Almost every coastal development brochure in Montenegro offers the same thing: a hotel room sold to you personally, run by an operator, with a share of the revenue and some weeks of your own use. What the brochure rarely says is that this is not a commercial invention. It is a statutory regime, it exists in two forms only, and the statute — not the developer — fixes several of the numbers you are being sold.
Start from the default, because it is the opposite of what most buyers assume. Article 72(1)(1) of the Zakon o turizmu i ugostiteljstvu classes hotels and similar facilities (tourist village, motel, pension, eco lodge, wild beauty resort) as its first indent and camps of 16 or more units as its fourth. Article 72(2) then provides that accommodation units in the facilities of those two indents cannot be alienated at all. Article 72(3) carves out a single exception: units, as special parts, in facilities operating under the kondo and mješoviti — condo and mixed — business models may be sold, in accordance with Articles 95, 96 and 97.
So selling a hotel room in Montenegro is prohibited unless the hotel qualifies for one of two named models. Everything else in this article follows from that sentence.
Which model a hotel can use is decided by stars, capacity and region
The two models are not interchangeable, and a developer does not choose freely between them. Article 95(1) and Article 96(1) set entry thresholds.
| Question | Kondo model (Art. 95) | Mixed model (Art. 96) |
|---|---|---|
| Minimum category, coast and Capital | Five stars | Five stars |
| Minimum category, north and central, excluding Capital | Four stars | Four stars |
| Minimum capacity, coast and Capital | Not set by the model | 120 accommodation units |
| Minimum capacity, north and central, excluding Capital | Not set by the model | 60 accommodation units |
| Hotel must be in function | 12 months | 12 months |
| Share of units that may be sold | Not capped by the model | 50% of total capacity |
| Raised cap for larger hotels | Not applicable | 60%, on the Art. 96(7) thresholds |
| Letting of the unit | Compulsory commercial use | Optional, on a voluntary basis |
Two lines in that table decide what you are actually buying.
Under Article 95(2), in a condo hotel the units "are the subject of individual sale and must be in commercial function at least ten months during the year". Letting is not an option you elect; it is a condition of the model.
Under Article 96(2), in a mixed hotel the units "may be the subject of individual sale with the possibility of optional letting on a voluntary basis". Article 96(3) adds that where you do let, it must be exclusively through the manager or the hotel operator running the hotel as a whole.
Same brochure language, entirely different legal position. The first question to ask about any Montenegrin hotel unit is therefore not the yield — it is which of Articles 95 and 96 the project is being built under.
Article 96(6) caps sold units at 50% of total capacity. Article 96(7) lifts that to 60% only for a five-star hotel of at least 240 units on the coast or in the Capital, or a four-star hotel of at least 120 units in the central and northern regions. A project promising to sell most of its inventory is telling you something about its own compliance.
What the deed covers, and what it does not
This is where buyer expectations and the statute part company hardest.
Article 95(3) and Article 96(4): the right of ownership may be acquired exclusively over the net area of the accommodation unit with its associated parking space.
Article 95(4) and Article 96(5): the common parts of the hotel cannot be the subject of sale.
Article 96a then spells out what the sale contract may contain: only the purchase of the net area with parking, without the right to purchase common premises and complementary facilities; the price; and a right of use over those common premises and complementary facilities. Its closing paragraph is explicit that ownership cannot be acquired over common premises and complementary facilities.
Read plainly: the pool, the spa, the restaurant and the lobby are not partly yours. You hold a contractual right to use them, defined by a contract that also defines what the operator may charge for them. In an ordinary residential building you would own an undivided share of the common parts. Here you do not — and the difference shows up when facilities are altered, restricted or repriced.
The registration sequence: an annotation now, title later
Off-plan buyers should read this section twice.
Article 95(5) and Article 96(8): the units are entered individually in the real estate cadastre with a burden that the unit is managed by the manager in accordance with the Act. The management obligation is not merely contractual; it is registered against the property.
