Montenegro is taking steps to expedite the legalisation of unauthorised buildings, as many properties remain unregistered within the formal planning framework. This situation hampers mortgage accessibility, complicates property sales, and limits the integration of real estate into the legal market.
The Ministry of Spatial Planning has reported that progress in legalising these properties has been slow, with only a few thousand structures regularised despite a significant number of unauthorised buildings across the nation. The deadline for registering illegal constructions has been extended to August 2027.
To alleviate financial burdens, legalisation fees can now be paid in 36 instalments. However, high costs continue to pose a challenge for homeowners. For instance, in Podgorica, legalisation fees for a 139-square-metre house can amount to approximately €15,000, excluding additional expenses related to land acquisition or regularisation.
The complexities surrounding land ownership further complicate the legalisation process. Many properties are built on land that may be partially owned by municipalities or third parties, resulting in fragmented ownership records. Such issues can delay legalisation even when property owners are prepared to cover the necessary fees.
The government plans to enhance municipal inspection capabilities by creating additional commissions and expediting case processing. Authorities will also employ updated satellite imagery to identify new constructions established after August 14, 2025, marking a clear distinction between older buildings eligible for legalisation and recent illegal constructions.
This initiative aims to formalise existing structures without encouraging further unauthorised building activities. The implications for the real estate sector are considerable, as properties lacking clear legal status often face difficulties in securing financing, with banks typically unwilling to accept them as mortgage collateral.
Moreover, discrepancies between cadastral records and actual structures can further complicate sales transactions. The legalisation process is expected to broaden the pool of properties eligible for bank financing and formal transactions, potentially enhancing market liquidity and increasing municipal revenues through taxes and fees.
A larger inventory of legally registered properties would provide banks with more collateral options for mortgages. For homeowners, successful legalisation could elevate property values while mitigating ownership-related legal risks.
Nevertheless, the financial implications remain significant. If the costs associated with fees and land regularisation remain prohibitive, some property owners may still choose to postpone the legalisation process despite the extended deadline.
This issue also impacts developers; stricter enforcement against informal construction could enhance competitive conditions for those adhering to planning regulations and support improved urban planning by offering municipalities a clearer overview of existing structures.
Montenegro has faced challenges with unauthorised construction for decades, particularly in rapidly developing coastal regions and around Podgorica. The issues at hand are not merely administrative but intersect with housing affordability, property rights, municipal finance, and public confidence in the planning system.
The August 2027 deadline provides additional time for property owners; however, effective processing and transparent procedures will be essential for achieving substantial outcomes from this programme. The economic advantages of integrating more properties into the formal system could include an expanded mortgage market, improved cadastral records, and increased transparency within one of Montenegro’s key asset classes.
