Montenegro has commenced the development of a Law on Residential Leasing, aimed at establishing clearer guidelines for rents, deposits, and landlord-tenant relationships, in response to the swift growth in property prices affecting the housing market.
The Ministry of Spatial Planning has initiated public consultations, with the draft law anticipated to be completed by 2027.
This legislation is expected to cover various aspects of rental agreements, including security deposits, rent increases, maintenance responsibilities, contract terminations, and the rights of both landlords and tenants.
Currently, Montenegro predominantly relies on general contract law for regulating residential leases, which leaves numerous elements of rental relationships without a specialized legal framework.
This gap has become increasingly important as escalating property prices lead more households to seek rental options.
The introduction of a dedicated rental law may enhance legal certainty for investors while potentially imposing more formal requirements regarding contracts, deposits, and rent adjustments.
Professional landlords and rental property developers would benefit from a clearer structure for enforcing agreements, while tenants could experience improved protection against sudden rent hikes or disputes related to deposits and maintenance issues.
The reform may also facilitate greater formalization within a rental market where many transactions have historically occurred with minimal documentation.
This shift could have significant implications for tax revenue and transparency within the property market.
However, the legislation is still in its early stages, and no definitive regulations concerning rent increases, deposit limits, or notice periods have yet been established.
These specifics will ultimately determine whether the reform serves merely as a measure for legal certainty or represents a more impactful intervention in the rental market.
For Montenegro’s real estate sector, it is evident that as housing affordability becomes an increasingly pressing issue, regulatory efforts are expanding beyond construction and property transactions to encompass the functioning of the rental market itself.
