Contributed by Law Office Lazarov.
1 Real Estate Ownership
1.1 Legal Framework
One of the fundamental values of the constitutional order of the Republic of North Macedonia guaranteed by the Constitution of the Republic of North Macedonia is the legal protection of property. As Lex specialis law for regulating the right of ownership over real estate (RE) is the Law on Ownership and Other Real Estate Rights (Official Gazette of the Republic of Macedonia, No.18/2001 and its subsequent amendments). Additional legal framework for regulating the right of ownership over real estate is in the following laws: Law on Construction Land (Official Gazette of the Republic of Macedonia, No.15/2015 and its subsequent amendments); Law on International Private Law (Official Gazette of the Republic of Macedonia, No.87/2007 and its subsequent amendments); Law on Real Estate Cadastre (Official Gazette of the Republic of Macedonia, No.55/2013); Law on the sale of state-owned agricultural land (Official Gazette of the Republic of Macedonia, No.87/2013 and its subsequent amendments); Expropriation law (Official Gazette of the Republic of Macedonia, No.95/2012 and its subsequent amendments); and Law on Obligations (Official Gazette of the Republic of Macedonia, No.18/2001 and its subsequent amendments).
In the Republic of North Macedonia, the right of ownership over RE can be acquired by all domestic and foreign natural and legal persons, including the state and local self-government units, under the conditions and in the manner provided in the Law on ownership and other real rights. When the RE is the subject of the right of ownership of several persons, this right arises as:
(i) Co-ownership (Co-ownership shall mean ownership by multiple persons who have the right to ownership of an undivided item for which the part of each of them is determined proportionally in accordance to the whole (ideal, co-ownership part)), (ii) Joint ownership (Joint ownership is the ownership by several persons of an undivided thing when their parts are determinable but not predetermined.) and (iii) Floor ownership (Apartments, business facilities, cellars, garages and other separate parts of housing and business building which have two or more apartments, or business facilities and other separate parts can be owned by different natural persons and legal entities).
The right to servitude, the right to pledge, the right to a real burden, and other real rights are limited real rights and may be based on RE to which there is a right of ownership.
Foreign natural persons and legal entities, residents of the member states of the European Union and OECD may acquire the right of ownership of an apartment and premises in the territory of the Republic of North Macedonia in the same manner as the citizens of the Republic of North Macedonia.
Foreign natural persons and legal entities, residents of the non-member states of the European Union and OECD may acquire the right of ownership of an apartment and premises in the territory of the Republic of North Macedonia in the same manner as the citizens of the Republic of North Macedonia, under the same conditions of reciprocity.
For land ownership, the law stipulates that foreign natural persons and legal entities, residents of the member states of the European Union and OECD may acquire the right of ownership and the right to a long-term lease of construction land in the territory of the Republic of North Macedonia in the same manner as domestic legal entities and natural persons, citizens of the Republic of North Macedonia.
Foreign natural persons and legal entities, residents of non-member states of the European Union and OECD may acquire the right of ownership and the right to a long-term lease of construction land in the territory of the Republic of North Macedonia under the conditions of reciprocity.
According to the law, foreign natural persons and legal entities cannot acquire the right of ownership of agricultural land in the territory of the Republic of North Macedonia. However, foreign natural persons and legal entities may, under the conditions of reciprocity, acquire the right to a long-term lease of agricultural land in the territory of the Republic of North Macedonia, based on the consent of the minister of justice, upon previously acquired opinion of the minister of agriculture, forestry, and water resource management, and the minister of finance.
The rules for the expropriation of ownership are provided in the Expropriation law, which determines the confiscation and limitation of the right of ownership and the property rights of real estate for the purpose of realization of public interest in the construction of facilities and the performance of works of importance for the Republic of Macedonia and the construction of facilities and the performance of works of local importance.
The RE market trends in North Macedonia are the construction of residential complexes, business premises, and malls, for the purpose of sale and leasing.
1.2 Registration of Ownership
In the public book kept by the Agency of Real Estate Cadaster of the Republic of North Macedonia are registered the right of ownership of the RE and other real rights of the real estate, the real estate data, owners’ data, owner’s other rights as well as of other relevant rights and facts whose registration is determined by law.
1.3 Publicity of Real Estate Register
The part of entries in the registry related to the property itself and the owner of the RE property are publicly available on the website of the Real Estate Cadaster Agency. For more detailed information regarding the RE, it is necessary to get a property list, which can be issued by a cadaster or a notary. This service is chargeable and such a list can be obtained by any third party. Information from the website is of informative character on ownership rights because the only valid proof of real estate ownership and other real rights is a property list issued by a cadastre or a competent notary.
The registry of RE has a registry in the Central Registry of North Macedonia, where this registry issues information of informative character on ownership rights, data on land parcels and objects on such parcels, as well as information on liens. However, in accordance with the Law on Personal Data Protection, property lists will not contain the owner’s unique personal identification number (UPIN) when issued to a third person.
