Unlegalised Property in Montenegro: Causes and Risks

Trying to estimate property prices in a specific area of Montenegro based solely on online portals almost guarantees incorrect conclusions. Listings often include apartments and houses priced significantly below similar properties in the same neighbourhood. However, once the documentation is reviewed, it often turns out that the property is unlegalised. What does this actually mean?

In Montenegro, a large amount of real estate was built without the required permits. Some of these properties fall under amnesty rules and may be legalised in the future, but the process is complex, costly, and not always guaranteed.

For many years, unlegalised property was a full participant in the market. Many buyers saw it as an opportunity for a profitable investment: the price difference could reach up to 30%, with the expectation that the property could later be sold at a higher price once legalised. However, in August 2025, the situation changed dramatically.
What exactly happened — read here.

Where Did Unlegalised Property Come From?

After the breakup of Yugoslavia began in 1991 and Montenegro later gained independence in 2006, the country developed faster than urban planning regulations could keep pace. Many municipalities did not have approved zoning and planning documents in sufficient scope, so construction effectively took place in a “transitional mode”.

Construction was not strictly prohibited. An owner could build a house, register it in the cadastre and tax authorities, and obtain ownership rights — but with a note stating “nema građevinske dozvole” (“no building permit”). Such properties officially existed and could be disposed of: sold, gifted, or rented out.

A similar approach was used by some developers as well, with entire residential complexes entering the market without a complete set of permits.

The Legalisation Programme and Its Key Features

In 2016, the state attempted to address the issue in a systematic way by launching a mass legalisation programme. The law o regularizaciji neformalnih objekata allowed owners to legalise their buildings if certain conditions were met: submitting an application, providing a minimum set of documents, and paying komunalije — a municipal infrastructure fee.

The initial deadline for submitting applications was 15 July 2018. However, the number of applications far exceeded expectations. By October 2019, public authorities had processed only slightly more than half of the submitted cases.

At the same time, in 2018, an orthophoto map of the entire territory of Montenegro was created. It recorded every existing structure and became the key reference point: anything built later, or not visible on the images, is not eligible for legalisation in principle.

Important to note: Montenegro does not apply mass demolition as a general policy, except in cases involving protected natural areas. Instead, the state chose a softer approach — fines, restrictions, and bans on further transactions involving illegal properties.

What Is Happening Now?

As of the time of writing (December 2025), all transactions involving unlegalised property are prohibited, with only a few minor exceptions. Our position has always been clear: we did not recommend unlegalised properties to foreign buyers even before the ban.

Now, since these properties have effectively dropped out of market circulation for the long term, we have removed them entirely from our database. How the market has changed following the transaction ban — see here.

If you are looking to buy property in Montenegro, keep in mind that it is not only the “nema građevinske dozvole” note that signals a problematic asset. Court disputes and other legal encumbrances can also create serious risks.

The key recommendation is simple: check the documents carefully, ask questions, and work with professionals who value their reputation and do not offer questionable deals.