New Amendments to the Law on Planning and Construction

Pave the Way to Easier Legalization

On 26th of July 2023, the Serbian Parliament adopted the amendments to the Law on Planning and Construction. The primary goal of these amendments is to simplify the process of legalizing illegally developed buildings and obtaining building permits in a more efficient and cost-effective manner.

One of the significant changes in the amended law relates to the validity period of the construction permit. Under the new provisions, a construction permit will expire if a use permit for the building is not issued within five years. To avoid this expiration, investors can apply for a renewal of the building permit for an additional two years. However, this extension is only possible if the investor can demonstrate that the construction is over 80% complete.

In an effort to reduce the financial burden on investors, the amendments also introduce a reduction in the fee for legalizing facilities, particularly for socially disadvantaged individuals. The volume of technical documentation required for the legalization process has been reduced, and the list of evidence needed to confirm the resolution of property and legal relations has been expanded.

To further incentivize the legalization of buildings, certain categories of the population will benefit from significant reductions in the fee for building land in the legalization process for family residential buildings and apartments up to 100 square meters. Moreover, all owners of properties up to 100 square meters will also enjoy a 60% reduction in fees, regardless of fulfilling special conditions.

To facilitate the legalization process, citizens can now opt to have the municipality handle the documentation on their behalf. Additionally, co-owners who did not oppose the construction will be considered to have agreed to the legalization.

The amendments also address the issue of newly built facilities not receiving use permits promptly. If, within 90 days of the technical inspection commission’s formation, the competent authority fails to issue a use permit or denies its issuance, the building can still be used without a permit.

Another key addition is regarding the area of energy efficiency, thus the amendments introduce requirements for all building to obtain mandatory energy passports certifying the buildings energy efficiency and environmental impact.

Regarding documentation requirements, building owners can now pay for the necessary documentation in installments over two to four years, making the process more financially manageable.

Notably, the municipal administration can now request additional documentation for the issuance of a construction permit only once, streamlining the bureaucratic process. Public companies, on the other hand, have one month to provide consent.

The amended law maintains the provision for converting the right to use construction land into ownership with compensation. Owners of companies acquired through privatization or bankruptcy will be required to pay this compensation.

For land conversion fees, the value will be determined based on a Government decree or local self-government acts, through urban planning zones. However, no fee will be required for land converted from agricultural to construction use before July 15, 1992.

In a significant development, all owners of construction land in public ownership, including state-owned land, can now dispose of their land. This allows the state, through the RS Directorate for Property, to sell or lease construction land, which was not possible previously.

The amendments include revised validity periods for permits, reduced fees for legalization, streamlined documentation requirements, mandatory energy passport for all buildings and the possibility of municipal assistance in collecting documentation. Although some aspects of these changes have caused controversy, the overall effect is expected to be positive, encouraging the growth of the construction industry and facilitating processes for investors.