CROATIA Law and Practice Contributed by: Marko Paulinović and Dino Vukoša, Buterin & Partneri
building as well as the consent of immediate neigh - bours for an apartment to be used for such purposes. During the COVID-19 pandemic in Croatia, a mora - torium on enforcement proceedings was introduced; however, lease and rent agreements themselves were not directly subject to legislative intervention. 6.16 Effect of the Tenant’s Insolvency In the event of the lessee’s insolvency, the legal con - sequences are governed primarily by the Bankruptcy Act, in conjunction with the general principles of the law of obligations. The opening of bankruptcy proceedings against the lessee does not automatically result in the termination of the lease agreement. Following the commencement of bankruptcy proceedings, the bankruptcy admin - istrator has the right to decide whether to continue the lease agreement or to terminate it subject to the statutory notice period. Furthermore, once a petition for the opening of bank - ruptcy proceedings has been filed, the lessor may not terminate the lease agreement solely on the grounds of delayed payment that occurred prior to the com - mencement of the bankruptcy proceedings. If the lease agreement continues to remain in force, the lessor’s claims incurred after the commencement of the bankruptcy proceedings (eg, ongoing lease pay - ments) are treated as costs of the bankruptcy estate and are satisfied with priority. Claims that became due prior to the opening of the proceedings must be filed as bankruptcy claims. In pre-bankruptcy restructuring proceedings, special rules apply restricting enforcement and compulsory collection measures, and the right to terminate cer - tain contracts may be temporarily limited in order to preserve the debtor’s business operations. 6.17 Right to Occupy After Termination or Expiry of a Lease Upon expiry of the lease, the lessee is obliged to return the business premises to the lessor without delay, and in the condition in which they were origi - nally received. The same principle applies to rental
agreements, except for changes resulting from ordi - nary use of the apartment. To ensure that the lessee vacates the premises on the agreed termination date, it is advisable in practice that: • the lease agreement clearly specifies the termina - tion date and the obligation to return possession of the premises; • the lessor sends a written reminder to the lessee prior to the expiry of the lease term requesting that the premises be vacated; and • the agreement includes mechanisms enabling judicial enforcement, most notably through notari - sation of the lease agreement. Notarisation allows the lessor, in the event that the lessee fails to vacate the premises, to initiate enforce - ment proceedings for the delivery of possession with - out first having to conduct lengthy civil litigation in order to obtain a judgment. 6.18 Right to Assign a Leasehold Interest A lessee of commercial premises may not assign the lease agreement to a third party nor sublease the premises without the lessor’s consent, unless such possibility is expressly provided for in the lease agree - ment. In practice, the lessor’s prior written consent is almost always required. Typical conditions imposed by the lessor include: • verification of the financial capacity of the new les - see or sublessee; • preservation of the same designated purpose of the premises; and • prohibition of competing business activities. Partial subleasing (eg, of a portion of the premises) is likewise permitted only with the lessor’s approval. If the lessee assigns its rights without the required con - sent, such conduct may constitute a material breach of the lease agreement, entitling the lessor to termi - nate the lease.
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