The new law on planning and construction in Serbia

14 February 2010 - Comments (1)

Procedures

Last August, the New Law on Planning and Construction was adopted by the Parliament of Serbia. It came into force on the 11th of September 2009. This New Law redefines most of the rules applying to land onwership, construction and legalization. In this first article, we present an overview of the changes. We will detail specific aspects in further articles and updates of existing ones.

Highlights

This New Law on Planning and Construction was widely expected. It aims at improving the investment environment in Serbia and to make it more in line with European standards. Amongst important changes, the new law introduces a simplified procedure for issuance of construction permits and makes them transferable, it better defines deadlines for actions by public entities, it allows private ownership of urban construction land and last, introduces a simplified procedure for legalizing objects built without construction permits.

Transition and confusion

Although the New Law was voted last August, some of the articles stayed unclear regarding their application. Some bylaws have been enacted since then but some others have been missing. The situation is being updated as we write this. In fact, the New Law created a tense situation in the construction sector. An article in BLIC last month, "Serbia without a building permit", stated that only 20 location permits have been issued since last September on 800 claims.

In an interview in Politika at the end of January, Minister Dulić reaffirmed that the critics were not justified and that the situation was being unlocked. It seems that the whole thing had not been prepared as well as it should have and that the Ministry did not anticipate the far reaching consequences of the New Law. The current period is one of transition and confusion.

Spatial and urban planning

The New Law introduces a clear hierarchy of spatial and urban planning documents and an obligation for the local authorities to produces them in a given time frame. One can expect that the General Urban Plan of Belgrade, otherwise known as the Belgrade Master Plan 2021, will be revised to take into account the spontaneous urbanization (mushrooming of illegal constructions) that has happened since it has been voted.

In addition, we can expect that all urban land in the Belgrade area will soon be covered with proper General Regulation Plans.

The New Law also clearly states that all planning documents will be centralized and made available on-line over the Internet (Articles 42 and 43).

Ownership of the land

The big change introduced by the New Law concerns the conversion of rights of use to rights of private ownership (Articles 100 to 109). That conversion can be done with or without compensation.

Developed land

For already developed land the conversion will be done without compensation. Users of that land will become owners.

An exception applies for land from former state companies that have been privatized or bought following a bankruptcy procedure. In those cases "the right of use can be converted to the right of ownership, along with the compensation of the market value of such buildable land at the time of conversion of rights, reduced by the expenses of gaining the right of use on that buildable land." (Article 103).

Undeveloped land

In case of undeveloped land, the text of the New Law does not clearly states that actual users of undeveloped lands can convert it to private ownership without paying any conversion. At this moment of writing, it is still unclear and no bylaws have yet clarified this point. The logic answer should be that any user that has the right to obtain the article 84 on a land by the former law, has the right to convert it to private ownership, without compensation, by the New Law.

Again, an exception applies for land from former state companies that have been privatized or bought following a bankruptcy procedure. Compensation will have to be paid in those cases.

Article 84 no more

The article 84 on a plot of land, as it is called, is a formal paper based on the article 84 of the previous Law on Urban Planning and Construction (UPC, Zakon o planiranju i izgradnji, Official Gazette of the Republic of Serbia No. 47/2003) allowing to trade user rights on a land.

In the New Law, which creates private ownership of the land, that article 84 does not have translation. Therefore, in the current situation, it is not possible to obtain the article 84 for a land anymore.

Users on a given land, who have obtained the article 84 before the New Law, should still be able to trade that land without conversion to private ownership. Users, who do not have the article 84 for their land, cannot obtain it anymore. Therefore, in the current situation, they cannot sell it until they convert their users right to property rights. Only then, will they be able to trade their land again.

The best now is to wait for the bylaws that will clearly establish the conditions for the conversion of user rights to property rights for undeveloped lands.

Building permit

The most significant change in the New Law regarding building permit is probably its transferability from one investor to another during construction (Article 141). That was not possible before.

