU or the European Economic Area.

Also, it is important to emphasize that the legislator has imposed an obligation for agents, who are dealing in agency on the date of entry into force of this Law, to obtain a Decree on the fulfillment of conditions for acting as an agent within eighteen months from the date of entry into force of this Law. The agent that does not obtain the Decree within the given time frame, ceases to have the right to act as an agent.

The Law governs the Contract on Agency in real Estate Trade in detail. In its relevant part, the Law provides that the Contract must be in writing, and that it is concluded for a determined time period. Apart from that, the Law determines the highest agency fee rate and works out the parties' rights and obligations more  detailed.

If a certain issue is not particularly governed by this Law, and it concerns the rights and obligations of the parties, the provisions of the Law on Obligations will apply, primarily its provisions concerning the agency contract.

In essence, the provisions of this Law do not depart from the remaining provisions of the Law on Obligations, but they do introduce certain particularities related to real estate trade, with the purpose of achieving order in this field, and a more specific defining of rights and obligations of the parties.

Attorneys at law
Vukić, Jelušić, Šulina, Stanković, Jurcan & Jabuka

Nikole Tesle 9/V-VI
51000 Rijeka

Phone: 051/211-600
Fax: 051/336-884