Cadastre full of holes, restitution in Montenegro without end

Montenegro still does not have a regulated land management system, the cadastre is incomplete, restitution has been taking decades, and the lack of clear rules on ownership and valuation of real estate threatens legal certainty and discourages investment.

These are some of the key conclusions of the document "Country Profile of Montenegro in the Field of Urban Development, Housing and Land Management", prepared by the United Nations Economic Commission for Europe (UNECE), which warns that the country, despite formal alignment with European rules, still has a deeply fragmented and underdeveloped system of spatial and property management.

Country Profiles in the field of urban development, housing and land management are designed to help governments improve the performance of public policies in the housing, urban development and land management sector, as well as to promote sustainable development. The Country Profile of Montenegro in the field of urban development, housing and land management was prepared in response to a request from the Government, sent through the Ministry of Spatial Planning, Urbanism and State Property.

"The land management system in Montenegro remains structurally fragmented and institutionally underdeveloped, despite formal alignment with European legislative standards. The legacy of the socialist land regime, further aggravated by incomplete restitution, uneven legalization and limited cadastral coverage, continues to undermine legal certainty, investment readiness and spatial management. The lack of a specific regulation regulating the conversion of use rights into ownership rights has led to ad hoc practices and protracted disputes, especially in urban areas exposed to strong construction pressures," the document states.

As noted, restitution processes are slow and underfunded, and institutional capacities for transparent compensation management remain limited.

"Cadastral records remain incomplete in 93 cadastral municipalities, and there is no separate cadastre for utility infrastructure, which makes planning, valuation and asset management difficult. In addition, data fragmentation across multiple geoportals and registries reduces transparency and interoperability, while the National Geospatial Data Infrastructure (NIGPCG) remains under-functional. Incomplete and outdated data reduce legal certainty and limit the efficiency of real estate transactions," the document states.

It was pointed out that the country's real estate cadastre is incomplete and technically uneven, which limits access to mortgage loans, fair taxation, and the availability of reliable real estate data:

“The lack of a centralized geodetic and cadastral information system, combined with outdated surveying methods, undermines accurate and efficient real estate registration. Tax responsibilities are decentralized without adequate support to municipalities, further reducing service delivery capacity. Access to construction and agricultural land is limited due to non-transparent administrative procedures, leading to inefficient land use and underutilization of state assets. At the same time, spatial planning must reconcile development needs with environmental protection and climate resilience, especially in disaster-prone and ecologically sensitive areas.”

Disputes hinder the registration of property rights

The document points out that the transformation of the right of use into the right of ownership has been formally regulated by the Law on Property Relations since 2009, but that in practice this process still causes numerous problems. Although the law provides that the right of use over land can become the right of ownership, a large number of these rights are still registered in the cadastre, without the transformation being completed.

Valuation and taxation of real estate is hampered by the lack of a register of purchase prices, inconsistent valuation methodology, and limited municipal capacities, leading to fiscal inefficiency and an uneven tax burden.

One of the main reasons cited is the lack of detailed legal regulations, which is why procedures are often blocked by coordination between citizens, the cadastre, municipalities and the Protector of Property and Legal Interests of Montenegro. The document also notes that decisions by the cadastre on transformation often end in appeals and court cases, as both the state and local governments have the right to appeal when they believe that state or municipal interests are threatened.

"This situation creates legal uncertainty, makes urban development more difficult, hinders the implementation of urban plans and disrupts the real estate market and land management. In order for the transformation of the right of use to ownership to be carried out efficiently and transparently, it is necessary to adopt a special law that will prescribe clear procedures, institutional competencies and legally binding deadlines, with special reference to cases in which automatic transfer is justified."

"transformation due to the absence of legal obstacles," the document states.

It was pointed out that the institutional roles, especially of the cadastre, municipalities and the Protector of Property and Legal Interests of Montenegro, must be unambiguously defined, with mandatory interdepartmental cooperation and digital data exchange:

"The law should also include an obligation of transparency of operations, through regular public reporting and clear conditions under which the state can retain property based on documented public interest."

To address these problems, UNECE recommends the adoption of a special law that would regulate the conversion of use rights into ownership rights, as well as the completion of remaining restitution cases through clear procedures and compensation mechanisms. The document also states the need to establish a unified legal framework that would include the legalization of land and buildings, the acceleration of the completion of the real estate cadastre, as well as the adoption of a law on real estate valuation. It also recommends the establishment of a national register of purchase prices and a system of regular mass real estate valuations, as well as the creation of a fully functional and harmonized national geospatial data infrastructure. UNECE also recommends linking land management reforms with the regularization of informal settlements and their harmonization with spatial planning.

Bad estimates reduce municipal revenues

It was assessed that the valuation and taxation of real estate is made more difficult due to the lack of a register of purchase prices, inconsistent valuation methodology, and limited municipal capacities, which leads to fiscal inefficiency and an uneven tax burden.

“As a result, property taxes are limited in both scope and equity, reducing an important source of municipal revenue. Transparent and standardized valuation methods are needed, both for taxation purposes and for transactions in the property market. Access to construction and agricultural land is often limited by non-transparent procedures. Environmental governance is weakened by a lack of integrated spatial planning and enforcement in protected and disaster-prone areas, while the frameworks for climate policy and mining suffer from shortcomings in implementation and limited cross-sectoral accountability,” the document states.