1.4 Protection of Ownership
Property entries are binding. No person may be deprived or restricted of ownership and the rights deriving from it, except in the cases of public interest determined by law, and the owner has the right of judicial protection. The normative regulation of property lawsuits in the legal system of the Republic of North Macedonia is contained in several laws. Lawsuits for the protection of property according to the Law on Ownership and Other Real Rights are the following: ownership lawsuit for return the possession of the RE (rei vindication), a lawsuit by a presumed owner (actio publiciana), a lawsuit against disturbance of ownership (actio negatoria), a lawsuit for protection of co-ownership, i.e., joint ownership, a declaratory lawsuit, and an extraction lawsuit. Lawsuits for protection of the RE right are lawsuits for change, i.e., for the deletion of entries in the Cadaster.
2 Real Estate Acquisition
2.1 Share Deal or Asset Deal?
RE can be acquired either directly as an asset deal between the seller and buyer or by acquiring the shares of the legal entity that is the owner of the RE. The main difference between a share deal and an asset deal is that, within asset deal, there is an obligation to pay a property transfer tax.
2.2 Share Deal
The manner of acquisition of RE depends on the evaluation of the risks by the acquirer of the RE having in mind that the acquisition of the shares means the acquisition of the owner company with all its liabilities toward any third party. The costs for the acquisition of the RE with an asset deal are slightly higher compared to a share deal. Also, the acquisition of the RE as an asset deal will be subject to property transfer tax (from 2% to 4% of the value of the RE) and such tax is not applicable to a share deal. Usually, the procedure of acquisition of RE is subject to a prior due diligence process which should address all relevant risks and determine the appropriate way for acquisition of the RE.
2.3 Asset Deal
An asset deal is the purchase of a target’s underlying assets. The transaction involves transferring the ownership of assets from the seller to the purchaser. The purchaser only acquires the assets along with any liens. The ability to choose specific assets provides the purchaser with flexibility. The purchaser does not spend money on unwanted assets and there is less risk of the purchaser assuming unknown or undisclosed liabilities. However, this also makes asset acquisitions more complex because the purchaser has to spend time identifying the assets and liabilities it wishes to acquire and assume.
2.4 Disposal Process
A purchase agreement obliges the seller to hand over the item it sells to the purchaser so that the purchaser acquires ownership, and the purchaser undertakes to pay the seller the agreed price. A purchase agreement of real estate must be concluded in writing form. The signatures of the contracting parties in the contract for sale and purchase of real estate are notarized or the contract is solemnized by the notary public. The costs for notarization and solemnization depend on the value of the RE and the notary determines them in accordance with the appropriate notary tariff. There are no special approvals for the transfer of ownership, except in the case the RE is land that the seller acquired from the state in which case the seller needs to obtain prior approval from the State Attorney and to transfer all its obligations from the agreement with the state to the purchaser.
2.5 Registration of Change of Ownership
When the parties conclude a purchase agreement, they are obligated to submit it to the relevant municipality for clearance of the property transfer tax. Once the property transfer tax is paid. The purchase agreement is notarized by a notary public and the notary submits the application for registration of the change in the real estate cadaster after which the purchased will be registered as the owner of the RE and the transaction will be considered as closed. When the value of the real estate is greater than EUR 10,000, the purchase agreement must be drawn up by a lawyer and contain a seal and signature by a lawyer.
2.6 Risks To Be Considered
In the case of the sale of a co-ownership part, the other co-owners shall have the pre-emptive right to purchase. The co-owner who intends to sell their co-ownership part shall be obliged, by means of a written proposal through a notary, to offer for sale its part to the other co-owners and to announce the price and the terms of sale. If the co-owners of the RE who are offered the co-ownership part do not declare that they accept the offer within 30 days of the announcement in the written proposal, the co-owner may sell their co-ownership part to another person. If several co-owners want to buy the ideal part of the thing under the same conditions, then it shall be given to the owner determined by the seller. In the case the co-owner who sells their co-ownership part does not submit an offer to all the co-owners, the co-owners who have not been given the offer may request the sale to be annulled in a court procedure. In the case the RE is agricultural land, the neighbors of the land also have a pre-emptive right to purchase the land. Also, any sale and purchase agreement of RE that the seller acquired in marriage should be subject to consent from the seller’s spouse.