Act on urban conditions no more

The New Law suppresses the act on urban conditions (also called urban plan excerpt). This formal document was delivered by the Secretariat for Urban Planning and Construction and was key to initiate a building permit. Now it is possible to obtain information on a location from the Secretariat by asking a location info (Article 53). This is an informal document that is not mandatory anymore. The location info will only be requested for auxiliary buildings such as garages and small electrical substations.

Location permit

In the New Law, the first step toward the building permit is to obtain the Location Permit (Articles 54 to 57). This first permit is delivered by the Secretariat for Urban Planning and Construction or the local goverment based on a building project on a given land. It is given with a clear deadline : "The responsible agency is obliged to issue a location permit within 15 days from the day of submission of a regular application" (Article 56).

Building permit

The next step is to obtain the proper building permit. It seems that not much changed from before. Of course, property rights have to be clear by the New Law and that may prove to be the challenging part. Importantly, Article 219 states that, if the usage right was obtained before the New Law came into force, it can be used as the basis for submitting the request for the construction permit in accordance with the New Law.

Strangely, one paragraph in the New Law (Article 151) suggests that local governments (municipalities) are responsible to issue building permits for objects whose total gross surface do not exceed 2.000m². That would be a big change from before (it was 800m²), but it needs to be confirmed.

Legalization of objects

The New Law allows for the legalization of "all constructed, reconstructed or enlarged facilities without construction permit up to the date when this Law became effective" (Article 185). The request for legalization has to be submitted before 11th march 2010 (Article 186). This is only the request, the documentation can follow at a later date.

Article 187 lists the cases in which objects, built without building permit, cannot be legalized. It is basically when the object is built in the wrong place and/or the wrong way and could not have possibly obtained a valid building permit.

We will come back to the legalization of objects in more details in another article.

Energy efficiency

The new Law gives a clear orientation toward energy efficiency of new buildings but stays vague regarding the concrete form it is going to have.

«The development and use of space is based on the following principles: sustainable development; the encouragement of even regional development; reconciliation of social development, economic and energy efficiency and the protection and revitalization of the environment and building heritage, natural, cultural and historic values; the realization of developmental priorities and the securing of conditions for rational use of non-renewable natural resources and renewable sources of energy; (...)»

Law on planning and construction, Article 3 (emphasis added)

One very surprising fact (Article 26) is that the detailed measures of energy efficiency in construction are supposed to be contained in the General Regulation Plan of a particular area. One could think that measures of energy efficiency would be decided centrally and enforced globally. They should not be different from one General Regulation Plan to another. This is very unclear and sounds completely mislead to us. Let's hope that the future Law on Rational Use of Energy will address and clarify that.

References

New Law on planning and construction (11/09/2009)

Integral text of the new Law on planning and construction in Serbia (“Official Gazette of the Republic of Serbia”, No. 72/2009 on 11th September 2009).

Bylaw on criteria and rules for the legalization of objects built without permit (02/11/2009)

Pravilnik o kriterijumima za određivanje naknade u postupcima legalizacije, kriterijumima za objekte za koje se ne može naknadno izdati građevinska dozvola, kao i o sadržini tehničke dokumentacije i sadržini i načinu izdavanja građevinske i upotrebne dozvole za objekte koji su predmet legalizacije.

Official Gazette No. 89 on 2nd November 2009. Available on legalizujte.

Decision on the rules for the calculation of the construction tax (28/12/2009)

Odluka o merilima za utvrđivanje naknade za uređivanje građevinskog zemljišta, Parliament of Belgrade, meeting of 28/12/2009. Available on beoland.

Annex on the previous bylaw (05/02/2010)

Pravilnik o izmenama i dopunama Pravilnika o kriterijumima za određivanje naknade u postupcima legalizacije, kriterijumima za objekte za koje se ne može naknadno izdati građevinska dozvola, kao i o sadržini tehničke dokumentacije i sadržini i načinu izdavanja građevinske i upotrebne dozvole za objekte koji su predmet legalizacije.

Official Gazette No. 5/2010 on 5th February 2010. Not available yet on legalizujte but here.

Bylaw on the content of the location information and of the location permit (22/01/2010)

Official Gazette, No. 72/09 and 81/09-correction. Not available online.