Private housing rentals from 2025 will be directly linked to the new property legalization law
Private housing rentals will now be tied to the legal status of properties: since August this year, the Law on the Legalization of Unauthorized Buildings has been in force, which for the first time directly links the ability to rent accommodation to tourists with the legalization process....
Private housing rentals will now be tied to the legal status of the properties: since August of this year, the Law on the Legalization of Unauthorized Buildings has come into force, and for the first time it directly links the ability to rent accommodation to tourists with the legalization process. This decision was a response to a long-standing problem: a significant share of tourist properties in the country were operated without the required permits, creating risks for both owners and guests themselves.
Private housing rentals: temporary allowance and mandatory conditions
According to the law, owners who have submitted an application for legalization and met the minimum technical requirements will be able to continue renting out their property for up to three years. This transition period makes it possible to preserve part of the tourist accommodation capacity while gradually bringing the market into the legal framework.
The mandatory set of conditions includes:
a declaration of compliance with technical standards,
property and guest insurance,
submission of legalization documents.
According to the chair of the Association of Private Housing Landlords, Branka Djoganović, the new law acts as a filter: tourists will be able to stay only in properties that are recognized as safe and meet basic standards.
Liability and fines
The law sets strict rules not only for owners, but also for state institutions. Thus, officials in public authorities who fail to ensure compliance with the requirements or do not provide documents within the prescribed deadlines may be fined amounts from 60 to 4,000 euros. This measure is aimed at increasing transparency and eliminating corruption risks.
In addition, owners of illegal properties are required to pay an annual compensation for the use of space — from 0.5% to 3% of the average construction cost per square meter, depending on whether documentation for the property has been provided.
The authorities emphasize that the main goal of the reform is to create a safer and more competitive tourism environment. During the transition period — up to three years — owners will be able to operate in the status of “in the process of legalization.” But if, by the end of that period, the property does not receive official approval, its use for tourist purposes will be prohibited.
Everything you need to know about the new legalization law
We wrote in detail about the new law in the previous article. The new law establishes the procedure for legalizing unauthorized buildings, describes the legal consequences of obtaining approval, and determines which properties can be legalized.
What is considered an unauthorized property
According to the law, an unauthorized property is a building or part of a building that was:
built, reconstructed, extended, or added to without a building permit or another official act authorizing construction,
carried out in violation of the permit conditions or exceeding the permitted area defined by urban planning and technical standards.
The category of unauthorized properties also includes:
auxiliary structures that form a functional whole with residential, commercial, or mixed-use properties,
buildings used in agriculture, for the protection and preservation of cultural heritage, or for the improvement of public green areas,
properties where rough structural work was carried out without a permit.
In other words, this refers to all buildings that do not have “clean” documents and have so far existed in a kind of gray zone.
The impact of the new law on real estate transactions
As of today, notaries have suspended transactions involving properties whose status is “nema dozvole” (no permit). This is related to the entry into force of the new legalization law. Now selling or renting out real estate without confirmed legalization documents has become impossible.
The law provides for a transition period. Owners of unauthorized properties must, within six months submit legalization documents and obtain a ruling from the urban planning authority. Only after that will they be able to fully dispose of their property.
Many are now waiting for clarifications and additional instructions, but it is already clear that the process of obtaining permits is becoming mandatory for everyone planning real estate transactions.
The new law will especially affect coastal regions — Budva, Kotor, Bar. It is here that the largest number of buildings “bypassing the rules” has appeared over the past decades. Many owners added extra floors, expanded terraces, or built entire houses without permits. Now they have only two options: legalize or lose the ability to dispose of the property.
Rural areas will also face difficulties, where little attention has traditionally been paid to the documentation of construction. For small businesses, the legalization process may turn out to be expensive and bureaucratically complicated.
Checking compliance with urban planning and environmental standards.
Decision on the possibility of legalization.
If the outcome is positive, the owner receives official permission and fully legal rights to the property. Otherwise, the structure may be declared subject to demolition.
I want to legalize my property: what should I do?
Lawyers advise not to delay the legalization process. It is important to remember that not all buildings can be legalized: if a structure was built in a protected zone or violates sanitary standards, obtaining permission will be extremely difficult.
If you have property in Montenegro, that falls under the new legalization law, our specialists can help you understand the procedure. We know which documents are needed, where and by what deadlines to submit them, and what to consider so that the property officially receives legal status. This approach will избавит from unnecessary bureaucracy and will make it possible to sell, rent, or use the property without problems in the future.
For more information, contact us — sales@mdrealty.meOr contact us at +382 67 447 626 (WhatsApp, Telegram)
Private housing rentals from 2025 will be directly linked...
