Notarised Lease Agreement

Although an ordinary lease agreement is also legally valid, a solemnized contract gives the landlord considerably greater protection because it has the force of an enforceable instrument. The key difference lies in the procedure for evicting a problem tenant. With an ordinary contract, if the tenant refuses to move out you have to bring court proceedings that can last a year or longer and cost a great deal. With a solemnized contract you can start enforcement and compulsory eviction immediately, without first bringing an action, which shortens the procedure to a few weeks. Solemnization also ensures that the contract is legally sound, because the notary public checks its content. The cost of solemnization is negligible compared with the potential cost of court proceedings. We recommend solemnization to all landlords, particularly those letting higher-value properties or letting to people they do not know well.

The price of solemnizing a lease agreement before a notary public is calculated according to the tariff, based on the value of the contract, that is, the total rent for the duration of the lease. For a one-year lease with a monthly rent of 500€ (6,000€ in total), solemnization costs around 65-110 €. For a more expensive lease or a longer term the price may be higher, up to 200 €. In addition to the basic fee, you pay for the preparation of copies and any administrative costs. We recommend asking the notary public for a quotation in advance. On the Katastor.hr portal you can buy a contract template adapted for solemnization that you simply take to the notary public – that is cheaper than having the contract drawn up by the notary. Compared with the potential cost of court proceedings for eviction, solemnization is a worthwhile investment.

Yes, you can use a solemnized lease agreement to report the lease to the Porezna uprava (Croatian Tax Administration) in the same way as any other written lease agreement. The Tax Administration does not require solemnization – it is enough for the contract to be in writing and signed by both parties. A solemnized contract does, however, offer added advantages, because the notary public keeps a copy of the contract, which can be useful if you lose your own. The lease is reported within 8 days of the start of the lease on the form Prijava činjenica bitnih za oporezivanje (Return of facts relevant to taxation). A copy of the contract is enclosed with the return. Income tax on rent is 10% of the rent received less a flat-rate deduction of 30% for costs. Solemnization does not affect the amount of tax, but it gives you better legal protection if problems arise with the tenant.

A solemnized contract gives better protection when recovering damages from a tenant, because it provides a quicker route to enforcement. If the contract clearly sets out the tenant’s obligations to maintain the apartment and liability for damage, solemnization makes those clauses directly enforceable. That means you do not first have to bring civil proceedings and wait for a final judgment in order to recover the damage. It is advisable to document the condition of the apartment in detail on move-in, with photographs and a record signed by both parties. On move-out, compare the condition and draw up a record of any damage. The deposit taken from the tenant serves to cover damage and unpaid costs. Clear contractual provisions on what counts as normal use and what counts as damage make disputes easier to resolve.