MONTENEGRO Law and Practice Contributed by: Milan Keker, Aleksandra Bujkovic, Ivan Pejovic and Iva Rolovic, Keker, Bujkovic & Pejovic
others can extend over a year, especially if there are legal challenges or disputes over the property. There are no COVID-19-related temporary measures currently in force that would restrict the enforcement of security interests or otherwise impede foreclosure proceedings. There is an active secondary market for non-performing loans (NPLs), with banks increasingly offloading distressed debt portfolios to specialised entities as part of broader balance sheet optimisation and risk management strategies. Foreclosure activity has resumed in full, with lenders regularly exercising their rights under secured lending arrangements. 3.7 Subordinating Existing Debt to Newly Created Debt The most common way for existing secured debt to become subordinated to newly created debt is through a contractual agreement between the involved parties. This typically takes the form of a subordina - tion or intercreditor agreement, in which the existing secured creditor expressly agrees to subordinate its security interest or claims to those of a new creditor. Such agreements are valid and enforceable under the Montenegrin Law on Obligations, provided they meet general legal requirements, such as clear intent and mutual consent. 3.8 Lenders’ Liability Under Environmental Laws A lender holding security over real estate is highly unlikely to be liable under environmental laws for pol - lution it did not cause, particularly where it does not possess, use, or exploit the mortgaged property (see 2.7 Soil Pollution or Environmental Contamination ). This position is reinforced by the legal provision stat - ing that a mortgagee has no right to possess the immovable property, collect its fruits, or otherwise use it, unless otherwise provided by law. Accordingly, as long as the mortgagee remains in a passive role – merely holding the mortgage as security – it would not typically be regarded as an operator or user of the property for environmental liability purposes. 3.9 Effects of a Borrower Becoming Insolvent Certain security interests granted by a borrower may become void if the borrower enters insolvency. Spe -
cifically, security acquired through enforcement or granted within 60 days before the initiation of insol - vency proceedings is invalidated, resulting in the loss of secured creditor status. Additionally, such interests may be subject to claw - back – a mechanism that allows insolvency adminis - trators to challenge transactions made prior to insol - vency that unfairly favour specific creditors or harm the general creditor pool. These include transactions involving inadequate consideration, dealings with related parties, or actions made with intent to defraud, with look-back periods ranging from six months to five years, depending on the circumstances. Upon the opening of insolvency proceedings, all enforcement actions are automatically stayed, and secured creditors must submit their claims through the court-supervised insolvency process, following the approved distribution plan. 3.10 Taxes on Loans There is no specific mortgage tax imposed on the cre - ation or registration of mortgage or mezzanine loans. However, standard administrative and notarial fees do apply. Mortgages must be executed as notarial deeds, with fees based on the secured loan amount, following the official Notarial Tariff. For the mortgage to be enforceable against third parties, it must also be registered in the real estate cadastre, which incurs a modest administrative charge. These costs are proce - dural rather than fiscal in nature and may be allocated between the borrower and lender by agreement.
4. Planning and Zoning 4.1 Planning and Zoning Framework
Land use, spatial development, design and construc - tion in Montenegro are primarily governed by spatial planning and construction legislation. The key legisla - tion includes the Law on Spatial Planning and Con - struction of Structures (2017, as amended), the Law on Construction of Structures (2025) and the Law on the Legalisation of Illegal Structures (2025, as amend - ed in 2026).
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