Easy Approval for Short-Term Rentals in New Buildings – A Legal Loophole?

Easy Approval for Short-Term Rentals in New Buildings – A Legal Loophole?

With the latest legal amendments that came into effect on January 1, 2025, a two-thirds majority of co-owners is now required to approve short-term rentals in residential buildings. Additionally, the consent of co-owners whose walls, floors, or ceilings are directly connected to the apartment intended for short-term rental is also mandatory.

While many buyers of new apartments assume these regulations protect them and allow them to influence whether their building will host short-term rentals, that is not necessarily the case. In practice, your next-door neighbor may legally rent out their apartment without your consent.

The issue lies in the process of property registration. After a building is completed and receives an occupancy permit, the developer usually registers all units (apartments, commercial spaces, garages) in the land registry under their sole ownership. Only after the full purchase price is paid do individual buyers gradually begin to be registered as owners in the land registry.

The problem arises in this transitional period, which can take considerable time. During this phase, a single signature—the developer's—is often sufficient to approve short-term rentals. Furthermore, once given, this approval is binding on future buyers of the apartment, meaning they cannot revoke it. Another significant issue is that co-owners who already rent out their apartments for short-term stays are not required to provide consent for others to do the same.

In conclusion, obtaining approval for short-term rentals in new buildings is relatively easy due to this legal loophole. The real flaw in the law is that it does not restrict the developer’s authority to grant such approvals. Additionally, developers retain excessive influence over key decisions, such as the appointment of property managers, which can significantly impact the future of the building—decisions that should not rest solely in their hands.

If you own a private villa for rent in Croatia and need a reliable rental agency, contact us – HomeRent.