LAWS TO WATCH: Expropriation Act

orsat28 April 2014, LPJ Croatia Issue 82

According to the proposed legislation, in the event of strategic projects, expropriation is to be conducted by the Justice Ministry.  Other projects determined to be of state interest, will be conducted by the State Property Management Administration (DUUDI).The expropriation beneficiary will be obliged to provide evidence on the condition and value of the real estate that will be expropriated, as well as submit a valid location permit.

The Justice Ministry may decide to expedite the transfer of ownership over real estate prior to the Ministry’s or DUUDI’s non-appealable (final) decision on expropriation, if the ministry established there is a legitimate reason for such a decision and the real estate owner was compensated for the expropriation.  The compensation corresponds to the estimated market value of the real estate.

The legislation also introduces a uniform methodology for the appraisal of the market value of real estate.  The Ministry of Construction and Physical Planning will adopt a special bylaw outlining the above methodology.   The expropriation beneficiary and the owner of real estate must come to an agreement on an independent expert in the appraisal procedure.  If the agreement is not reached, the Justice Ministry itself will select the expert appraiser.

The bill envisages the shortening of the time span necessary for expropriation from four years to one year at the first instance stage, and even to an under six month procedure for projects of strategic importance.  If adequately rationalised and accepted by the Ministry of Justice or DUUDI, the proposed legislation also provides for immediate access to property prior to final expropriation resolution (in essence, “over night” confiscation).  The proposed legislation gives the executive government “first instance” judicial authority.

Note: The legislation passed the Sabor 1st reading in January 2014.  Following the adoption by the government, the bill was sent to the Sabor 2nd reading…

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