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Law on planning and construction (“Official Gazette of the Republic of Serbia” No.72/2009 and 81/2009-corr.)

National Assembly of the Republic of Serbia has passed on August 31st, 2009 the Law on planning and construction (hereinafter “the Law”). The Law was published in the Official Gazette of the Republic of Serbia no. 72/2009 on September 3rd, 2009 and came into force the eight day since the publishing, on September 11th, 2009.

The new provision in the Law in comparison to the previous Law on planning and construction is introduction of spatial plan of Republic of Serbia and creation of Central register for spatial documents for territory of Republic of Serbia.

Spatial and urban planning is simplified with reduction of number of necessary spatial documents. Municipalities and cities must create a spatial plan within 18 months since the day of the coming into force of the Law, at the same time while information systems should be available in electronic form via internet to everyone interested.

Local governments are obliged to introduce register of investors and/or record on all available data about natural persons and legal entities who are investors.

One of the significant new provisions in the Law is the possibility to convert a right to use a plot into property on plot with or without a reimbursement. The deadline for the demand on conversion is September 11th 2009. If the interested party fails to send a demand for conversion, competent authority will ex officio make a decision and terminate rights to use of current user and establish a property right for local government. The process of conversion is initiated on demand of the rightful user. Local government will decide on demand (ex. for the City of Belgrade competent authority is Secretariat for Property Rights and Building Inspection).

Public and legal entities, whose founder is a public entity, will not pay for conversion of rights to use into property. In this case the demand is made by Public Attorney. On already developed plots, when demand for conversion is made by interested party, conversion of rights will also be free. It is necessary to pay attention to area and relation to the cadastre lot of the land necessary for regular use of built object.

The right to use a plot can be converted into property, with reimbursement of the market value of the plot in the moment of conversion of rights, reduced for expenses of acquisition of right to use a plot in case of plots in state and/or public ownership, when companies and other legal entities in process of privatization, bankruptcy and enforcement procedure, as well as their legal successors, are entitled with the right to use that plot. In this case conversion is being made on singular cadastre plot, when interested party must make a demand. Decision is made by the competent authority for property rights of local government on whose territory plot is situated.

If a plot is not converted within a year since the coming into force, competent authority ex officio declares the termination of rights to use and establishes property rights for local government of territory where plot is situated.

Privatized companies have somehow unfavorable position compared to other legal entities, because they are allowed to convert right to use plot into property only after they paid buying price in the process of privatization and after receiving a confirmation from the Privatization Agency. They also need to pay a fee for conversion into property.

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