3 Real Estate Financing
3.1 Key Sources of Financing
3.1.1 Debt Financing
3.1.1.1 Bank Loans: This is the most common method for financing real estate purchases. Banks and financial institutions provide loans to natural persons and legal entities. The terms, interest rates, and eligibility criteria vary based on the lender and the borrower’s financial situation. When approving the loan, banks do a detailed credit analysis of the client, where it should be emphasized that the most important factor for approving a loan is the client’s credit ability to repay the loan through the income earned from his regular work (regular income). Banks provide loans based on a loan approval agreement concluded between the bank and the borrower. With that agreement, the bank and the borrower arrange the conditions under which the borrower will return the loan, the duration of the loan, the interest rate that will be calculated to the borrower, the security that the borrower will give to the bank for the given credit, as well as other rights and obligations arising for the contracting parties. The interest rate for loans is determined by the bank and it can be a fixed interest rate or a variable interest rate, the interest rate for housing loans should be within the limits determined by the National Bank of the Republic of North Macedonia.
There are different conditions from the bank for the natural persons and the legal entities and every bank has its own conditions, there is no legal obligation for all the banks to have the same loan conditions, but they must be within the framework of fair competition and the conditions that are provided by the law.
Bank loans for legal entities are loans that in the Republic of North Macedonia are also known as investment loans, namely, unlike loans for natural persons where there are specific housing loans, for legal entities these loans belong to the category of investment loans because they are considered an investment of the legal entity, regardless of whether it builds, upgrades, buys or sells real estate.
3.1.1.2 Private Financing: Investors or private lenders may offer financing options for real estate purchases, especially for commercial properties or large developments. Terms and conditions for private financing can vary widely and may involve higher interest rates or different repayment terms.
3.1.2 Financing Through Own Funds
Many individuals use their personal savings or investments to finance real estate purchases. This could include savings accounts, fixed deposits, stocks, or other liquid assets that can be used as a down payment or to cover the entire purchase price.
The financing real estate methods are regulated by different laws in North Macedonia:
- Law on Obligations
- Banking Law
- Bylaws from the Banking Law
- Law of Agreed Pledge
3.2 Protection of Creditors
Real estate financing is always a secure claim of financiers. Securing claims is regulated in the legislation of the Republic of North Macedonia. The main types of security used in RE financing are the following:
3.2.1 Mortgage: One of the primary protections for creditors is the ability to register a mortgage on the real estate property being financed or other property of the creditor-beneficiary. The Law of Agreed Pledges governs the creation and registration of mortgages, which serve as a security interest in the property. In case the borrower defaults on the loan, the creditor (mortgagee) can initiate an enforcement procedure to recover the outstanding debt by selling the property.
The right to a mortgage is acquired by concluding the mortgage agreement and by recording the mortgage in a public book in the manner and under the conditions prescribed by law. By public book, is meant the book in which the right of ownership over real estate and other real rights over that real estate is recorded, as well as the book in which the right of ownership and other real rights over things are recorded equated with real estate.
The mortgage is regulated by the Law of Agreed Pledges.
3.2.2 Pledge of Movable Assets: As a security for financing real estates in North Macedonia is also acceptable to establish a pledge of movable assets’ property of a creditor. This way of securing is usually acceptable for the bank if the creditor is a legal entity. The pledge of movable assets should be registered in the Pledge Register at the Central Register of the Republic of North Macedonia.
The pledge creditor and the pledge debtor of the pledge agreement can give it the status of an enforceable document before or after the registration of the pledge in the Pledge Register.
A pledge agreement has the status of an enforceable document if it is certified or drawn up by a notary and if it contains a statement from the contracting parties that they agree that their pledge agreement has the status of an enforceable document. The pledge of movable property is regulated by the Law of Agreed Pledges.
3.2.3 Bill of Exchange: A bill of exchange is a negotiable instrument that functions as a written order by one party (the drawer) to another (the drawee) to pay a specified amount to a third party (the payee). In the context of real estate transactions, it can be used as an additional form of security for the lender (usually a bank) providing a mortgage loan. When a borrower (mortgagor) pledges real estate as collateral to obtain a mortgage loan, the lender may also require additional security to mitigate risks. A bill of exchange can serve this purpose by providing a secondary means of repayment if the borrower defaults on the mortgage. In the event of default by the borrower, the lender can enforce the bill of exchange to recover the outstanding debt. This may involve presenting the bill of exchange to the drawee (often the borrower or a guarantor) for payment according to its terms. The bill of exchange is regulated by the law of bill of exchange.
3.2.4 Bank Guarantee: A bank guarantee is a commitment issued by a bank on behalf of a customer (the applicant) to a beneficiary (the recipient of the guarantee) that payment or performance obligations will be met if the applicant fails to fulfill them. It assures the beneficiary that they will receive compensation up to a specified amount under the terms of the guarantee. In North Macedonia, bank guarantees can be used in real estate transactions as a form of security or assurance. For example, where a buyer may provide a bank guarantee to the seller as security for a down payment.
To obtain a bank guarantee, the applicant (often with the assistance of legal or financial advisors) submits a request to their bank, which assesses their creditworthiness and issues the guarantee if approved. The bank charges a fee or commission for issuing the guarantee, typically based on the guarantee amount and risk assessment.
