Enforcement sales are the part of the Montenegrin property market that foreign buyers hear about second-hand. The headline is a price floor that falls to thirty per cent of appraised value, and the assumption that follows is that a judicial sale delivers a clean asset at a discount because the state is running it.
The Act is more specific than that, and in three places it is specific in the buyer's disfavour. A real servitude on the land never lapses. A lease concluded before the enforcement decision, where the tenant was let into possession, survives the sale and the buyer becomes the landlord. And a person holding a statutory right of pre-emption can step in immediately after the auction closes and take the property on the terms you just bid.
Article numbers below are from the Zakon o izvršenju i obezbjeđenju, chain "Službeni list Crne Gore" br. 036/11, 028/14, 020/15, 022/17, 076/17, 025/19 and 070/26 of 20.05.2026, read on 5 September 2026 in the consolidated text published by the Central Bank of Montenegro. That consolidation is unofficial; article numbering should be confirmed against the Official Gazette before it is relied on in a filing. General information about Montenegrin law, not advice on a particular purchase.
Who is allowed to bid
Article 177 lists who cannot be the buyer, whether at auction or by direct agreement: the debtor; the debtor's founder or authorised person; the judge, the public executor, anyone employed by the public executor and anyone else officially participating in the sale; their blood relatives in the direct line to any degree and in the collateral line to the fourth degree; spouses; in-laws to the second degree; guardians, adoptees and adopters.
The list closes with a clause that matters more to a foreign bidder than all the rest: a person who by law cannot acquire the property that is the subject of the execution cannot be the buyer.
That clause imports the general ownership restrictions into the auction room. Where a foreign natural or legal person could not have bought the asset by private treaty, the enforcement sale does not open a second door. The restriction has to be resolved before the security is lodged, not after the hammer falls, because the question is one of capacity to acquire rather than of procedure.
Article 175 then limits the room to those who have paid to be in it: only persons who have previously lodged security may participate, and the security is one tenth of the determined value of the property. An execution creditor or a mortgagee execution creditor is exempt where their claim reaches the amount of the security and, given their ranking and the determined value, that amount could be satisfied out of the purchase price.
Unsuccessful bidders are refunded immediately on the close of the auction — except the second and third bidders, whose security is returned only when the winning bidder actually pays. And a winning bidder who does not pay the price within the period set does not get the security back at all.
Article 176 disposes of the hope that a thin turnout stops the sale: the auction is held even if only one bidder attends. On a party's or mortgagee's proposal the executor may postpone it by up to 15 days in that case, but is not required to.
The floors, and the number they are a percentage of
Article 173 sets the price floors, and they fall in three steps:
| Auction | Property may not be sold below |
|---|---|
| First | 80% of the determined value |
| Second | 50% of the determined value |
| Third | 30% of the determined value |
At least 15 and at most 30 days must pass between auctions. Separately, the parties and the mortgagee creditors may agree — by a statement recorded before the public executor conducting the execution — that the property may be sold at auction below the determined value.
The percentage is only as meaningful as the value it is applied to, and that value is not a cadastral or tax figure. Article 166 requires the public executor to determine the value after the enforcement decision is issued, at market price on the day of valuation, and permits an appraisal from an authorised valuer or an expert's finding and opinion. Article 168 fixes it by a formal decision.
Article 167 contains the provision that ties the whole chapter together: in determining the value, account is taken of how much less the property is worth because certain rights remain on it after the sale. The Act therefore assumes that rights survive the sale, and prices them in. A discount against determined value is not automatically a discount against market value — part of it may already be the statutory answer to an encumbrance the buyer is about to inherit.
What the sale does not wash off
This is where an enforcement purchase differs most sharply from a private one.
Article 162 governs servitudes and real burdens:
| Right | Effect of the sale |
|---|---|
| Real servitudes (stvarne službenosti) | Do not lapse. No qualification, no exception |
| Personal servitudes and real burdens registered in the cadastre before the rights of the mortgagee execution creditors and of the creditor on whose proposal execution was ordered | Do not lapse — though a personal servitude may be extinguished at the creditor's request against appropriate compensation |
| All other personal servitudes and real burdens | Lapse on sale |
Article 163 governs leases, and its two conditions are cumulative. A lease of the property does not terminate on sale where the lease contract was concluded before the enforcement decision was issued and the property was handed into the lessee's possession. Where both are true, the Act states the consequence in one sentence: the buyer steps into the rights and obligations of the lessor.
A bidder who inspects the property and finds it occupied is therefore looking at two very different situations that appear identical from the doorway. If the tenancy predates the enforcement decision and possession was given, the buyer acquires a landlord's position on somebody else's terms. If it does not, Article 184 allows the executor, after the handover conclusion, to order other persons found in the property to vacate — expressly except in the cases covered by Articles 162 and 163.
The document that is supposed to tell a bidder which of these applies is the conditions of sale. Article 174 requires them to contain, among other things, a closer description of the property with its appurtenances; the indication of third-party rights that do not cease on the sale; the indication of servitudes and real burdens that the buyer takes over; the appraised value; the period within which the buyer must pay; and the method of sale together with the amount of the security, the deadline for lodging it, with whom and how.
