ALBANIA Trends and Developments Contributed by: Arlind Ahmetaj and Nikol Halimi, Halimi Ahmetaj Law and Tax
through a top-tier local firm, the case exposed fun - damental flaws in how complex private investments are structured and verified in Albania. Albanian law provides for state-issued property titles and notarial guarantees; however, these mechanisms have proven insufficient when the historical chain of ownership is challenged or when public interests – such as envi - ronmental concerns and transparency – clash with private development claims. The case highlighted several structural weaknesses. First, the due diligence standards applied by local law firms remains inconsistent and often merely for - malistic. Many firms limit their work to verifying the most recent notarial deed and checking for registered encumbrances, without sufficiently examining the his - torical chain of title or conducting a litigation review – a process which, according to the professional standards of international firms, entails identifying and assessing existing or potential judicial, administrative, or regulatory proceedings that could impact the prop - erty, the transaction, or the investor (DLA Piper, 2026). For high-value transactions in coastal or protected areas, this approach is both risky and inadequate. Investors and their international advisers should demand more in-depth forensic title reviews, envi - ronmental compliance audits, and – most importantly – an assessment of the project’s “social licence”. This involves analysing relationships with the local com - munity (stakeholder engagement), a key element in securing a social licence to operate. A lack of such acceptance can lead to protests, litigation, and delays, even when a project meets formal legal requirements (OECD Publishing, 2022; Vanclay and Hanna, 2019). The experience in Zvërnec demonstrates that even major foreign investments and formally clean titles can collapse when local partners have unresolved issues with authorities or when projects are perceived as lacking transparency. Secondly, the case raises difficult questions regard - ing the good faith (bona fides) of the foreign investor. Albanian law, like most civil law systems, protects par - ties that acquire rights in good faith. However, when investors rely on local intermediaries who may them - selves be under investigation, or when permits are obtained through processes later criticised for a lack
of transparency, the defence of good faith becomes more difficult – both legally and politically. The “ Flamingo Revolution ” demonstrated that Alba - nian public opinion is increasingly unwilling to accept large-scale developments lacking transparency, regardless of formal legal compliance. For foreign investors, this creates a new category of risk that traditional legal due diligence fails to capture: the reputational and political risk arising from failures in environmental and social governance. Law firms must scrutinise these matters closely rather than relying on mere formal verification. Thirdly, the state’s role in issuing – and subsequently potentially undermining – title guarantees remains problematic. Investors received state-backed own - ership documents, yet subsequent actions by the prosecution service to freeze related accounts caused immediate practical paralysis. Although the govern - ment publicly defended the investors, the episode revealed that state guarantees are only as strong as the institutions backing them, and that co-ordination among the executive, the judiciary, and the independ - ent prosecution service remains weak, resulting in a situation that continues to be complex. The role of law firms in complex investments A matter of particular importance is the responsibility of local law firms conducting due diligence for foreign investors. In investments of this scale and complex - ity – especially those involving land in protected areas and high-value transactions – the standard of profes - sional care extends beyond a mere formal review of property titles. The law firm is obliged to conduct an in-depth analysis of the historical chain of title and to identify and warn the client of reasonably discov - erable material risks; these include historical title chain issues, potential litigation (requiring advanced searches of judicial system databases), the validity of permits in protected areas, potential risks arising from administrative or criminal investigations, and the lack of a “social licence” for the project. Law firms should not limit their work solely to verify - ing the most recent notarial deed; rather, they must raise red flags regarding clear or foreseeable risks, in accordance with their professional duty of care.
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