Construction of Real Estate in the Republic of Croatia and the Construction Contract - Legal Guide

07/10/2025

Building a property in Croatia, whether a house, apartment building, or commercial facility, involves a number of legal and technical procedures. A key element of any construction project is the construction contract, which regulates the relationship between the investor and the contractor.

1. Legal Framework for Construction in Croatia

Construction in Croatia is regulated by several laws, including the Construction Act, the Physical Planning Act, and the Civil Obligations Act (Articles 619–636). These laws define the rights and obligations of the investor, contractor, designer, and supervising engineer.

2. What Is a Construction Contract?

A construction contract is a special form of service contract by which the contractor undertakes to carry out specific construction works according to the project documentation, and the investor undertakes to pay the agreed price.

3. Mandatory Elements of the Construction Contract

Subject and detailed description of the works
Start and completion deadlines
Agreed price and payment terms
Guarantees and liability for defects
Acceptance and delivery procedures
Dispute resolution and termination clauses

4. The Role of the Designer and Supervising Engineer

According to Croatian law, the investor must appoint a main designer and a supervising engineer. Their role is to ensure that construction works comply with the project and legal regulations. Contracts with these parties should be prepared by an attorney to clearly define liability and responsibilities.

5. Construction Permit and Start of Works

Before beginning construction, the investor must obtain a valid building permit and notify the competent authority of the commencement of construction. Unauthorized construction can lead to fines and removal orders.

6. Financial and Tax Aspects

Before signing the construction contract, it is important to clarify all costs, including taxes, notary fees, and legal services. For B2B transactions, Croatia applies the reverse charge mechanism for VAT in the construction sector.

7. Liability of the Investor and Contractor

The contractor is responsible for the quality of the executed works and hidden defects. The investor must pay the agreed price on time and provide access to the construction site. All obligations should be clearly defined in the contract.

8. Legal Assistance in Construction

Attorney Andrej Bašović provides legal support in drafting and reviewing construction contracts, communicating with notaries and contractors, and representing clients in disputes related to construction projects in Croatia. >> Law office Bašović.

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