Some property owners in the "Luštica Bay" resort in Krtoli near Tivat are dissatisfied with the way in which the company "Luštica Development" (LD), which manages and develops the complex, reduces the scope of their acquired rights or the rights promised to them when signing purchase contracts, year after year.
They have a number of objections due to LD's alleged lack of transparency in presenting and calculating the expenditure of the considerable funds that owners of apartments and flats in that resort pay to LD for the annual maintenance of their properties, or rather the maintenance of the town of Luštica Bay, as well as the way in which LD acts when making decisions in the Town Assembly, which is made up of that company and residents of the resort.
"Vijesti" contacted several residents of "Luštica Bay", almost all of whom are foreign citizens, stressing that they will inform the Ombudsman institution, as well as the Delegation of the European Union to Montenegro, about the way in which, from their perspective, their rights are being violated by the operator of "Luštica Bay", since many dissatisfied property owners in that resort are citizens of EU member states. They do not rule out legal action before Montenegrin and foreign courts, they say.
Disputed right to vote
They point out that so far, around 600 properties have been sold in “Luštica Bay” and that this new tourist town currently has as many residents as are members of the so-called City Association and have the right to vote in it in accordance with Article 12.3 of the City Association Statute. It stipulates that the votes of members are expressed through “Voting Points” and that the number of these votes is determined proportionally to the area of the property, i.e. approximately one voting point for each square meter. The same article additionally stipulates that the founder, the LD company, must have at least 50,1% of the total voting points, even if its actual share falls below that percentage. Article 12.6 of the Statute also links the quorum of the Assembly to 50,1% of the total number of voting points, and not to the number of members present. The LD company bases its management and decision-making rights in the City Association on almost 7 million square meters of leased state land on the Luštica peninsula on which it is building this resort, and not on the basis of its possible ownership rights in specific real estate, which applies to the residents of the complex.
"Since the Luštica Bay Town Association was established as a non-governmental association, Article 23, paragraph 1 of the Law on Non-Governmental Organizations of Montenegro applies to its Assembly. According to this provision, all members of the NGO must have equal voting rights. Therefore, voting according to the number of square meters of leased land and not of constructed facilities owned by the LD company, as well as guaranteeing at least 50,1% of votes to the founder, is legally very controversial and there is serious reason to consider it contrary to the current Montenegrin law," say representatives of dissatisfied property owners in the luxury resort.
They claim that out of a total of about 600 owners, more than 150 are dissatisfied and that they constantly express this to LD, but that they most often do not receive a final response to these comments and suggestions from that company, but only a protocol notification "that they have been forwarded to the authorities for consideration" and that the submitters will be informed of their decision later, which, as dissatisfied tenants say, usually never happens.
In addition to having a majority in the City Association, LD has also strangely designed the City Association Board of Directors to have an even, not an odd, number of members, and according to dissatisfied tenants, the company appoints a majority of clients who agree with its business policy. Currently, this Board consists of members Regina Schroeder, Predrag Nenezic, Vladimir Radulović, Boris Vujicic i Vlade Divac, and Branislav Simović as an authorized representative of the property owner. In addition to the six of them, an employee of LD participates in the work of the Board as an “observer” Mohamed Abouarab, that is, Oudad W. Kheir as a “representative” of LD.
LD did not respond to "Vijesti"'s questions on the basis of which specific law in force in Montenegro is the voting system in the bodies of the Luštica Bay City Association organized in a way that provides LD with a constant and guaranteed majority and a practical monopoly on decision-making.
LD did not comment on the claims of dissatisfied residents that the company is allegedly preventing them from forming their own new NGO that would speak out in public and protect their interests, nor did it confirm or deny the information that the former Prime Minister of Montenegro is allegedly among the dissatisfied residents of Luštica Bay. Igor Luksic.
This company, whose majority owner is the Egyptian-Swiss consortium "Orascom Development", but in which the Government of Montenegro also holds about eight percent of the shares, did not respond to a request to comment on the dissatisfaction and other specific allegations of its residents who have objections to the way the resort is managed, the rising prices of LD services and the simultaneous reduction in the scope of services that LD guarantees to residents when it comes to access and use of shared facilities in the city, primarily the beach.
