New Croatian Real Estate Law Clarifies Brokerage Rules, Not Commission Abolition

Croatia's new Law on Real Estate Brokerage has been enacted, but contrary to public perception fueled by months of sensational headlines, it does not represent a market revolution or abolish the "double commission" system as widely believed. Instead, the law primarily serves to better regulate the existing framework within the real estate brokerage industry.

A key point of clarification concerns the "double commission." The term itself is problematic, as in practice, it often involved both the seller and buyer utilizing specific services from a broker and contributing to the brokerage fee. While the new law aims to make this model more transparent, it does not mean buyers will no longer pay commissions. Buyers are still obligated to pay a fee if they formally contract the broker's services for their own benefit.

The distinction lies in the nature of the engagement. Viewing a property listed on behalf of a seller does not automatically incur a buyer's commission under the new law. However, engaging a broker for active market searching, receiving advice, property analysis, risk assessment, negotiation assistance, or coordinating the transaction process will still involve a fee. This professional service is distinct from simply facilitating a viewing.

Ivan Kovačić, a prominent Croatian real estate entrepreneur and owner of Remington Nekretnine, highlighted concerns that the public's misinterpretation of the law could have unintended consequences. He warned that if buyers are deterred from seeking professional support due to a misunderstanding that all brokerage fees are eliminated, they might enter into one of life's largest financial decisions without adequate expert guidance, potentially increasing their vulnerability rather than enhancing their protection.