The Chamber of Public Bailiffs believes that the ban on the sale of illegally constructed buildings cannot apply to property that is part of enforcement proceedings to settle claims because "forced sale in enforcement is not a voluntary legal transaction but a public law enforcement mechanism."
This was announced to "Vijesti" by this institution. They say that they will respect the current opinion of the Ministry of Spatial Planning and suspend the proceedings against this property, although they believe that the opinion is contrary to the norms of enforcement and security, as well as the European Convention on Human Rights, which refers to the peaceful enjoyment of property and the right to a trial within a reasonable time.
The Chamber therefore requests that these normative solutions be urgently amended or that an authentic interpretation be given that would exempt enforcement proceedings from this prohibition.
However, the Ministry of Spatial Planning told "Vijesti" that the ongoing enforcement procedures, which also relate to illegally constructed facilities, must be carried out in accordance with the Ministry's official opinion.
The Law on the Legalization of Illegal Structures came into force on August 14th and contains a sentence that reads: "A structure built without a construction act or contrary to that act cannot be in legal circulation, or cannot be alienated, and no economic or other activity can be carried out in it."
Because it was not clarified whether the ban on "legal transactions" also applies to enforced collection procedures, on September 1, the Chamber of Public Bailiffs requested an interpretation from this Ministry, as the author of the Law, as to whether the ban applies only to voluntary legal transactions over that property or also to enforced collection procedures.
On September 5, the Ministry sent the Chamber an opinion stating that the ban applies “to all procedures, including the alienation procedure in the enforcement procedure.” After that, the enforcement agents suspended all sales and forced collection procedures for buildings that do not have building permits or exceed the dimensions specified in the building permits.
First proceedings suspended
This opinion last week prevented the sale of the “Riviera” hotel in Petrovac, which has been under construction for 15 years and exceeded the building permit. After resolving a multi-year dispute, the German financial institution DEG took over this property due to a loan that Euromix-trade had not repaid, and through an executor organized a public auction on August 15. The company “Vila Oliva” had the best offer.
According to information from "Vijesti", this opinion will also prevent a solution to the problem with the largest illegal facility on the coast, started with the As hotel in Perazića dol, where the Municipality of Budva has a registered mortgage due to multi-million-dollar tax debts of the owner, Nega Tours.
When asked what will happen with enforcements and forced collections on illegal properties, the Chamber of Bailiffs says that they will be temporarily suspended.
"On real estate that has the status of illegal, actions leading to alienation (sale) will be suspended or postponed, because alienation is legally prevented by a general ban on trade in such objects. Enforcement, where possible, is redirected to other assets or other property of the debtor (earnings, bills, movables, other real estate). The forced sale of the objects in question is exempted until the reason is eliminated (legalization, removal of the illegal part, etc.)," the Chamber stated.
A significant number of cases have been blocked.
When asked how many cases of enforcement against illegal buildings exist, they say that there is no centralized record that accurately identifies these cases.
"The number can only be determined after obtaining data from all offices. Preliminary, this is a significant number of cases in municipalities with intensive construction," the Chamber stated.
They point out that such a ban will make it difficult or impossible to collect legally awarded claims.
"The ban on the alienation of illegal objects effectively eliminates the most efficient source of settlement (sale of real estate), reduces the value of liens and slows down proceedings, which threatens the right of creditors to peaceful enjoyment of property and to trial within a reasonable time. Therefore, urgent normative explanations and/or amendments are needed," the bailiffs believe.
Customers knew the risk by now
They state that so far there have been no legal obstacles to the sale of illegal objects in enforcement proceedings and that the sales were carried out with a clear emphasis on the status and risks for the buyer.
"The goal was to ensure the satisfaction of creditors, with full transparency about the legal status of the property. The cadastre registered the ownership right based on the conclusion of the transfer, while retaining the existing records of illegal construction or inspection proceedings. The buyer could then initiate legalization (if the conditions were met) or bear the consequences of possible removal," the Chamber of Public Bailiffs stated.
Enforcement is not a voluntary legal process.
Their legal position, as they stated, is that a forced sale in execution is not a voluntary legal transaction but a public law enforcement mechanism.
"Therefore, we believe that a teleological interpretation (in accordance with the meaning, purpose of the legal norm) of Article 33 should exempt alienation in execution/bankruptcy from the complete prohibition of legal transactions, while retaining all records and public law restrictions. The application of a blanket prohibition on execution leads to the factual impossibility of settlement and erodes the right under Article 1 of Protocol No. 1 to the European Convention on Human Rights (peaceful enjoyment of possessions) and the right to a trial within a reasonable time. An illegal extension should not derogate from a previously established mortgage or prevent the sale of the pledged real estate in execution. The right of lien includes attachments and increases in the value of the thing," the Chamber stated.
They also point out that in cases where the creditor has received final compensation for damage due to construction on someone else's land, the prohibition of alienation prevents real settlement because it renders enforcement and protection of the property of the injured party meaningless. "We hope that the suspension or postponement of the sale of illegally constructed buildings, with the redirection of enforcement to other property, will represent an exclusively temporary solution until the adoption of an exception to the prohibition of alienation for forced sale in enforcement proceedings. We need an authentic interpretation that explicitly exempts enforcement/bankruptcy from the prohibition or an urgent amendment to Article 33 of the Law. With such an interpretation or amendment, the cadastre could register the buyer from enforcement while retaining the records until legalization or removal," the Chamber stated.
Only a final court decision can change the owner of illegal property.
The Ministry says that enforcement proceedings against illegally constructed property must be stopped, noting that illegal construction is a criminal offense and must be treated as such in courts and all institutions.
"The Ministry's interpretation cannot make it more difficult, or prevent, the collection of finally awarded claims, because final judgments of competent judicial institutions have the character of binding. The mere delivery of a final court decision to a party in a court proceeding and its registration in the cadastral records, either ex officio or by the party itself, makes it enforceable and binding. The state's intention is to legalize illegal facilities, or, if the owners of illegal facilities do not legalize them, to pay what is prescribed by law, in order to enter the legal channels as soon as possible," the Ministry stated.
When asked whether those who legally collect their claim by taking over an illegal facility from the debtor can register as its owners and initiate legalization procedures, the Ministry said that the right to register is an administrative procedure conducted before the competent Cadastre.
"With the final completion of the administrative procedure, through the Real Estate Cadastre - the Real Estate List as a final and final act of the Real Estate Administration, the party obtains the right of ownership or other form of real rights, if it is registered in the Real Estate List with the determination of his right of ownership. In this regard, we would like to point out that one of the grounds for registration in the Cadastre is a final court decision, in accordance with the cited law," the Ministry states.
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