Issues "addressed" in a separate document
"Most of the questions you have raised have already been addressed in detail in communication with the members of the City Association, including a written Q&A document that was submitted to all members prior to the last Assembly, as well as during the Assembly itself. We would like to point out that the Luštica Bay City Association currently has 574 members, while at the last Assembly seven members voted against the proposed decisions," LD told "Vijesti" by providing a 19-page document containing answers to a total of 56 specific questions that dissatisfied residents posed to LD before the last Assembly of the City Association held last week.
In those responses, LD stated that "'Luštica Bay' is still not a finished city and that approximately 15% of the total project has been completed so far."
“For this reason, the governance model is not designed only to represent the interests of current owners, but also to protect the interests of future owners and enable the successful implementation of the overall master plan. The existing governance model is based on the principle of responsible governance in the interest of the community. During the project development phase, the founder (LD) has the role of preserving the long-term vision and a trustee who acts in the interests of both current and future owners. This responsibility includes preserving the integrity of the development, ensuring continuity in decision-making, as well as maintaining standards and quality of services that will benefit the entire community in the long term,” LD stated, adding that “this governance model is not sustainable.”
“The Founders’ control is temporary and gradually diminishes as the project progresses and the number of owners grows. As new buildings are completed and transferred to owners, the balance of influence naturally changes, following the development of the community. This principle is known as the ‘Sunset Control System’, or the system of gradual cessation of founders’ control. Democratic participation is a key element of any successful community, but equally important is responsible governance in a city that is still under construction. Democracy represents the interests of those who are part of the community today, while responsible governance protects the interests of those who will only join it,” they told the dissatisfied residents.
They emphasize that "the management company plays a key role in ensuring the sustainable development and efficient functioning of the destination."
“Within this responsibility, it will continue to promote the active involvement of owners, seek their feedback on issues affecting the community and take their views into account when making strategic decisions, while aligning the interests of current and future owners with the long-term development goals of the destination.”
Dissatisfied residents also raise issues with the rising prices of services they pay LD for building maintenance, or rather city maintenance, which last year amounted to a total of 97 euros per square meter per year for a 62-square-meter apartment in the "Marina Bay" neighborhood of this resort. In addition, as a separate item, residents pay the company overhead costs (consumption of electricity, water, sewage, garbage collection), which are provided exclusively by providers under the direct control of LD.
"The increase in prices of these fees and services in the period from 2022 to the end of 2025 for a facility in the 'Marina Bay' neighborhood was 70 percent, while for facilities in the Centrale neighborhood the price increase was as much as 112,7 percent. There is no explanation for such a thing in inflation, because it was 31 percent at the same time," claim the interlocutors of "Vijesti".
LD denies claims by dissatisfied residents that they cannot obtain data on cost planning and, in particular, reports on what the money they pay to the company as maintenance fees for facilities, or the city, is specifically spent on. They emphasize that, “in order to provide greater transparency and a more detailed overview of the costs of maintaining the city and residential facilities, as well as a clearer insight into the way common fees are distributed,” they have introduced a new system.
"As of July 10, the first phase of the Archibus Computer-Assisted Facility Management (CAFM) software has been implemented... Reports will be available to the community at any time in the future, and detailed overviews will be presented to the community at each City Association Assembly," they said, adding that the new system "will enable them to, in addition to the annual budget and audited financial reports, provide owners with significantly more detailed and systematic information on operating expenses, which will give them better insight into the distribution and use of City Association funds."
Two beaches available
Disgruntled residents are particularly outraged by the reduction in their access to beaches at Luštica Bay. They claim that when the first buyers of properties in the resort signed purchase agreements with LD, the company promised residents unlimited and free access to a total of five beaches in the resort, but that this year they are only able to use two, and that under further reduced rules of use.
“They have introduced an obligation for us to reserve a spot online on the 'Chedi' and 'Marina' beaches 24 hours in advance, or by midnight the following day at the latest. Because there are not enough sun loungers on the beaches for all residents, they have also introduced restrictions, so that for a one-bedroom apartment you can reserve a maximum of one set of two sun loungers and a parasol, while for two- and three-bedroom apartments it can be a maximum of two sets. So, if you have six people in a three-bedroom apartment, four of them can enter the beach and get free sun loungers with a prior reservation and a QR code, while the rest must pay an additional set at a price of 150 euros. In addition, you are not allowed to bring your own towels to the beach, but only take LD towels at the entrance, which are charged at a price of 5 euros per piece, in cash, without the possibility of paying by card and issuing a fiscal invoice. The other three beaches in the resort have been subleased to third parties, so now residents also have to pay for entry and use of beach furniture there, albeit at slightly more favorable prices. compared to the rest of the public. Unlike in previous years, free boat transportation from the marina to these beaches has been abolished for residents, so now we have to pay 5 euros for a return ticket, again in cash and without issuing a fiscal receipt," the dissatisfied residents state.