Article 95(6) and Article 96(9): on the basis of the sale contract, an annotation (zabilježba) of that contract is registered.
Article 95(7) and Article 96(10): registration of ownership of the accommodation units in the cadastre is carried out after the approval for performing hospitality activity has been obtained and the hotel category has been assigned.
So the sequence is: you sign, an annotation goes on the record, and your ownership is registered only once the hotel itself is licensed and categorised. Between those two moments you hold a contractual position and a recorded annotation, not title. If the building never obtains its approval or fails to reach the required category, the registration step that converts your contract into ownership does not arrive. That is a construction and licensing risk sitting inside what is sold as a property purchase — and it is the same class of risk examined at development level in our Queen's Beach condo hotel file and the Meljine title and conversion review.
Three contracts, signed in a fixed order, or void
Article 96a requires management and maintenance to run on three instruments: the sale contract, the management and maintenance contract, and the letting contract.
Article 97(1) requires the management and maintenance contract to be signed simultaneously with the sale contract. Article 97(2) then lists what it must regulate — among them the opening and business plans; the duration and termination of operations; the approval and the category of the facility; management, maintenance and brand-use fees; guarantees and security; reporting to owners; and, expressly, bankruptcy, insolvency, compulsory administration or appointment of a receiver. Article 97(2)(3) obliges the manager to keep the hotel equipped and maintained so it meets the assigned category for the whole contract term, and to provide services on the same terms to all users.
Article 97(4) sets out the letting contract between the unit owner and the operator, including how the unit is let, the record-keeping and reporting on average occupancy and average rent, annual and seasonal reports, taxes and charges, and term and termination.
Then Article 97(6): a sale contract, management and maintenance contract or letting contract in a condo or mixed hotel concluded contrary to this Act is null and void. There is no fine here and no discretion — the sanction is civil nullity. That is why the drafting of these three documents is the transaction, not paperwork around it.
The two numbers the statute takes out of the developer's hands
For condo hotels specifically, Article 97(5) adds mandatory content that most buyers never see quantified.
| What is fixed | By whom | Provision |
|---|---|---|
| Owner's minimum share of the return | The statute, not the contract | Art. 97(5)(1) |
| Months the unit must be commercially available | At least ten | Art. 97(5)(2) |
| Owner's own use, maximum continuous | 15 days | Art. 97(5)(2) |
| Owner's own use, monthly maximum | 10 days | Art. 97(5)(2) |
| Deadline to conclude the annual owner contract | 31 January for the current year | Art. 97(5)(3) |
| Everything else, including fee levels | The contract | Art. 97(2) |
Article 97(5)(1) gives the unit owner a right to compensation determined on the basis of the percentage of average rent and average occupancy of the same type of units operating across the whole hotel, for the period the unit is in commercial function, and that compensation may not be lower than 10% of that amount. It is a floor, not a yield, and it is calculated off hotel-wide performance for comparable units — which is precisely why Article 97(4)'s reporting obligations matter.
Article 97(5)(2) is the ceiling on your own use: the contract must specify a period of at least ten months in commercial function, and outside commercial function the unit may be unavailable for at most 15 consecutive days, or ten days per month. A condo unit is not a holiday home that happens to earn income between visits. The statute says so.
The category is a three-year decision, not a permanent badge
Because both models are built on a minimum star rating, the categorisation regime is load-bearing.
Article 84 provides that hospitality facilities are categorised by the award of stars, to a maximum of five. For hotels, the category is determined by decision of the Ministry on the caterer's request (Art. 84(7)); the request must be filed within five days of obtaining the approval for performing hospitality activity (Art. 84(8)); the decision is issued within 15 days of a complete request (Art. 84(11)); and it is issued for a period of three years (Art. 84(12)).
Three years is the number to note. Both models exist only for hotels at or above a stated category, so a category that lapses or is reduced after inspection removes the statutory footing the whole ownership structure stands on. Article 97(2)(3)'s obligation on the manager to maintain the assigned category throughout the contract term is the contractual answer, and it is worth checking your management contract actually contains it.