If the applicant fails to fulfill their obligations under the guarantee, the beneficiary can present the guarantee to the bank for payment. The bank then pays the beneficiary up to the guaranteed amount and may seek reimbursement from the applicant.
Bank guarantees are regulated by the Law on Obligations and the Banking Law.
3.2.5 Guarantee: In North Macedonia, an agreement for guarantee can also be concluded as a security of financing real estate. With an agreement for guarantee, the guarantor commits to the creditor that he will fulfill the valid and due obligation of the debtor if the debtor does not do so. The guaranteed agreement binds the guarantor only if they made a guaranteed statement in writing. Only a person who has full business capacity can be bound by a contract of guarantee.
A guarantee can be given for any valid obligation, regardless of its content. It can be guaranteed for a contingent obligation as well as for a certain future obligation. A guarantee for a future obligation can be revoked before the obligation arises if the term in which it should arise is not foreseen.
The obligation of the guarantor cannot be greater than the obligation of the main debtor, and if it is agreed to be greater, it is reduced to the extent of the debtor’s obligation. The guarantor is responsible for the fulfillment of the entire obligation for which they have guaranteed if their liability is not limited to any part of it or is otherwise subject to lighter conditions.
The guarantor is obliged to compensate the necessary costs incurred by the creditor in order to collect the debt from the principal debtor. The guarantor is also responsible for any increase in the obligation that would occur due to the debtor’s delay or due to the debtor’s fault unless otherwise agreed. The guarantor is only liable for the agreed interest that has accrued after the conclusion of the guarantee agreement.
The guarantee is regulated by the Law on Obligations.
4 Real Estate Taxes
4.1 Transfer Taxes
4.1.1 Real Estate Transfer Tax: Real estate turnover tax is paid on real estate sales. The sale of real estate includes the transfer with or without compensation of the right to ownership, as well as another way of acquiring real estate with or without compensation between legal entities and individuals.
The person liable for the real estate sales tax is a legal and natural person – the seller of the real estate. As an exception according to the Law on Property Taxes, the oblige of the real estate turnover tax can be a legal entity and a natural person – the buyer of the real estate, if in the contract for the purchase and sale of the real estate, it is agreed that the tax will be paid by the buyer.
The basis of the real estate sales tax is the market value of the real estate at the time of the liability. Real estate sales tax rates are proportional and range from 2% to 4%.
The amount of real estate sales tax rates is determined by the decision of the council of the municipality where the real estate is located. The amount of real estate sales tax rates is determined by the decision of the council of municipalities in the city of Skopje and the Council of the city of Skopje in accordance with the Law on the City of Skopje, for real estate located in the territory of the City of Skopje.
The tax liability of the real estate turnover tax occurs on the day of the conclusion of the contract for the transfer of the right of ownership of the real estate, that is, of the replacement of the real estate.
Real estate turnover tax is not paid:
1) on the sale of real estate in the expropriation procedure;
2) when a foreign diplomatic or consular representation transfers the right of ownership of real estate, under the condition of reciprocity;
3) when the right of ownership is transferred for the purpose of settling obligations based on public revenues in the procedure for forced collection;
4) on the sale of real estate between state authorities, between state authorities and municipalities, and between municipalities;
5) the sale of real estate in the confiscation procedure;
6) on the sale of socially owned apartments, if the purchase agreement does not specify who is responsible for paying the tax;
7) when the right of ownership of real estate is transferred to state authorities for the purpose of collection of claims in bankruptcy and executive proceedings;
8) when the right of ownership of real estate is transferred to the provider of life support who, in relation to the recipient of the support, is in the first line of succession, and only for the part of the real estate that he would inherit according to the Law on Inheritance and without giving the support;
9) on the first turnover of residential buildings and apartments that will be carried out within a period of up to five years after construction, on which value-added tax has been calculated;
10) when investing real estate in the capital of trading companies;
11) of securities trading, in terms of the Law on Securities and
12) when the right of ownership of real estate is transferred to the banks as creditors, for the purpose of collecting a monetary claim, if they sell the acquired property within three years.
4.1.2 Value-Added Tax: The subject of taxation with value-added tax is the turnover of goods and services, which is carried out with compensation in the country by the taxpayer within the framework of his economic activity. Turnover of goods in the sense of the Law on Added Value represents the transfer of the right to dispose of movable or immovable property. The tax rate for measuring real estate according to the Law on Added Value in the Republic of North Macedonia is 18% for taxable turnover. VAT only applies to new residential properties or commercial properties sold by VAT-registered entities for the first sale of the property.
4.2 Specific Real Estate Taxes
Property tax: Property tax should be paid for immovable property, except for that property which is exempt from payment of tax according to the Law on Tax of Property. A property tax obligor is a legal entity and natural person who owns the property. If the property is owned by several persons, each of them is liable for the property tax in proportion to the ownership share.
