Building Legalization in Montenegro: The 2025 Law Explained
14 October 2026 · The Invest-Me team — owners of a working rental business in Žabljak
The short version: since 14 August 2025 Montenegro has a new law on legalizing unauthorized buildings (Sl. list CG 91/25), and the clause that matters to a buyer is Article 33. A building without a legalization decision (rješenje o legalizaciji) cannot be transferred, and no activity can be run in it, rental included. Legalization is the procedure that gives a building lawful status. For a deal, that means you check a house's status before you look at price or yield.
We are selling our own four-house complex in Žabljak, so we go through this check from the seller's side. What follows is general fact as of October 2026, with no promises about any specific property. Practice shifts, so decide with a Montenegrin lawyer.
What did the 14 August 2025 law change?
It tied a building's status directly to the right to dispose of it. The law applies from 14 August 2025 and replaced the earlier text that older online advice relies on. If you are reading a 2024 guide, its "just legalize it later" logic may now be wrong.
| Item | Rule under the law |
|---|---|
| Selling a building without a legalization decision | Not allowed (Art. 33) |
| Activity in such a building, rental included | Not allowed (Art. 33) |
| Cadastre registration deadline | 14 August 2026 |
| Legalization application deadline | 20 September 2026 |
| A building not registered in time | Risk of a removal decision (rješenje o uklanjanju) |
Both dates in the table have passed. Whether the deadlines were extended, and how they apply to a given building, is for a lawyer to confirm; we won't claim it on their behalf.
Can you buy a house today without a legalization decision?
Not directly as an asset deal, in practice. An asset deal is the purchase of the property itself, not of shares in a company. Article 33 bars transferring such a building, and since September 2025 the Notary Chamber has suspended deals on buildings without legalization.
So the market discusses workarounds. The best known is a share deal: buying the shares of the company that owns the property. Shares are not a transfer of the building, and no property transfer tax arises. But the buyer inherits the company along with the legalization risk, so the talk is usually of a discount or escrow. Notary practice differs where an application has already been filed. That is a question for a lawyer, not for do-it-yourself experiments. We compare the structures in our article on asset deals versus share deals.
Why does this hit a rental business hardest?
Because the income here is activity inside the building, and under Article 33 activity also requires the legalization decision. If a house's status is unconfirmed, it is not only the sale that is in question but the lawfulness of renting it out. For an investor working out yield, that is a risk above the usual.
Our order is: status first, numbers second. The gross income of our four houses is €48–56k a year and net yield is roughly 10–11% of the price, backed by a Booking export on request. Yet each of those figures only means something if the house is lawfully registered and allowed to operate. To check the figures themselves, see our guide to buying a turnkey rental business.
How fast are decisions issued?
Slowly. From figures we collected in August 2026, about 59,500 applications had been filed and about 3,200 decisions issued. It is a rough ratio, but it shows the order of magnitude: expecting a decision within a couple of weeks of a deal is unrealistic.
The practical takeaway: do not build "we'll get the decision in a month" into a deal timeline. If status is not yet confirmed, settle terms with a lawyer up front. What counts as sufficient proof for the notary, who bears which costs, and how your money is protected until a decision arrives.
What should you ask the seller for?
Ask for paper, not assurances. A minimum set: a fresh list nepokretnosti showing the buildings, documents on each building's status, the legalization decision or proof that an application was filed, and a check of areas on paper against reality. How to read the extract is in our piece on property due diligence.
Questions worth asking out loud:
- Is every building in the cadastre, and does the count match what stands on the plot?
- Is there a legalization decision, and if not, was an application filed, and when?
- What does the notary say about a deal with this status?
- Does the contract protect the buyer if the status changes?
A straightforward seller answers with documents. If they dodge, that tells you something about the deal.
Where we stand
The Family House Pleme properties are owned and registered. Legalization is a standard procedure and is open to the new owner. We show the full status of each house in the document pack before the deal, before any deposit, not after. No drama and no hiding: that is how a conversation about status should look.
You can see how the numbers and the document list are laid out on the Family House Pleme page. If you are looking at another property, the same questions apply to it.