Real Estate Comparative Guide

• Published date: 06 December 2021
• Subject Matter: Real Estate and Construction, Construction & Planning, Real Estate, Landlord & Tenant - Leases
• Law Firm: Vuković & Partners
• Author: Ms Jovana Čapaković and Predrag Stojanovski

1 Legal framework

1.1 What legislation governs real estate in your jurisdiction?

• The Law on Real Estate Transaction;
• The Law on Agricultural Land;
• The Forest Law;
• The Law on the Fundamentals of Property Relations;
• The Law on Obligations (with accompanying bylaws);
• The Law on Housing and Maintenance of Buildings;
• The Law on Planning and Construction;
• The Law on Mining and Geological Research;
• The Law on Public Property;
• The Law on Expropriation;
• The Mortgage Law; and
• The Law on the Procedure for Cadastral Registration of Real Estate and Lines.

1.2 What special regimes apply to different types of real estate?

The Law on the Fundamentals of Property Relations stipulates that natural persons and legal entities may have a right of ownership to:

• residential buildings;
• apartments;
• business buildings;
• business premises;
• agricultural land; and
• other real estate, except for natural resources that are state owned.

In addition, natural persons and legal entities may have the right of ownership to:

• certain goods in general use and on construction land, in accordance with the law; and
• forests and forest land, within the limits established by law.

The Law on Public Property sets out a different legal regime for publicly owned real estate (construction land, agricultural land, water land, forests and forest land), such as:

• natural resources;
• goods of general interest; and
• goods in general use.

Natural resources: The following natural resources are owned by the Serbian state:

• waters, watercourses and their sources;
• mineral resources;
• groundwater resources;
• geothermal and other geological resources;
• reserves of mineral raw materials; and
• other goods that are determined as natural resources by a special law.

The exploitation and management of natural resources are regulated by special laws. Also, a concession or right of use (ie, exploitation) over natural resources can be acquired in accordance with special laws. The fee for the use of natural resources is paid to the Serbian state, the autonomous province and the unit of local self-government within whose territory the natural resources are located, in accordance with special laws.

Goods of general interest: These are state owned and are defined by law as goods of general interest (eg, agricultural land, forests and forest land, water land, water facilities, protected natural goods, cultural goods), which is why they enjoy special protection.

Goods in general use: These are state owned and represent goods which, due to their nature, are intended for use by all and which are determined as such by law (eg, public roads, public railways, bridges and tunnels on public roads, railways, streets, squares, public parks, border crossings).

The rights provided by special laws (eg, concessions, leases) can be acquired on goods in general use.

2 Ownership

2.1 What types of ownership rights exist in your jurisdiction?

Under Serbian law, the following types of rights on real estate are recognised:

• ownership right (freehold), co-ownership and joint ownership;
• servitude right;
• pledge (mortgage); and
• possession and usage right.

2.2 What ownership structures are commonly used in your jurisdiction?

Natural persons and legal entities that are classified as such under the applicable laws may have different ownership rights (eg, partnerships, joint stock companies, limited liability companies, non-governmental organisations).

Serbian law does not recognise the instrument of trust.

2.3 Are there any restrictions on real estate ownership in your jurisdiction?

Yes, Articles 82 to 85 of the Law on Fundamentals of Property Relations prescribe certain restrictions, as follows.

Foreign natural and legal persons conducting activities in Serbia may, under the conditions of reciprocity, acquire a right of ownership to real estate in the territory of Serbia that is necessary for them to conduct their activities. The state body in charge of trade issues will issue an opinion on whether the type of real estate acquired by contract is necessary for the foreign natural or legal person to conduct its activities.

A foreign natural person who does not conduct activities in Serbia may, under the conditions of reciprocity, acquire a right of ownership to an apartment or a residential building, just as a citizen of Serbia (eg, by contract or inheritance).

Exceptionally, the law may provide that a foreign natural or legal person may not acquire a right of ownership to real estate located in certain areas.

A court or other competent body before which the issue of reciprocity is raised may request an explanation from the body in charge of justice in the relevant jurisdiction (such an explanation may also be obtained at the request of interested persons).

