During 2023, there have been significant changes in the legal regulations in the field of planning and construction as well as in terms the Real Estate Cadastre in Serbia. In August, amendments to the Law on Planning and Construction entered into force, while in November, amendments to the Law on the Registration Procedure with the Cadastre of Real Estate and Utilities (which is now called the Law on the Registration Procedure with the Real Estate Cadastre and Infrastructure Cadastre) entered into force.
According to the report of the Serbian State Audit Institution, for the period between January 1, 2021, and June 30, 2023, the state authority exceeded the prescribed deadline in about 62% of the cases of issuing location conditions and in about 59% of cases of issuing construction permits. Issuing use permits was not much better, with about 67% of cases also exceeding the prescribed deadline. For this reason, amendments to the law primarily aim to speed up the procedure for issuing these permits.
Besides that, the amendments introduced some new terms, such as “brownfield locations” (locations of industrial and commercial content, which have not been used for a long period of time but have the potential for urban renewal) and “green building certificate” (a certificate which verifies that the building has met the green building criteria). The amendments also introduced the obligation to obtain an insurance policy against damage to third parties. Environmental protection is also taken into account because now, proof of the movement of construction waste must be submitted before obtaining a use permit.
However, perhaps the most significant change to the law – or at least the one about which there was the most controversy in public – refers to the abolition of the conversion of the right of use into the right of ownership against a fee. Namely, with the entry into force of these amendments, the Law on the Conversion of the Right of Use into the Right of Ownership with a Fee ceased to be valid. As a result, the conversion on the construction land can be done free of charge in most cases. According to the data of the Ministry of Construction, Transport and Infrastructure, in the previous years, during which this law on conversion was in force, the value of the income generated on the basis of the fee for converting the right of use into the right of ownership amounted to approximately EUR 30 million. However, despite the application of this law, more than 94% of conversions were done without compensation. Also, it is stated that the conversion procedures took a long time and that all these delayed investments in about 5,000 locations and resulted in missed income that could be generated on the basis of investments, income from contributions for construction land, VAT, or property taxes. Still, despite the positive aspects of the abolition of conversion cited by the Ministry, part of the public believed that the abolition of conversion with a fee is against the public interest because certain categories of persons are enabled to acquire property on construction land free of charge. Nevertheless, the Minister stated that the abolition of the conversion made it possible to start several large projects, but that the real effects of the abolition of the conversion with fee will only be seen this year. Therefore, it remains to be seen whether by abolishing the conversion with a fee, the decades-long issue of the conversion of right of use of the construction land will be resolved in an appropriate manner.
The most significant change to the Law on the Registration Procedure with the Cadastre is that requests for registration in the Cadastre can now only be submitted in the form of an electronic document through professional users (registered lawyers and geodetic organizations), with the exception of legal remedies which can still be submitted in the form of a paper document. This change has been widely criticized in the public, but the Republic Geodetic Authority states that during the first months of implementation of the new system, lawyers submitted four times more requests than in the same period of the previous year, and more than 55% of the received requests were submitted outside normal working hours. This shows that the new system in the Cadastre is in accordance with the needs and habits of citizens because instead of traditional physical counters that work five working days for eight hours, citizens now have electronic counters that work 24/7.
By Nenad Vukcevic, Partner, Vukcevic Law Office
This article was originally published in Issue 11.2 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
