Croatia: water views - but legal?

Just after the war ended here in 1995, a three-bedroom house on an island with a sea view could be had for $24,000. Today, the same house commands at least $184,000.

Global real estate lust has spread to the Adriatic, turning this picturesque coastal town into a battleground between local developers looking to profit from a swarm of foreign home-buyers, and government officials looking to strengthen building codes.

Croatia's tourist boom - nearly 8 million foreigners visited last year - is prompting more and more non-Croatians to buy or build houses here. Property companies catering to foreigners have sprung up all down the coast.

Mark Campbell is proud of his new Dubrovnik apartment, but the Briton has a message for other foreigners: "You have to have a lawyer see if it's a bona fide building: Did they have the land they claimed to have? The permissions for building? You've got to be prepared for it."

Ten years ago, the newly independent country had few laws regulating building, and those connected to President Franjo Tudjman or his party could build pretty much whatever they wanted. Today, the government has not only passed property laws, it's also enforcing them.

And the bulldozer is their latest weapon. Local developers who built four houses without permits on an island some 135 miles northwest of Dubrovnik got a nasty surprise late last week when a government-authorized demolition crew started pulling down the houses.

Croatia's environmental protection ministry hopes that the widespread domestic media coverage of this and other actions, along with the fact that 300 buildings were razed last year, sends an unmistakable message to illegal builders.

"We're seeing less and less illegal building because of that," says ministry spokeswoman Kata Gojevic by telephone from Zagreb. "If they're building on an area where they're not allowed, [the building] will have to be removed," she says. "Just like any other country, you need the proper permits."

But permits can take months to be approved - if the papers exist at all. Many properties have been handed from father to son for generations without deeds or titles. Lawyers who can navigate the sea of paperwork are essential for any property company wanting to stay in business. Dream Property Croatia, for example, has an in-house lawyer to help their clients, most of whom are British and Irish.

"It's no more risky to buy in Dubrovnik than it is in Dublin if you follow the right steps, but people who don't follow the right steps are at a tremendous risk," says company managing director Kieran Kelleher.

Mr. Kelleher welcomes further regulations like Dubrovnik's release of the area's zoning plan, which he says property developers have been waiting for for a year and a half, even though the Dubrovnik property market is nearly played out by now.

But is it enough? Dr. Stasa Puskaric, an environmental science instructor at the American College of Management and Technology, says the damage has already been done.

"There's no logic in this building," he says, surveying the jumble of houses on the town's wooded Lapad peninsula. "In my eyes, [the regulations] are too little and too slow in relation to all the development that's happening now."

Dr. Puskaric also points out that the new enforcement is an ad hoc effort, as there's no collaboration among the ministries for construction, environmental protection, health, and science. The real challenge is to change Croatian attitudes at a time when tourists are increasingly demanding the natural beauties they can't get at home.

"Should we use [our natural resources] to build concrete hotels? We have something that others do not, and it's a matter of using it in a different way," he says.