In 2017, the Parliament of Montenegro adopted a new Law on Spatial Planning and Construction of Facilities (the “Law”), introducing major innovations in the field of spatial planning and construction. The Law entered into force on October 8, 2017.
Among other things, the Law was designed to implement EU standards and harmonize Montenegrin laws with EU law through increased transparency and accountability of spatial planning and development processes. Additionally, the Law employs a number of environmental, societal, and spatial planning principles, including integral approach principles in the planning process, a focus on spatial development sustainability and increased quality of spatial and urban planning and construction, an emphasis on horizontal and vertical integration, and striking a balance between protecting the public interest and protecting individual interests.
Given that the new legislation introduces important changes, it is expected that the overall process of obtaining necessary approvals for construction and use of constructed facilities will be significantly easier and faster for investors, resulting in a more favorable environment for investments in Montenegro.
The main innovations in the Law are:
Centralization of the Construction System and Decision-Making. The new Law shifts spatial planning and construction powers from local authorities to the Ministry of Sustainable Development and Tourism (the “Ministry”).
New instances are introduced in the form of the chief state architect and chief local architect. The chief state architect approves urban projects and protects the authenticity of space and identity of settlements, while the chief local architect approves conceptual solutions for buildings, squares, and other public areas within settlements and the facades of temporary facilities, and attests the compliance of the conceptual solutions with urban projects.
The Ministry is given the authority to maintain a Central Register of Construction, where each facility under construction will be registered jointly with technical documentation.
Decrease in the Number of Planning Documents. While previous legislation distinguished between eight different planning documents, the new Law envisages only two: (i) the spatial plan of Montenegro (a strategic document determining state goals and measures for spatial development (including guidelines), to be enacted for a 20-year period), and (ii) the plan of general regulation (to be enacted for a 10-year period). Both documents will be enacted by the Parliament of Montenegro.
The plan of general regulation is to be enacted within 36 months of the date of entry into force of the Law, which will annul all state and local planning documents except the Spatial Plan of Montenegro.
Abolishment of Construction and Operational Permit for Simple Projects. The Law abolished the obligation to formally obtain (i) a construction permit prior to the commencement of construction, and (ii) an operational permit before using the facility, except for energy and heavy industry facilities (i.e., complex engineering facilities). This is a significant departure from the previous law.
Save for exceptional cases, construction may now start once notification on commencement of work has been submitted to the relevant authority together with relevant technical documents.
This will result in a considerably shorter and simpler initial phase of construction.
Specific Terms of Legalization. The Law regulates the issue of the legalization of illegal buildings, which was previously regulated by the Law on the Regularization of Informal Facilities. To ensure the integrity and continuity of the system, especially in light of the significant new solutions proposed by this regulation, the need to regulate the matter of legalization was clear.
The key change envisaged by the Law in the field of illegal construction refers to the basic premise of legalization. Namely, the new solution “allows” legalization only and only if the illegal building is envisaged by the planning document.
Completion of Urban Parcel. The most common problem in Montenegro has been the development of urban parcels consisting of cadastral parcels owned by different owners.
In order to develop such a site, each owner of the cadastral parcels composing the urban parcel had to provide his or her consent, making it hard to achieve mutual agreement. This created major obstacles for investors.
The new Law makes it possible for the owner of the largest cadastral parcel to buy out the land required to complete the urban parcel from the other owners. If that owner does not use this right, other owners will be allowed to do so. The price of the buyout – i.e., the certified value – will be determined by the cadastre.
If no agreement on completion of the urban parcel is reached, either the provisions of the Law on Expropriation will apply or the land could be brought to its use based on the provisions of the Law.
By Dijana Grujic, Senior Attorney at Law, Ana Vukcevic, Associate, Moravcevic Vojnovic and Partners in cooperation with Schoenherr
This Article was originally published in Issue 5.6 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