The basis of the property tax is the market value of real estate. The determination of the market value of immovable property is performed by an appraiser who is employed in the local self-government unit, and at the request of the local self-government unit, it can also be performed by a person who is an authorized appraiser. The market value is determined according to the Methodology for assessing the market value of real estate.
The property tax rates for real estate are proportional and amount from 0.10% to 0.20% of the market property value. Property tax rates can be determined according to the type of property.
The tax liability for the property tax arises from the date of acquisition of the property, the issuance of approval for the use of the real estate by a competent authority, or from the day of commencement of the use of the property by the taxpayer.
The property taxpayer for a single or multi-apartment housing facility and yard (land) in which he lives has the right to a reduction of the calculated tax in the amount of 50%.
Property tax is not payable on:
1) state-owned immovable property used by state authorities, municipally owned immovable property used by municipal authorities, municipal authorities in the city of Skopje, and the authorities of the city of Skopje, except for immovable property used by physical or legal entities persons;
2) real estate of foreign diplomatic and consular missions and of missions of international organizations, if they are owned by them, under the condition of reciprocity;
3) immovable property owned by the National Bank of the Republic of North Macedonia;
4) religious facilities in which worship, prayer, and other manifestations of faith are performed, such as a temple, mosque, prayer house, synagogue, cemetery, and other premises of a church, religious community, and religious group;
5) individual buildings that have been declared cultural heritage by a protection act;
6) facilities for the protection of land, water, and air;
7) the facilities of enterprises for work training, professional rehabilitation, and employment of the disabled;
8) land used for surface and underground mining and geological research;
9) facilities intended for the primary processing of agricultural products, namely:
- facilities intended for breeding livestock and fish,
- facilities for housing equipment for monitoring the quality and safety of the primary livestock and agricultural products of an agricultural economy,
- facilities for accommodation and maintenance of agricultural machinery, auxiliary equipment, and other means of transport and equipment of an agricultural economy,
- facilities for storage, reception, storage, and packaging of primary agricultural and livestock products and feed for animals on an agricultural farm,
- facilities, collection centers for milk, mushrooms, and medicinal plants,
- water reservoirs related to activities in agricultural production of an agricultural economy and
- facilities for the treatment of waste from activities in agricultural production of an agricultural economy.
10) agricultural land used for agricultural production.
5 Condominiums
5.1 Legal Framework for Condominiums
The legal framework that regulates condominiums in our jurisdiction consists of the Law on ownership and other property rights and the Law on housing.
The Law on ownership and other property rights defines the condominium as the right of ownership over the separate parts of buildings.
Apartments, business premises, cellars, garages, and other special parts of residential and office buildings that have two or more apartments, i.e., business premises and other separate parts may be owned by different natural or legal persons (condominium).
There can be co-ownership over ideal parts of separate apartments and other separate parts of a building.
The parts of an apartment building that are in the function of the building as a whole or some of its parts are used as joint and indivisible ownership of all the owners of the separate parts or the owners and of the parts that are in their function.
The Law on housing, on the other hand, regulates the types of housing facilities, management of the residential buildings, the relations between the owners of the separate parts and third parties, and the community of owners.
It also contains provisions that regulate housing in collective housing facilities (multi-apartment buildings) defined as residential buildings with two or more apartments such as apartment blocks, multi-story buildings, and solitaire.
Each collective housing facility can establish either a community of owners, registered in the Central Registry of NMK or appoint a Facility Manager with the purpose of residential building management of the common parts of the facility, common structural building elements, and common installations.
Common parts of the facility are the stairs, entrance windshields, corridors, bicycle rooms, washers, dryers, common basements, shelters, attics, janitor’s workshops, janitor’s apartment, rooms for waste disposal, and other premises intended for the common use of the owners of the separate parts, the land on which the building lays and which serves for its use, in accordance with the regulations for urban planning.
Common building elements in residential buildings are foundations, load-bearing walls and structures, ceilings, the roof, facade, chimneys, ventilation pipes, light windows, elevator openings, and other similar structures.
Common installations, devices, and equipment in residential buildings and apartment facilities for special purposes are the connection and internal electrical, electronic-communication network and assets, water supply, gas supply, and hot water supply installation intended for residential connections, and are located in the common one’s rooms, elevators, supply, drainage, heating devices, telecommunications devices and cables, other associated antennas, lightning rods, firefighting devices, fire detection, and alarm devices, security lighting and all other utility and similar connections intended for the common use of the owners of the separate parts in the residential building.
5.2 Rights and Duties of Co-Owners
According to the Law on ownership and other property rights:
The owner of a separate part of a building has the right to use his part of the building according to their will and to dispose of it freely, as well as with the subsidiary parts of the building that serve his part of the building (cellar, garage, etc.).
