International legal guide to real estate in Montenegro

possession and acquisition, transfer, protection and termination of these rights;

(iii) the Law on State Property [Zakon o državnoj imovini], which regulates the use, maintenance, and transfer of real property owned by the state and local government;

(iv) Law on State Land Registration and Real Estate Cadastre [Zakon o državnom premjeru i katastru nepokretnosti], which regulates the organization and registration of information on real estate and the organization of the land cadastre;

(v) Law on Return and Compensation [Zakon o povraćaju oduzetih imovinskih prava i obeštećenju], which regulates issues related to denationalization, property rights and compensation; and

(vi) The Law on Housing and Maintenance of Residential Buildings [Zakon o stanovanju i održavanju stambenih zgrada], which'''regulates apartment ownership.

1.2 What is the role of customary law in Montenegro in relation to real estate? Given that Montenegrin law is based on civil law, court precedents do not have a significant impact on real estate law. However, Montenegrin jurisprudence (i.e. non-binding precedent) will be taken into account by judges when making new decisions.

1.3 Does international law matter for real estate in Montenegro? Please ignore EU law adopted locally in EU countries. International law such as international treaties and conventions relating to real estate apply if they have been ratified by the Montenegrin Parliament. Verified international treaties have''supremacy over national law.

2 Property

2.1 Are there legal restrictions on real estate ownership for certain categories of persons (non-residents, for example)? Foreign natural and legal persons may not acquire ownership of natural resources, public goods, agricultural land, forests and timber, cultural monuments, real estate within one kilometer of the state border, islands, and real estate in areas designated as non-acquisition by foreign persons for defense and security reasons.

3 Real estate rights

3.1 What types of land rights are recognized in Montenegro? In total, the following rights to' are recognized in Montenegro'land plots:

(i) ownership (individual ownership, joint ownership and condominium);
(ii) encumbrances;
(iii) mortgages;
(iv) grant of priority right;
(v) right of use;
(vi) long-term lease; and
(vii) finance lease;

To be valid against third parties, real estate rights must be properly registered at the Land Registry.

3.2 Can real estate rights be different from rights to a building built on them? If the state, under the State Property Law, leases state-owned land to private investors for construction, it retains the right to''ownership of the land, while the private investor acquires ownership of the structures built on it.

4 Registration System

4.1 Does all land in Montenegro have to be registered? Which lands (or rights) are not registered? The general rule under Montenegrin law in the Law on State Land Registration and Real Estate Cadastre prescribes that all rights in rem, e.g. property (sole ownership, joint ownership, joint and indivisible ownership and condominium), lease rights, rights of use, easements, mortgages, etc., must be registered to be valid against third parties.

4.2 Whether ownership is guaranteed'by the 'state? What does it guarantee? The right to property is guaranteed by Article 58 of the Constitution of Montenegro. In addition, in accordance with the principle of reliability, entries in the Land Registry are considered correct and accurate. Consequently, any person relying on the information contained in the Land Registry is protected from the claims of third parties, even if it turns out that the registered information is incorrect or incomplete.

4.3 What rights to land must necessarily be registered? What are the consequences of non-registration? Registration of ownership of land and other real estate is mandatory. In accordance with the Law on State Land Registration and Real Estate Cadastre, every transfer, transition or restriction of rights to''real estate must be registered in the relevant land registry in order to be valid against third parties. In addition, the Law on State Land Registration and Real Estate Cadastre requires that every person acquiring a right to real estate (including the person alienating such right) must provide the competent administrative authority (Real Estate Office/Uprava za nekretnine) with a copy of the relevant sale contract.

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Failure to do so may result in the imposition of a fine.

4.4 Which land rights do not require registration? Leases for up to five years do not require registration.

4.5 If there is registered and unregistered land or rights at the same time, is there a''Probationary period after first registration or possibly a distinction in first registration rights? Please provide details. First registration means the case when unregistered land or rights are first registered in the registers. Montenegrin law does not recognize a probation period after the first registration. However, registration can be appealed to a higher administrative body within 8 days from the date of receipt of the registration decision. If the appeal is rejected or the appeal is not applicable, the registration can be challenged before a court within 30 days from the receipt of the registration decision.

4.6 When selling land, when does the right (or ownership) pass to the buyer? According to Montenegrin''By law, the right to real estate can only be acquired from a registered predecessor by means of a contract of sale, which constitutes the legal basis (iustus titulus) for the transfer of ownership of real estate, and registration in the land registry is a condition for the establishment of ownership (modus acquirendi). The ownership right is considered to be transferred upon registration of the right in the land registry.

4.7 Please briefly describe which rights acquire priority over other rights. The initial right of priority (prior in tempore potior in iure) applies to the registration of real estate rights. This means that the time of application to the competent authority is decisive for real estate rights,''provided that all requirements for successful registration have been met. The right holder (i.e. acquirer) who registered first has priority over subsequent asserted rights (i.e. acquirers).

5 Register / Registries

5.1 How many real estate registries are there in Montenegro? If there is more than one, please indicate their different rules and requirements. The Republic of Montenegro is currently in the process of merging the existing land registries. In accordance with the Law on State Land Registration and Real Estate Cadastre, one unified register (i.e. the Land Register) will be established. The respective Land Register contains all necessary information about the land plot. Namely, it contains: (i)