The new law prohibits real estate transactions in Montenegro without a building permit

The new Law on the Legalization of Unlicensed Buildings, which entered into force on August 14, introduces significant changes to the real estate market in Montenegro. The law establishes a clearer procedure, stricter regulations, and more efficient mechanisms for construction control. Within 120 days, the law also provides for the establishment of a dedicated authority – the Agency for Legalization – while owners of unlicensed buildings are required to register their properties in the cadastre within six months.
In this article, you will learn what the Law on the Legalization of Unlicensed Buildings in Montenegro means for property owners and real estate buyers, what restrictions apply to transactions and business operations, and which types of properties cannot be legalized.

What is considered an unlicensed building

According to this Law, and as provided in Article 2, the term unlicensed building refers to the following:
- An unlicensed building is any building or part of a building that has been constructed, reconstructed, extended, or upgraded without a building permit or another act authorizing construction, or contrary to such an act.
- An unlicensed building, as defined in paragraph 1 of this Article, also includes any part of a building that exceeds the surface area defined by urban-technical conditions, a building permit, or another authorizing act.
- An unlicensed building also includes any auxiliary structure forming a functional unit with a residential, commercial, or mixed-use (residential-commercial) building, as well as structures serving agricultural activities, the protection and valorization of immovable cultural property, or the arrangement of public green areas, as well as other types of auxiliary structures as defined by the law governing construction. This applies where such structures have been constructed, reconstructed, extended, or upgraded without a building permit or another authorizing act, or contrary to such an act.
- An unlicensed building, as defined in paragraph 1 of this Article, also includes residential, commercial, and mixed-use (commercial-residential) buildings in which rough structural construction works have been completed for at least one floor (i.e., foundations, columns with beams, walls, and a slab above the walls, or a roof structure, with or without a roof). This applies where such works have been carried out without a building permit or another authorizing act, or contrary to such an act.
- A commercial building, or parts of mixed-use (commercial-residential) buildings referred to in paragraph 3 of this Article, include shopping centers, exhibition centers, fairgrounds, office buildings, administrative buildings, warehouses and storage facilities, as well as facilities for tourism and hospitality activities, constructed, reconstructed, extended, or upgraded without a building permit or another authorizing act, or contrary to such an act.
- Under paragraph 4 of this Article, industrial buildings and artisan production facilities are also considered unlicensed buildings.
- State-owned buildings of general interest, as well as local buildings of general interest, within the meaning of the law regulating construction, are also considered unlicensed buildings if they have been constructed, reconstructed, extended, or upgraded without a building permit or another authorizing act, or contrary to such an act.

Main requirements for property legalization

In accordance with the Law on the Legalization of Unlicensed Buildings, in order for an unlicensed building to be legalized, the following conditions must be met (Article 6):
- The building must be visible on satellite and aerial photogrammetric imagery.
- It must be registered in the real estate cadastre.
- It must not be located on land designated by planning documents for the construction of infrastructure or other facilities of general public interest.
- Its surface area, or part of it, must not exceed the regulatory boundary or the property boundary line if the building is located on land without an existing valid planning document.
- Property and legal relations concerning both the building and the land on which it was constructed must be resolved.
A significant innovation introduced by this Law is the use of satellite and aerial photogrammetric imagery for the first time in this process. These images will serve as the basis for deciding whether a building may be legalized. Furthermore, the Law explicitly provides that buildings not recorded on such imagery cannot be registered in official records nor subsequently included in legal transactions, which has a major impact on property sales and real estate investments.

Buildings that cannot be legalized

Temporary structures cannot be legalized, nor can buildings constructed with inappropriate materials or in a manner that does not ensure safety, stability, and long-term usability. In addition, any building that is the subject of a court dispute is automatically excluded from the legalization procedure. The assessment of whether a particular building meets the basic technical and safety requirements is made by the competent local government authority during the legalization process, as stipulated by the Law.

Legal risks of trading unlicensed properties

The sale or purchase of real estate in Montenegro that has not been legalized or registered in the cadastre carries significant legal risks. Buyers and sellers may be subject to sanctions, while ownership rights can be challenged or automatically transferred to the state.
Article 49 of the Law provides:
“The state property authority, or the local government authority responsible for property, is obliged, within 30 days from the date this Law enters into force, to publish a public call inviting owners of unlicensed buildings constructed on state-owned land, or land under the ownership rights of a local self-government unit, to submit an application for registration of such buildings in the real estate cadastre within six months from the date this Law enters into force. The notice must also include a warning that, if owners fail to initiate the registration procedure within the prescribed time, ownership of the unlicensed building will be determined on the basis of the data contained in the real estate cadastre and registered as state property.
Furthermore, ownership of an unlicensed building constructed on state-owned land, which is recorded in imagery referred to in Article 7 of this Law or otherwise documented under Article 27, but for which the owner has not submitted an application for verification of the as-built survey or for registration in the cadastre, shall be determined by decision based on the data from the real estate cadastre.
The decision referred to in paragraph 2 of this Article must be issued by the competent state property authority for unlicensed buildings constructed on state-owned land, or by the competent local government property authority for unlicensed buildings constructed on land under the ownership rights of a local self-government unit, after the expiry of six months from the deadline for initiating the registration procedure specified in paragraph 1 of this Article.”

Limitations on the sale and operation of unlicensed properties

Article 51 provides for the registration of prohibitions on transfer and prohibitions on conducting business activities for all unlicensed buildings. This effectively restricts the sale, transfer, or use of such properties until they are legalized.
The procedure for registering a prohibition on transfer and a prohibition on conducting economic or other activities in an unlicensed building, for which a record exists in the "G" list (real estate list) — i.e., no final expert supervision report, no occupancy permit, no building permit application, built without a building permit, or exceeding the building permit — must be initiated and carried out by the Cadastre within 36 months from the date this Law enters into force.
The Cadastre is also obliged to register these prohibitions for unlicensed buildings for which the registration procedure in the real estate cadastre under Article 48, paragraph 1 has not been initiated, as well as for buildings for which no legalization decision has been issued within 36 months from the date this Law enters into force.

You can read the full text of the Law on the Legalization of Unlicensed Buildings via the following link: https://www.sluzbenilist.me/propisi/A14F4A73-7CD3-4BFD-8F77-FE0109089D04?page=1. 
For all information regarding the legalization of unlicensed buildings and safe real estate transactions in Montenegro, our agents are here to assist you. Buy and sell property with confidence – contact Amfora Agency today!