When a hotel owner in Montenegro signs with an international brand, it is easy to assume the document is a purely commercial instrument — a negotiation about fees, term and performance tests, governed by whatever law the parties choose. It is not only that. 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 and 084/24) names the parties, prescribes what the contract must regulate, and attaches a single blunt sanction where it is not followed.
The starting point is that Montenegrin law does not treat "the operator" as one thing. It defines two.
The manager and the brand are different legal persons
Article 4(42) defines the *upravljač, expressly glossed as the management company: a company or other legal person that manages and maintains hotels and other primary hospitality facilities in their entirety. The words "in their entirety" (u cjelosti*) matter — this is not a role you can split across a facilities contractor, a rental agent and a front-office provider.
Article 4(3) defines the *hotelski operator, and defines it by brand: a legal person under whose brand the hospitality facility operates*.
Article 97(3) then joins them: the upravljač may, by contract, entrust the management of a condo or mixed-model hotel and of a tourist resort to a "renomirani" hotel operator — a renowned hotel operator.
| Question | Upravljač (management company) | Hotelski operator |
|---|---|---|
| Statutory definition | Art. 4(42) | Art. 4(3) |
| Defined by | Managing and maintaining the facility in its entirety | The brand under which the facility operates |
| Legal form required | Company or other legal person | Legal person |
| Named in the cadastre burden on sold units | Yes, as the manager of the unit | No |
| May the role be delegated | Yes, to a renowned operator under Art. 97(3) | Not addressed |
| Carries the category obligation under the contract | Yes, Art. 97(2)(3) | Only if it is also the manager |
That structure has a practical consequence most term sheets do not reflect. The statutory counterparty carrying the management and maintenance obligation is the upravljač. The brand may sit above it under a separate arrangement. If your documents name only the international brand and no upravljač, or name an upravljač that plainly does not manage and maintain the hotel in its entirety, the structure does not match the statute it is being built under.
One honest caveat: the Act does not define "renomirani". It sets no track record, portfolio size or rating test. We found no definition in the Act and state none here.
The statute writes fourteen heads of your management contract
Article 97(1) requires the management and maintenance contract to be signed simultaneously with the sale contract where units are sold. Article 97(2) then sets out what it must regulate. This is not guidance; it is mandatory content.
| Mandatory head | The commercial question it decides | Provision |
|---|---|---|
| Construction, equipping, opening and business plans | Who signs off the opening standard and the budget behind it | Art. 97(2)(1) |
| Duration of operational work, extension, cessation and termination | The term, and every exit route | Art. 97(2)(1) |
| Manner of work and management of the hotel | Operational control, and its limits | Art. 97(2)(1) |
| Approval for work and the category of the facility | Who is answerable for the star rating | Art. 97(2)(1) |
| Fees for management, maintenance, brand use and other fees | The full fee stack, brand fee included | Art. 97(2)(1) |
| Insurance and compensation for damage | Who insures, and to what limit | Art. 97(2)(1) |
| Non-performance of works | The failure regime | Art. 97(2)(1) |
| Manager's rights and duties on operation and functionality | The performance obligation itself | Art. 97(2)(1) |
| Current and investment maintenance | Who funds capex versus opex | Art. 97(2)(1) |
| Liability for damage caused and repairs | Where operational loss lands | Art. 97(2)(1) |
| Types and forms of guarantees and security | What secures the manager's promises | Art. 97(2)(1) |
| Hotel house rules | The standard imposed on users | Art. 97(2)(1) |
| Communication, reporting and informing owner and manager | The information right | Art. 97(2)(1) |
| Bankruptcy, insolvency, compulsory administration, receivership | What happens when a party fails | Art. 97(2)(1) |
Two of these deserve separate treatment, because they are where owner and operator interests genuinely diverge.
Article 97(2)(3) places on the manager the obligation to keep the hotel functional, managed, maintained and equipped so as to meet the conditions for the assigned category throughout the term of the contract, and — expressly — to provide services on the same terms to all users. That second limb is easy to skim past and hard to live with: it constrains preferential treatment between categories of user.
Article 97(2)(2) requires the contract to regulate the rights and obligations of unit owners over the common premises and other facilities, where units have been sold.
The category obligation sits with the manager; the fine lands on the owner
This is the mismatch to price into the fee negotiation.
The category is not permanent. Article 84(12) provides that the categorisation decision is issued for a period of three years, and for hotels it is the Ministry that decides, under Article 84(7), on a request filed within five days of the operating approval (Art. 84(8)) and determined within 15 days (Art. 84(11)).