Reading that document, rather than the advertisement, is the whole of the diligence available before a bid. Article 164 supplements it with a right of access: the public executor must allow a person interested in buying to view the property at a suitable time.
The bid you can win and still lose
Article 170 is the provision most likely to surprise a foreign bidder.
A person holding a statutory right of pre-emption over the property being sold has priority over the most favourable bidder, if at the auction, immediately upon its close, they declare that they are buying the property on the same terms. A person holding a contractual right of pre-emption exercises it on the same footing where no statutory right existed, or where the holder of the statutory right did not use it.
The sale conclusion under Article 169 is delivered to the parties, the mortgagee creditors, the participants in the proceedings and the persons who have a registered statutory right of pre-emption — so the holders are notified and present by design. Where the sale is by direct agreement rather than auction, Article 171 requires the executor to invite the statutory pre-emptor, the contractual pre-emptor whose right is registered in the cadastre, and the execution creditor to declare in writing whether they will use the right.
Article 178 sequences it plainly: the auction closes immediately after the last announced price is not accepted, and only after the close and any declaration on the right of pre-emption does the executor announce the highest bidder and award the property, issuing a conclusion on the award.
A bidder who has not established, before lodging security, whether a registered pre-emption right exists over the parcel is bidding to set a price that somebody else may take.
Paying, and what happens if you do not
Article 180 requires the buyer to pay within the period set in the sale conclusion, and Article 174 caps that period at 30 days from the day of the sale. Where the buyer is an execution creditor whose claim is less than the price achieved, and who could be satisfied out of the price given their ranking, they pay only the difference.
If the highest bidder does not pay in time, the executor declares the sale to that bidder without legal effect and calls the second-ranked bidder to buy; if that bidder also fails, the same rule runs to the third and each subsequent bidder. If none pays, the executor proceeds under Articles 94 and 95. From the defaulting bidder's security, the Act covers the costs of the new sale and any difference between the price achieved earlier and the price achieved on the new sale — so the exposure of a bidder who cannot complete is not capped at the deposit's loss of use, it is measured by what the property later fetches.
Getting title, and how secure it is
Article 181 is the buyer's protection, and it is stronger than most private-purchase protections in Montenegrin law.
Once the price is paid, the public executor issues a conclusion that the property be handed over to the buyer and that the right of ownership be registered in the cadastre in the buyer's favour. It is delivered to everyone who received the sale conclusion and to the tax authority.
A request to remedy irregularities may be filed against that conclusion, decided by the court under Article 65. An objection against that decision does not suspend the execution. And the Act adds the sentence that matters: a decision finding the request well-founded does not affect the completed sale, but may be a basis for compensation of damage.
In other words, a procedural defect in the enforcement does not unwind a completed auction purchase. The person harmed is directed to damages, and the direction of that claim is away from the buyer's title. Article 181 is the reason an enforcement purchase, once the price is paid and the conclusion issued, is harder to disturb than the procedure leading up to it would suggest.
Article 182 provides that on handover the debtor loses the right of possession and must give the property to the buyer immediately after the handover conclusion is served, unless the law or an agreement with the buyer says otherwise, and Article 183 has the executor order the debtor to vacate, with eviction carried out under Articles 224 to 227.
Where the money goes
Article 185 has the executor begin satisfying creditors immediately after the sale, or after receipt of the price.
Article 186 identifies who is satisfied from it: the execution creditor on whose proposal execution was ordered; the mortgagee execution creditors, even where they did not register their claims; and persons entitled to compensation for personal servitudes. Any surplus goes to the debtor. Where the price is insufficient, claims of equal rank are satisfied proportionally. Article 187 puts the costs of the execution proceedings first in the order of priority.
The Act does not, in this chapter, state in terms that a registered mortgage is extinguished by the sale. What it does is direct the price to the mortgagee creditors and require the conditions of sale to name the third-party rights that do not cease. For a buyer, the operative document is therefore Article 174's conditions of sale rather than an assumption about what a judicial sale clears.
One further limit is worth noting for anyone bidding on land: Article 165 provides that agricultural land of a farmer, up to an area of 10 ari, cannot be the subject of execution — a restriction that does not apply where the claim is secured by a contractual mortgage over the property.
What to establish before lodging security
An enforcement purchase in Montenegro is not a discounted version of a private purchase. It is a different transaction with its own disclosure document, its own irreversibility, and its own list of things that pass with the land.
Four questions are answerable before any money moves, and all four are answered from documents rather than from the property: whether the bidder is legally capable of acquiring this asset at all under Article 177; whether a statutory or registered contractual right of pre-emption exists under Articles 170 and 171; what the conditions of sale identify under Article 174(2) and (3) as surviving the sale; and whether any occupation of the property is a lease that satisfies both conditions in Article 163.
A bidder who has those four answers is buying a known asset at a floor price. A bidder who has only the floor price is buying the answers.
If you are considering a Montenegrin enforcement sale, our real estate investment work covers the conditions of sale and the encumbrance position before a bid, and enforcement and insolvency covers the enforcement proceedings themselves.
