MONTENEGRO Law and Practice Contributed by: Milan Keker, Aleksandra Bujkovic, Ivan Pejovic and Iva Rolovic, Keker, Bujkovic & Pejovic
• mandates that title to real estate is transferred only upon registration with the Real Estate Administra - tion. The Law on Obligations: • governs contractual relationships related to real estate, including: (a) sale and purchase agreements; (b) gift agreements; and (c) other legal bases for transfer of ownership; and • prescribes formal requirements and regulates con - tractual obligations and liabilities. The Law on Notaries requires that: • all real estate transfer agreements must be notarised; • the notary ensures the agreement complies with legal requirements; and • the notary is responsible for submitting the docu - mentation to the cadastre. Additionally, while the above laws apply uniformly to all types of real estate (residential, commercial, indus - trial, etc), certain categories of real estate may be sub - ject to sector-specific laws, including: • the Law on State Property; • the Law on Agricultural Land; • the Law on Forests; and • the Law on Waters. 2.3 Effecting Lawful and Proper Transfer of Title The most common method to transfer real estate ownership is through a sale and purchase agreement, which must be in writing and notarised by a public notary. Transfers can also happen by operation of law, inheritance or decisions from competent state author - ities. The notary verifies the parties’ legal capacity, contract validity and compliance with legal formalities. Ownership is transferred only when registered in the real estate cadastre, maintained by the Real Estate Administration. This registration has a constitutive effect, meaning the buyer becomes the legal owner only after being recorded in the cadastre, regardless
of when the agreement was signed. Usually, the nota - ry submits the registration immediately after notarising the contract. The cadastre is publicly accessible and records all real estate details, ownership and related rights such as easements, mortgages, long-term leases, pre-emp - tion rights and prohibitions on disposal. It provides a centralised and reliable source of legal certainty for ownership and encumbrances. The Law on State Survey and Real Estate Cadastre enforces the principle of reliance, meaning that infor - mation in the cadastre is presumed accurate and trustworthy. This protects parties from negative con - sequences based on registered data. Because of this system, title insurance is generally not used or required in Montenegro. However, in high-value or international transactions, foreign investors often conduct thorough legal due diligence or obtain specialised legal opinions Buyers, often through their legal advisers, start by selecting properties that fit their investment criteria and gathering key information like legal status, zoning rules and cadastral data. The depth of due diligence depends on the investment size and the property’s intended use. instead of relying on title insurance. 2.4 Real Estate Due Diligence During due diligence, it’s crucial to identify risks and hidden liabilities such as encumbrances, unresolved ownership or legal disputes. Verifying ownership his - tory helps avoid future issues, especially with inher - itance or shared ownership. On-site inspections confirm cadastral boundaries, the property’s exact location and possession status, ensuring no unau - thorised occupants like tenants or informal users are present. Checking that all property taxes, utility bills and communal charges are paid is also important. If future renovations are planned, zoning and plan - ning regulations must be reviewed for any restric - tions. Assessing the surrounding area and infrastruc - ture helps ensure the property aligns with long-term investment goals. Evaluating utility and maintenance costs gives a realistic picture of ongoing expenses.
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