The contractual obligation to maintain the conditions for that category, for the whole term, is the manager's under Article 97(2)(3). But the misdemeanour liability runs elsewhere. Article 72(4) obliges the owners of a facility containing sold units to ensure the maintenance and use of the units, of all parts of the facility and of the land, so that the conditions for performing the hospitality activity under the approval and the assigned category continue to be met — and Article 127(1)(6) makes failure a misdemeanour punishable by €2,000 to €20,000 for a legal person.
So the statute puts the doing on the manager and part of the answering on the owner. An owner that has not secured a contractual indemnity, step-in right or category-linked termination trigger against the Article 97(2)(3) obligation is carrying a regulatory exposure it cannot discharge itself. The point is sharper still where the hotel was built to reach a category it must now hold: the condo and mixed models exist only above a stated star rating, so a category that slips does not merely trigger a fine — it removes the statutory footing of the ownership structure itself, as set out in our tourism incentives guide, where the same star threshold decides the building-fee position.
Brand and intellectual property are contract heads, not assumptions
The Act treats the brand as a paid, licensed input rather than something that simply comes with the operator.
Article 97(2)(1) lists the fee for use of the brand among the fees the contract must regulate, alongside management and maintenance fees. Article 97(4) — governing the letting contract between a unit owner and the operator — requires it to contain the trade name of the hotel and the manner of use of the operator's trademark and intellectual property, along with the way international marketing, advertising and promotional services are provided, the manner of keeping records on economic and financial performance, reporting on average occupancy and average rent, annual and seasonal reports, assignment and transfer of rights and obligations, payment of taxes and charges, maintenance, term and termination, house rules, and the failure and legal-protection regime including insolvency.
What the Act does not do is tell you what happens to the name over the door when the agreement ends. It requires the parties to regulate termination and the manner of trademark use; it does not supply a de-branding regime, a transition period or a residual licence. That is a negotiated term, and its absence from the statute is a reason to draft it, not a reason to assume it.
The sanction is nullity, not a fine
Article 97(6) is short and absolute: a sale contract, a management and maintenance contract or a letting contract in a hotel operating under the condo or mixed model concluded contrary to this Act is null and void.
There is no administrative penalty attached to getting the contract architecture wrong, and no cure period. The consequence is civil: the instrument does not stand. For an owner, that is a more serious exposure than a fine, because it reaches the document the whole operation runs on — and, where units have been sold, the documents the buyers hold.
Article 96a completes the architecture by naming the three instruments that management and maintenance run on: the sale contract, the management and maintenance contract, and the letting contract. Where no units are sold, the second is the operative one; where units are sold, all three must be consistent, and the unit-buyer's side of that structure is set out in our guide to the two statutory hotel models.
Where the hotel is a resort, the same rules follow it
Article 98(6) applies Articles 96, 96a and 97 to the management and maintenance of a tourist resort and to the letting of units within it. Article 98(4) adds that a resort may include tourist villas managed by the same upravljač that manages the resort as a whole, using the resort's facilities. A resort does not get a lighter management regime for being larger; it gets the same one applied across more assets.
What we did not verify, and what is out of scope
The Act does not define "renomirani" for the purposes of Article 97(3), and we state no test for it. It does not fix management or brand fee levels, and neither do we — those are commercial. It does not prescribe a de-branding or transition regime on termination.
Performance tests, owner termination for underperformance, guaranteed operating results and non-disturbance arrangements are all matters the statute leaves to the parties under the Article 97(2) heads. Where an operator offers a guaranteed return to unit buyers rather than to the owner, that is a different instrument with its own problems, examined in our review of guaranteed rental yields.
This page was read against the consolidated text of the Zakon o turizmu i ugostiteljstvu covering the gazette numbers listed above, on 26 August 2026. A new Law on Tourism and Hospitality is before Parliament; nothing here anticipates it.
Before you sign with a brand
Four questions settle most of the legal risk, and all four are answered before signature. Which legal person is the upravljač under Article 4(42), and does it in fact manage and maintain the hotel in its entirety? Does the contract regulate every head in Article 97(2), including the ones nobody negotiates — house rules, guarantees, insolvency? Who bears the Article 72(4) exposure if the category slips, and what contractual mechanism transmits it to the party holding the Article 97(2)(3) obligation? And what happens to the brand, the trademark licence and the bookings on the day the agreement ends?
Send us the draft management agreement, the brand licence and the group structure before signature, and we will tell you which heads the statute requires you to regulate, where the draft leaves an Article 97(6) exposure, and which risks are still open to negotiation. This work sits in our hotel investment practice, alongside company formation where the owning vehicle is being set up, and connects to the construction contract that precedes the operating phase.
