A guide through renting an apartment

1. Prepare an apartment for rent

To make it easier to rent an apartment, follow the policy if you would live and stay in that apartment. Accordingly, the apartment should be clean and tidy, ready for a new tenant who will want to stay as long as possible in such an apartment. The furniture should not be the newest or the most expensive but it should not be older than 20 years. Old furniture should be renovated if it is of good quality, or replaced with new ones. Make sure all appliances are working properly, and take your private and personal items with you. Most often, our apartments are rented fully furnished with all appliances, but it is up to the Lessee to provide linen, kitchen utensils and other necessities.

2. Rights and duties of the parties

When renting an apartment, there is a legal obligation to sign a lease agreement, which clearly defines the obligations of both parties. You should not even have a second choice because you are exposed to housing insecurity or possible pecuniary damage.

The Lessor’s principal obligation is to pay the lease tax, to pay the maintenance building fee if any, and to declare the Lessee’s residence.

The Lessee is obliged to pay the agreed monthly rent, to pay other month utilities, to send to the Lessor monthly receipts of the paid bills and to keep the apartment with the attention of a good host. The Lessor may, with prior notice to the Lessee, inspect the apartment once a month or less, depending on the need and relationship with the Lessee.

3. To Notarize the lease agreement with a public notary or not?

Our recommendation is to make sure that the contract is certified by a notary public, but a self-signed contract is also valid before a court. An additional security for the lessor is a ‘solemnized’ contract where the notary takes care of the form of the contract, the content and verifies the signatures on the contract.

Such contracts usually include a foreclosure clause where, in the event of non-payment of utilities or late payment of rent, it may initiate enforcement proceedings against the Lessee and seek eviction, all without initiating legal proceedings.

4. What is the deposit amount and should the apartment be insured for possible damage?

It is a practice to give one or two monthly rents when signing a lease agreement, which can be used in the event of default on the contract, primarily failure to pay overheads or rent, and for any damage caused to the apartment by the Lessee’s fault.

If the lessor chooses to insure the apartment, then it usually covers damage from fire, earthquakes, burglary and it is possible to insure the movable property in the apartment.

Such insurance is covered solely by the Lessor, and the Lessee may possibly insure his own movables which he has brought into the apartment, and they have a certain value.

5. How is the rental tax calculated?

When renting an apartment, the landlord is obliged to pay income tax on the property. Property income tax is payable on the amount of rent less 30% of expenditures at a rate of 12%. The amount of tax is calculated by surtax at a rate that depends on the rate prescribed for the city or municipality where the lessor has his registered residence.

Example of calculating property tax:
Rent amount: 2000,00 Kn
Income tax base: 2000.00 – 30% = 1400 Kn
Income tax: 1400 X 12% = 168 Kn
Surtax of 15% (for city of Split): 168 X 15% = 25,2 Kn
Total: 193,2 Kn

6. Termination of contract and notice period

The Lessor can cancel the contract within 30 days by sending a written notice to the Lessee who does not fulfill the obligations under the contract. The cancellation itself must be in writing and the Lessee has a 3 month deadline for eviction.

The Lessor also has the right to terminate the contract due to a breach by the Lessor, and if the contract is concluded for an indefinite period then Lessee must notify the Lessor at least 3 months in advance.