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13 January 2020

Croatia's New Land Register Act

After years of criticism of the land register system, the Croatian parliament adopted a new Land Register Act aimed at creating a modern and completely electronic land registry system that provides legal certainty in the real estate business and protection of property and other real estate rights.

The New Land Register Act will ensure uniform registration times. The competent land registry court should now issue a resolution on every registration application within 15 working days of receiving the submission. In this way, applicants are given the opportunity to quickly receive information about whether their submission is suitable for action and, thus, whether it is to be expected that the competent authority will take a meritorious decision on their submission. This particular novelty is coming under fire from land registries which claim that observing this term will be a challenge, as they are already fully occupied with older and still pending registration applications.
There are several more changes aimed at shortening the registration procedure. For instance, an applicant who is abroad and does not have a local proxy in Croatia will be obliged to appoint one and indicate their address when submitting the application. This will shorten lengthy foreign delivery proceedings. If the application does not contain information on the proxy, the court will reject it.
In addition, if registration is applied for based on private documents signed by a proxy, the general power of attorney must not be older than one year from the date the document serving as the basis for the registration was drafted.
There is also an important change regarding the recording of the priority of the intended disposal or encumbrance. The respective resolution must indicate the day on which the time limit for recording the priority expires. The time limit is one year starting from the date of registration in the land register, thus returning to the original arrangement of that institute from 1996.
The New Land Register Act has also introduced a new institute: the recording of a note on extraordinary remedy, i.e. revision. It refers to situations where recording is permitted based on a final court decision and the counterparty proves that it has filed a revision against that decision (which is the basis for the entry). Therefore, this is not a revision against a land registry resolution, but against the document based on which a particular entry was made. Its purpose is to provide priority for the restoration of the land register status existing prior to the implementation of the final decision.
In some ways the effect of this recording is similar to that of recording a note on dispute. If the decision is annulled or reversed in the event of an extraordinary legal remedy, the court will restore the previous land register status in the order of priority of the record.
Interestingly, the recording as described above can be submitted before or after the filing of an extraordinary legal remedy, but within the deadline for filing a complaint or appeal against a land registry resolution based on a contested decision.
Furthermore, most actions in a land register proceeding can now be done electronically.
Notably, the Land Register Act now prescribes the obligatory transfer of entry documents in electronic form, when technical conditions provide, and introduces an electronic collection of documents.
All land registry decisions (whether issued by an authorised clerk, advisor or judge) must be digitally signed, because a collection of land registry decisions is kept exclusively in electronic form. Electronic submission is specifically prescribed for legal entities, as well as for all cases where the application is submitted electronically. There is only one exception where one type of decision will be mailed in writing, i.e. decisions approving the proposal to register the priority order that are issued only in one copy confirming that the recording has been made.
The court bulletin board is also conducted only electronically.
Land register excerpts are issued by each court regardless of the local jurisdiction of the court and by a notary public or a lawyer as an authorised user of the information system. As public documents, excerpts may also be issued through the e-Citizens system.
In addition, land books will be formed within five years for cadastral municipalities where they do not already exist or within three years for cadastral municipalities where a certain form already exists but no principle of trust in land register data applies.
All of the above will gradually lead to a complete electronic procedure in the land registers, i.e. to an electronic file.
Nevertheless, although the modernisation of the land register system was long-awaited and highly welcome, it remains to be seen how the novelties will work in practice, in particular relating to actions that can now be conducted electronically, as it is generally acknowledged that the land registries have not been properly equipped or trained to act in accordance with the new rules.


Attorney at Law | Vlahov Buhin i Šourek d.o.o. in coop. with Schoenherr