2.4 Is ownership of land and buildings constructed thereon legally separable?

In Serbia, the principle of 'unity of immovable property' applies, which means that a land parcel and everything that is permanently connected to it constitute a single object of property rights.

The principle of unity of real estate is indirectly prescribed in the Serbian legal system through:

• Article 3 of the Law on Real Estate Transaction, which provides that it is not possible to sell a building without a corresponding right to land under the Law on Fundamentals of Property Relations (Articles 24 to 26); and
• Article 106 of the Law on Planning and Construction, which prescribes the establishment of the unity of real estate once a right of use has been transformed into a right of ownership on construction land.

2.5 What security interests can attach to real estate? How are they prioritised?

Mortgage and other obligation rights (eg, contractual right of pre-emption, lease).

Where more than one mortgage is registered on a single property, the priority is determined on the basis of the date of submission of the mortgage registration request, in accordance with the principle of priority prescribed by the Law on the Procedure for Cadastral Registration of Real Estate and Lines.

3 Registration

3.1 What body administers the land register in your jurisdiction?

The Republic Geodetic Authority (RGA) is a special organisation that conducts professional and state administration activities related to:

• state surveys;
• real estate cadastre;
• line cadastre;
• basic geodetic works;
• the address register;
• topographic-cartographic activity;
• real estate valuations;
• the geodetic-cadastral information system; and
• the national infrastructure of geospatial data and geodetic works in the engineering and technical fields.

3.2 Is registration of real estate rights, transactions and encumbrances mandatory? What are the consequences of failure to register?

It is, bearing in mind that ownership rights become effective only upon registration with the RGA. It is certainly in the interests of every person and legal entity to register their rights before the competent register.

The registration process is initiated in two ways:

• Ex officio: Courts, notaries, public executors and other bodies and organisations that issue, confirm or certify decisions must submit documentation for registration to the competent service for real estate cadastre.
• At the request of a party: This occurs if the procedure for the registration of property rights is not initiated ex officio (ie, where the documentation has a date which is prior to the enactment of the law that established the obligation of the above-mentioned bodies and courts to submit decisions ex officio on the change of the right holder to the RGA).

3.3 What are the formal and documentary requirements for registration?

The application for registration of rights must be accompanied by:

• a document which is the legal basis for registration in the real estate cadastre;
• other documents prescribed by law;
• power of attorney, if the request is submitted by an attorney at law; and
• proof of payment of the fee.

If the document that constitutes the legal basis for registration does not prove the continuity of the change with the entry in the real estate cadastre, documents proving such continuity must be attached to the request.

3.4 What is the process for registration?

Registration initiated ex officio: Upon submission of a registration request and the accompanying documents, the competent cadastre established by the RGA has a formal timeframe of five working days in which to process the request and issue a decision.

Registration initiated by a party: Upon submission of a registration request and the accompanying documents, the competent cadastre established by the RGA has a formal timeframe of 15 days in which to process the request and issue a decision.

3.5 Is registered information publicly accessible?

Yes. All registered data on real estate that is located in the territory of Serbia is publicly available on the website of the RGA at https://katastar.rgz.gov.rs/eKatastarPublic/PublicAccess.aspx.

4 Commercial leases

4.1 What types of commercial leases exist in your jurisdiction?

• Percentage lease: Base rent + turnover rent (a percentage of business turnover).
• Fully serviced lease (gross lease): The lessor pays all or most of the costs directly. These costs are often passed on to the lessee as a 'burden factor'.

4.2 Are the terms of a commercial lease regulated or freely negotiable? What do they typically cover (eg, duration; security deposit; rent; sub-letting; termination)?

The contracting parties are free to agree on a lease in accordance with the provisions of the Law on Obligations on leases. If a contract has not been concluded, the provisions of the law will apply. The contracting parties should try to agree on the terms of lease in as much detail as possible.

A fixed-term contract may terminate:

• upon the expiry of the period for which it was concluded; or
• by agreement.

In practice, the contracting parties may agree on:

• the circumstances under which unilateral termination is allowed; and
• the applicable...