Converting an existing hotel is almost closed
Article 99 allows hotels that already hold an approval to change to the condo or mixed model only in the case of reconstruction of an existing one-star or two-star hotel, in order to raise the category to at least four stars in the northern and central regions excluding the Capital, or at least five stars on the coast and in the Capital.
That is narrow by design. An existing three-star hotel cannot convert. If a project is presented as an operating hotel being "converted to condo", the first document to ask for is evidence of its category before reconstruction.
Who carries the liability once the units are sold
Article 72(4) places a continuing duty on the owners of a facility containing sold units: they must ensure the maintenance and use of the accommodation units, of all parts of the facility and of the land on which it is built, so that the conditions for performing hospitality activity under the approval and the assigned category are met. Failure is a misdemeanour under Article 127(1)(6), punishable by €2,000 to €20,000 for a legal person.
Upstream, Article 73(1) bars a caterer from starting the activity, changing the conditions of the activity or extending the scope of business without the approval or a decision on entry in the Central Tourist Register. Article 74(1) conditions that approval on registration in the company register for hospitality activity, ownership or lease of a facility meeting the Article 79 conditions, and an employed manager meeting Article 83. And Article 95(11) and Article 96(14) require the Article 97 contracts to be filed with that approval application — which means the state sees your contract architecture before the hotel opens.
For resorts, Article 98 requires a site of 5 to 150 hectares containing at least one hotel of 120 units at five stars on the coast and in the Capital, or 60 units at four stars elsewhere, built in phases with the hotel mandatory first; Article 98(6) applies Articles 96, 96a and 97 to resort units. The village-scale version is examined in our Luštica Bay marina village guide, and the maritime-domain layer governing the waterfront in the Verige and Kostanjica morsko dobro guide.
What is changing, and what we could not verify
The Act read for this piece is the Zakon o turizmu i ugostiteljstvu, Službeni list Crne Gore nos. 002/18, 004/18, 013/18, 025/19, 067/19, 076/20, 130/21 (Constitutional Court decision U-I no. 27/19 of 30 September 2021) and 084/24, in the consolidated text current to the 2025 edition.
A replacement is in progress. Public consultation on a draft ran from 10 June 2025 and was extended to 31 July 2025; the Government's press release on its 131st session, published 18 June 2026, records the Proposal of the Law on Tourism and Hospitality with the public-consultation report going to Parliament. As at 26 August 2026 we found no publication of a replacement Act in the Official Gazette, and we have not read the Proposal's text — so we attribute no change to it and state no future thresholds. If you are structuring a project now, that pending bill is a reason to date every assumption, not a reason to wait.
Two smaller notes. Article 74(1) refers to registration in the CRPS; the company registry has since moved, and the register that answers today is the Tax Administration's system rather than the old CRPS address. And tax treatment and state incentives are deliberately not covered here — those sit in our tourism development and state incentives article, and the vehicle question in personal name or company.
Before you sign a reservation on a hotel unit
Five documents settle most of this and all five exist before you sign: the approval for performing hospitality activity, the categorisation decision with its date, the draft management and maintenance contract, the draft letting contract, and the cadastre extract for the unit and the plot.
Read them against three questions. Which model — Article 95 or Article 96 — is this project in, and does it meet that model's thresholds? Does the sale contract stay within Article 96a, or does it purport to sell you something in the common parts? And does the management contract carry the Article 97(5) minimum, the ten-month commercial period and the Article 97(2)(3) category obligation?
Send us the contract pack and the cadastre extract before you sign a reservation, and we will tell you which model the project is in, whether the documents survive Article 97(6), and what is missing. This work sits in our hotel investment practice, alongside construction advisory and company formation where the buyer is a corporate vehicle. The permitting chain behind the building itself is set out in our building permit process guide.
