New amendments to the Law on the Legalization of Illegal Structures will allow structures built without a building permit, which are registered in the cadastre, to change ownership in cases of execution of a mortgage or other lien, out-of-court sale, inheritance, division, court decision or enforcement order, as well as to extend their lease or use in business activities for up to three years.
The government has sent these amendments to the Parliament, and MPs will vote on them at an extraordinary session in early February, which will include about 50 more points.
The Law on the Legalization of Illegal Objects was adopted in July last year and it provided for a complete ban on their circulation (sale, inheritance, etc.).
After the law came into force, the Ministry of Spatial Planning, Urbanism and State Property, headed by Slaven Radunović, gave the opinion that the ban on trading also applies to cases of sales through bankruptcy proceedings, enforcement decisions by public bailiffs, mortgages and pledges under contracts with banks and notaries.
At that time, many bankruptcy and bailiff sales were suspended, while a large number of creditors were unable to collect their money. Amendments to Article 33 of the law were then requested by notaries, bailiffs, the banking association, and several initiatives were launched with the Constitutional Court to have it annulled.
New amendments to the law now add three new paragraphs to this article, listing exceptions to the ban on the sale of illegal facilities.
So, if the amendments are adopted, it will once again be possible to register a mortgage or other lien on illegal objects that have been entered into the cadastre; conclude an out-of-court sale agreement; conclude a lease agreement; inherit; dispose of by gift between relatives of the first order of succession; implement the division of real estate between heirs of the first order of succession; conclude a lifelong maintenance agreement between heirs of the first and second order of succession; trade in real estate based on a court decision, as well as trade in real estate in the enforcement procedure in accordance with the provisions of the Law on Enforcement and Security, when the enforcement is based on a final court decision, enforcement decision or other executive decision.
The performance of economic and other activities is permitted until the expiration of 36 months from the date of entry into force of this law.
Traffic is allowed through the entire facility if part of it does not have a building permit.
"The movement of a building or a specific part of a building with the entry 'no occupancy permit' is permitted if the building or part of the building was built in accordance with a building permit or other act permitting construction. The method of examination and the procedure for determining whether a building or part of a building was built in accordance with a building permit or other act permitting construction are prescribed by the Ministry," the amendments state.
The goal was to put more pressure on illegal builders.
In explaining these changes, the Ministry states that the previous application of the ban on trade and economic and other activities has caused significant consequences on the real estate market and negatively affected the work of notaries, bailiffs and banks.
"Therefore, it was assessed that it is necessary to specify the restrictions defined by law. Namely, the purpose of the ban on the alienation of illegal buildings is to prevent the voluntary legal transfer of illegal buildings in order to ensure the efficient implementation of the provisions of this law as a form of pressure to complete the legalization process as soon as possible. The exceptions formulated in the proposed amendment to Article 33 do not represent legal transfer within the meaning of this law, but rather inheritance or legally prescribed mechanisms for settling creditors. The aim of formulating the bans is to put pressure on illegal builders to legalize illegal buildings, because an efficiently implemented legalization process will ultimately result in a high percentage of reliability of the real estate cadastre as the basis for legal security and investment activities in all areas," the Ministry of Spatial Planning stated in its explanation.
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