LD did not respond to questions from "Vijesti" to comment and explain this. In a Q&A document they previously provided to residents, they claim that the resort's beach capacity has been increased by 25% and that "the total number of sun loungers available to the community during 2025 was 532, while for the 2026 season that number has increased to 662."
They state that "the primary goal of introducing the reservation system was to more efficiently manage the use of sun loungers and beach facilities, in order to provide all owners and guests with fairer and more organized access."
“The system has also enabled more precise monitoring of occupancy, better access control and the collection of reliable data on beach usage. Such data is an important basis for planning future activities, determining the required capacities and allocating resources, with the aim of adapting services to the real needs of the community. During the initial implementation of the system, certain unforeseen challenges also emerged,” they admitted, stating that this has since been abandoned because “it has been shown that the reservation system is not necessary at this time”. However, they do not rule out the possibility of it being “re-implemented in the future if the need arises.”
Development dictates a new organization
They explain that as Luštica Bay has developed and grown over the years, the number of owners, tenants, and guests using the shared facilities has also increased.
“While this is an indicator of the successful development of the destination, it also imposed the need for more orderly management of the use of shared facilities, especially during the summer season when the load is highest. During the period when the community was smaller and demand was significantly lower, capacity constraints were not as pronounced, so the organization could be more flexible. However, as the number of users grew, it became necessary to implement a more consistent and organized method of capacity management, in accordance with the city rules in force since 2021, in order to preserve the quality of services, the availability of shared facilities and their long-term sustainability,” the company claims, adding that “the adjustment of certain benefits for owners and services that have so far been available free of charge stems from two key goals: reducing long-term dependence on subsidies provided by the investor and ensuring the financial sustainability of the city's operations.” They state that this year the previously free boat service for residents from the marina to the beaches on Oblatna and Pecka has been entrusted to a third party.
"As a private business entity, this company organizes its timetable in accordance with demand and operational needs, in order to provide an appropriate level of service. When entrusting this service to an external operator, the condition was set that the boat transport be carried out without making a profit," LD stated, adding that residents have access to free road bus transport from the "Marina Bay" and "Centrala" settlements to these beaches.
When asked by apartment owners whether the benefits presented to them when purchasing a residential unit could be changed through city rules, the Housing and Housing Department responded in the affirmative.
“Within certain limits, yes... The basic rights arising from ownership of a housing unit remain unchanged. However, the manner of using common facilities and certain benefits intended for owners may be subject to changes when necessary for the sake of more equitable, efficient and long-term sustainable management of the settlement,” explained the LD, noting that all changes to the city rules “are adopted in accordance with the procedure provided for in the City Association’s governance system.”
"The proposed changes are presented to the City Association Assembly, which considers them and decides on them by voting in accordance with the applicable rules," concluded the company, which has a guaranteed permanent majority to make decisions in that Assembly.
They are reducing their participation in the City Association.
LD explains that “the City Association fees (the amount and constant increase of which some residents complain about) are determined on the principle of covering actual costs,” and that the amount of each owner’s annual fee depends on: “the total planned costs for the settlement to which his housing unit belongs; the total area of all housing units in that settlement; and the area of his housing unit.” They confirmed that LD is reducing its own financial participation in financing the City Association and stated that during the earlier stages of the project’s development, LD “allocated significant funds to finance various shared services and facilities in order to support the development of the destination and ensure a high level of service in the initial stages of its development.”
"This also included subsidizing certain operating costs that were not originally intended to be permanently financed by the investor. As the community grows and develops, the long-term goal is to establish a sustainable and financially independent business model that will enable the continuous provision of quality services, while simultaneously supporting the further development of the project. In line with this goal, LD is gradually redirecting part of its financial resources from subsidizing current operating costs to new investments in infrastructure, shared facilities and the next phases of project development," LD states.
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