The owners of the separate parts shall be entitled to use the common parts of a multi-apartment building which are part of the building as a whole (foundations, main walls, facade, stairs, halls, apartment for the concierge, elevators, electrical, sewage, plumbing and television networks, television antennas, wells, facilities for laundering and drying of clothes, roof, cellar, heating devices, skylights, chimneys, etc.).
The owners of the separate parts shall be entitled to use the common parts serving for the purpose of only some separate parts of the building (separate entrance, partition walls between two apartments or rooms, etc.).
If the separate part of the building is owned by two or more persons (ideal parts), the co-owner who wants to sell their part is obliged to offer it to the other co-owner, i.e., the other co-owners.
The owner is obliged to take care of the maintenance of his part of the building. If the owner caused damage while using his part of the building on other parts of the building that are owned by other persons or with it create other obstacles to the parts of the building that are in its function such as whole or of its parts that represent a separate whole, they are obliged to compensate for that damage, that is, remove other obstacles that are created.
The owner cannot make modifications on their part that could disrupt the architectural image of the building or reduce its reliability (stability), that is, the stability of some common part of the building or another owner, as well as cause damage to those parts.
The owner of a separate part is obliged to allow necessary interventions on their building part due to the removal of obstacles that disrupt the use of the right of ownership of another part of the building or parts of the building that are in function of the building as a whole.
When disposing of a garage that is part of the building or the building land that serves the building as a whole or only for some parts of the building, in the event that the alienation is carried out separately from the alienation of the apartment, the owners of the apartments primarily have the right to purchase separate parts of the building, and after them the tenants of the apartments in the same building.
In the case of paragraph 1 of this section, a garage sale cannot be carried out to a person who does not use an apartment in that building under conditions more favorable than those that are offered to apartment owners as separate parts of the building, that is, to the tenants of the apartments in that building.
The seller is obliged to submit the offer for sale through the house advice if there is advice, that is, to present it to the public inspection of the owners of the apartments.
The statement of acceptance of the offer is submitted directly to the seller.
According to the Law on housing:
The owner of a separate lot is obliged to regularly maintain the apartment and take care of the maintenance of their property in order not to cause damage or harmful effects, as well as to ensure uninterrupted use of premises by other owners.
The maintenance of residential buildings and apartments should ensure constant correctness, safety, and usability of all parts of the building as a whole, the aesthetically designed appearance, devices, installations, and equipment of the building, which serve all the owners of the separate parts, that is tenants of the building.
The maintenance of residential buildings and apartments includes the works of regular maintenance.
To carry out the measures and activities for regular maintenance of the residential building, the owners of the separate parts of the meeting of owners adopt a maintenance plan for a period of at least one year, and at most five years.
5.3 Liability of Co-Owners
Owners of separate units are responsible for paying all management costs and other costs arising from residential building management in accordance with the square footage of their units if the mutual relations agreement has not been determined otherwise.
All the owners of the separate parts are responsible for the costs incurred by undertaking activities based on decisions made in the manner prescribed by this law, regardless of whether they voted against the proposed decisions.
5.4 Rights and Duties of Condominium Associations
According to the Law on housing:
The owners of the separate lots can adopt a decision to establish a Community of Owners as a legal entity for the management of the residential building or to appoint a Facility Manager for the common parts of the facility. The decision can be made only with the consent of the majority of the owners of the separate parts.
With the decision to form a Community of Owners, the owners of the separate parts are obliged to adopt a statute of the Community of Owners.
For the purposes of collective housing management, the owners of the separate parts of the residential building enter into an agreement for mutual relations which defines:
1) methods, conditions, and order of using the common premises and devices of the building;
2) the amount and the method of payment of the costs for the regular maintenance (investment and ongoing maintenance) of the common parts of the building that is owned by condominiums;
3) house order of the building;
4) way of establishing the reserve fund;
5) purpose of secondary premises used by the owners of the separate lots;
6) usage of the secondary premises for special purposes;
7) special restrictions on the right to use the secondary premises;
8) participation of the owners of the separate lots as parties in the legal transactions;
9) special powers of the manager of a residential building;
10) method of insurance of common parts of residential buildings and distribution of amounts for payment of insurance premiums;
11) way of notifying the owners of the special parts for the operation of management;
12) special services that exceed the limits of functioning of residential building (such as protection, reception service, etc.) and
13) way of regulating relations in case of adaptation, reconstruction, conversion, extension, and upgrading of a part of the building or the building in its entirety;
Owners of separate lots are responsible for payment of all management costs and other costs arising from a residential building in accordance with its proprietary parts if with the mutual relations agreement, has not been determined otherwise.
Residential building management is defined as monitoring and enforcement of the decisions made by the community of the owners of the separate parts in the building, representation in legal transactions and proceedings before the authorities for the purpose of functioning, maintenance, and preservation of the common parts of the residential building.
