CROATIA Law and Practice Contributed by: Marko Paulinović and Dino Vukoša, Buterin & Partneri
6.19 Right to Terminate a Lease The right to terminate a lease agreement arises both from statutory provisions and from the contractual terms agreed by the parties. Under statutory law, the lessor may terminate the lease if: • the lessee fails to pay lease payments within the agreed deadlines; • the lessee uses the premises contrary to the lease agreement or their designated purpose; • the lessee fails to perform contractual obligations (eg, subleasing without consent); • the lessee causes substantial damage to the prem - ises; or • the lessor requires the premises for the purpose of conducting its own business activities because, due to reasons beyond its control, it can no longer carry out such activities in the premises previously used In cases of material breach, extraordinary termination without a notice period may be possible. The lessee may terminate the lease if the use of the premises is prevented (eg, due to legal or physical defects), if the lessor fails to maintain the premises in a condition suitable for use or if the lessee’s peaceful possession is disturbed. The parties may contractually expand the grounds for termination depending on the specific characteristics of the lease. In the case of leases concluded for an indefinite term, both parties have the right to terminate the lease by giving ordinary notice subject to the statutory or con - tractually agreed notice period. 6.20 Registration Requirements A lease agreement for commercial premises must be concluded in written form and is frequently notarised (although such notarisation is not mandatory) in order to constitute an enforceable instrument for the collec - tion of claims and recovery of possession.
Lease agreements are not required to be registered; however, they may be recorded in the land register. In such cases, the lessor’s signature must be notarised before a public notary. Such registration provides the lessee with stronger legal protection vis-à-vis third parties, for example in the event of a sale of the prop - erty or enforcement proceedings. In practice, long-term leases, particularly those con - cerning commercial premises, are often recorded in the land register, whereas short-term agreements are usually not recorded. Registration is subject to a court fee in accordance with the regulations governing court fees, although this cost is relatively minor. 6.21 Forced Eviction In the event of termination of a lease agreement for any reason, the lessee is obliged to return possession of the premises to the lessor. If the lessee fails to do so, eviction may be enforced through court proceedings. For this reason, lease agreements are often notarised, as such agreements allow enforcement proceedings to be initiated immediately. To proceed, the notarised lease must be endorsed by the public notary with a certificate of enforceability, which is typically sup - ported by proof of delivery of the notice of termination. If the lease agreement has not been notarised, the landlord must first initiate civil litigation in order to obtain a judgment on the basis of which enforcement proceedings may subsequently be initiated. Such liti - gation may last several years, which is why it is gen - erally recommended to avoid this scenario by ensur - ing that the lease agreement is notarised. The lessee remains liable for damages arising from the unauthor - ised use of the property throughout such a period. Enforcement proceedings themselves generally last between one and two years, depending on the court and the conduct of the lessee, who may also exercise legal remedies within the enforcement procedure. At present, there is no special legislative moratorium on evictions in Croatia related to the earlier COVID-19 pandemic that would prevent the forced eviction of lessee of commercial premises, and such proceed - ings are conducted in accordance with the general legal rules.
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