If there are more than two separate owners in residential building sections and more than eight separate sections, the owners of the separate sections can make a decision to establish a Community of Owners as a legal entity.
The Community of Owners has the right to conclude contracts for works on the management of the residential building and cannot perform any other activity.
The Community of Owners is a non-profit organization.
The financial operation of the Community of Owners is carried out in accordance with the Law on accounting of non-profit organizations.
If there are more than two separate owners in residential building sections and more than eight separate sections, the owners of the separate sections can determine that the residential building will be managed by a manager.
The relations between the owners and the manager are governed by a contract for performing management services for a period not longer than two years.
Rights and obligations of the manager:
1) executes the adopted decisions by the owners of the separate lots;
2) regular maintenance and functioning of the common parts;
3) represents the owners of the separate parts in management matters and on behalf of individual owners submits a lawsuit for relief from the obligation for payment, that is, a suit for debt for payment of costs and the expenses of the owner of the separate part;
4) represents the owners of the separate parts before the administrative authorities in the works of issuing permits and consents and in the registration procedures of real estate and other administrative procedures, in connection with the residential building and the land, as well as for other matters related to management;
5) prepares a plan for maintaining the residential building, a plan with dynamics for implementing this plan and taking care of the implementation of the plan;
6) prepares a calculation of the costs of managing the residential building and distributes the costs among the owners of the separate parts;
(7) receives the payments of the owners of separate parts on the basis of
monthly calculation and pays the obligations from the contracts concluded with third parties;
8) informs the owners of the special parts about their work and submits monthly and annual calculations;
9) prepares an annual report on facility management;
10) manages the reserve fund in accordance with the provisions of this law;
11) enumerates and numbers the apartments and reports the registration of the data in the authority that keeps the public books of real estate; and
12) should know the standards and norms for accessibility of persons with
handicap in the residential building.
The manager is obliged to regularly take care repairs on a smaller scale (replacement of light bulbs, plugs, small painting works, replacement of spare parts, and the like) of the common parts of the residential building. The cost of these repairs shall be borne by the owners of the separate parts in proportion to the size of their separate parts.
6 Commercial Leases
6.1 Form and Contents of a Lease Agreement
A lease is a legally binding contract between a landlord and a tenant that covers the duties and obligations of all parties to the lease. It is a formal written agreement that can be concluded either by domestic or/and foreign natural and legal persons. Essential terms cover the validity period, specification of the subject of the agreement, consent of relevant institution for example bank in case there is an established pledge, and the price of the lease with other applicable fees included. Other important terms include but are not limited to the security deposit, extension of the agreement, termination of the agreement, disclaimers, applicable law and competent court as standard final provisions. The agreement should be notary-certified. In the recent few years, the notary who made the certification of the signatures of the parties, as well submits an application for evidence of such contract in the public books maintained by the Agency of the Real Estate Cadaster and this information it is shown in the Property Deed as public data. Before that, the parties were submitting the application by themselves. If the contracting parties wish to secure the fulfillment of the mutual obligations such as the regular payment of the lease amounts there is the possibility for implementation of an enforcement clause for force execution of the due owned amounts under the agreement. This clause requires a specific form of certification that is confirmation of a private document as public (solemnization) by the notary public. The enforcement clause is highly effective and preferable form by the parties.
6.2 Regulation of Leases
No there is no difference in the rules for the leases for diverse types of property. The essential clauses mentioned above cannot be excluded.
6.3 Registration of Leases
Yes, the commercial lease must be evidenced in the public books maintained by the Real Agency of Cadaster.
6.4 Termination of Leases and Renewals
The Lease can be terminated due to a breach of the material clauses by either party. The landlord is entitled to terminate the agreement due to a breach of the obligation for payment of the rent by the tenant, repeated wrong utilization of the real estate contrary to its purpose despite the given warning, and if the tenant has concluded an agreement for the sublease of the real estate without the agreed previous consent of the landlord as most common grounds. The tenant may terminate the agreement in the event the necessary repairs of the real estate hinder its use to a significant extent and for a longer period. As with any other contract, the lease agreement may be terminated without cause and the terms of such termination (notice period, penalties, etc.) are defined within the agreement.
The above reasons represent the most common grounds for termination of the agreement and are prescribed by the Law on obligational relations. Termination clauses are not mandatory and in case of their absence, the provisions of the Law on obligational relations shall be applicable.
Automatic lease renewals are applicable, it may be agreed with certain specifics in the agreement or if not agreed, the provisions of the Law on obligational relations shall apply. The Law on obligational relations prescribes that if the tenant continues to use the real estate after the expiry of the period and the landlord does not object it is considered that a new lease agreement is concluded on indefinite duration under the same conditions as the previous lease. The automatic renewal of the lease is not followed with automatic renewal of the evidence of the lease in the public books maintained by the Agency of the Real Estate Cadaster, the old agreement shall be evidenced until the application for new agreement is submitted.
6.5 Rent Regulations and Rent Reviews
Rent regulation is not established in the Republic of North Macedonia, the lease prices are freely established on the market.
6.6 Services To Be Provided Together With the Lease
No services within the lease are prescribed in the Law on obligational relations, however, the parties are free to agree on whether some services shall be provided during the rent.
6.7 Fit-Out Works and Their Regulation
The tenant is obliged at its own expense to make reparations that come with normal utilization of the real estate. Investments in real estate, if not previously agreed between the parties, do not have any specific treatment by the law, and in such a case the tenant is not entitled to any compensation with the exception to the investments necessary and urgent to prevent damage of the real estate or to prevent loss of some expected benefit. The necessary investments have legal treatment as works without a warrant and in such a situation the tenant is obliged immediately to notify the landlord about the commenced works and if possible, the landlord to undertake and complete such works. After completing the works, the tenant should notify the landlord about the completed works and hand over the completed works. In such situations, the work undertaken by the tenant should be appropriate to the situation and they are entitled to compensation for all necessary and useful expenses and compensation for damages if any. Investments do not have any specific tax regime because it can be agreed investments that are usually adaptation and modification of the space such as interior design or unpredicted necessary and urgent repairs.
6.8 Transfer of Leases and Leased Assets
In the case of transfer of ownership of the real estate that was previously leased, the new owner takes the place of the former landlord and acquires the same rights and obligations under the agreement. The new landlord does not have a right to terminate the lease agreement prior expiry of the term just because of the transfer of ownership. For the obligations of the lease to the tenant, the previous landlord is also liable as a joint guarantor.
When a lease agreement is concluded, and the real estate is in factual possession of the new owner, he steps in the place of the previous owner with all rights and obligations under the agreement provided that in the moment of conclusion of the agreement for the transfer of the ownership he was familiar with the lease agreement. Otherwise, if the new owner is not familiar with the lease is not obliged to hand over the leased real estate to the tenant and the latter may request compensation for damage from the previous owner.
The tenant is entitled at any time to terminate the agreement due to the transfer of ownership respecting the legal or the agreed notice periods.
7 Zoning and Planning
7.1 How Are Use, Planning, and Zoning Restrictions on Real Estate Regulated?
Depending on the scope of urban planning, as well as whether the subject of the planning is of national or local importance, the following urban plans are adopted:
1. General urban plan;
2. Detailed urban plan;
3. Urban plan for a village;
4. Urban plan for non-residential areas and
5. Urban plan for areas and buildings of state importance.
An urban plan for areas and buildings of state importance is a plan that is prepared in accordance with the Spatial Plan of the Republic of North Macedonia and serves for its implementation and development and is adopted for areas and buildings of state importance that are not covered and cannot be regulated by urban plans of local importance.
Areas and buildings of state importance are considered to be areas and buildings, infrastructures, and superstructures of international, republican, regional, and more municipal nature and of strategic importance for the state.
Only in the procedure for adopting the Urban plan for areas and buildings of state importance and for non-residential areas, feasibility study is a pre-condition and has a separate regime of planning.
The feasibility study is prepared before the urban plan for areas and buildings of state importance and the urban plan for non-residential areas for complex buildings of local importance that do not have a construction or urban planning history, as a rule for engineering buildings or other large and complex buildings from the groups of purpose classes G and E for which there are no previous planning or project data, that is, for spaces that are being arranged for the first time and for which there is a need for previous research and assessments.
A feasibility study is prepared to ensure objective and informed decision-making for starting the procedures for the adoption of an urban plan and urban project, from the aspect of the spatial, ecological, financial and economic justification of the construction project, the construction of which requires the urban plan.
7.2 Can a Planning/Zoning Decision Be Appealed?
According to the Law on Spatial and Urban Planning, there is an opportunity to submit comments on the urban plan, during the public presentation and the public survey.
For the conducted public presentation and public survey, a report is drawn up with a rationale for the accepted and unaccepted comments on the urban plan, by an expert commission formed by the mayor of the municipality. The report is an integral part of the plan, and the accepted comments from the public survey must be incorporated into the draft plan.
Besides the procedure regulated in the Law on Spatial and Urban Planning, there is a possibility for anyone to submit an initiative to start a procedure in front of the Constitutional Court for evaluating the constitutionality of a law and the constitutionality and legality of a regulation or a general act, by submitting an Initiative. The petitioner of the initiative and the governing institution that adopted the contested act are participants in the proceedings in front of the Constitutional Court. The procedure concludes with an adoption of a decision by the Constitutional Court.
The decision for adoption of an urban plan can be the subject of an initiative for evaluating its constitutionality and the legality in front of the Constitutional court.
