A house on the Montenegrin coast advertised well below the neighbouring asking prices is usually neither a bargain nor a fraud. It is a building whose legal status carries a price, and the seller has decided not to pay it. The question for a buyer is never whether the discount is real — it is whether the discount is larger than the fee stack, the annual holding charge, the delay and the waiver that come attached to the building, and whether the building can be brought into legal circulation at all.
Montenegrin law answers most of that arithmetic explicitly. The Zakon o legalizaciji bespravnih objekata (Law on Legalization of Unpermitted Buildings), Službeni list Crne Gore no. 91/2025, published 6 August 2025 and in force 14 August 2025, sets out who pays, what they pay, over how long, and what they give up in return. This page reads that law from the buyer's side of the table.
Currency note: the statutory text below was checked against the consolidated edition of Law 91/2025 published by the Podgorica Secretariat for Spatial Planning and Urban Development, read on 18 August 2026. Law 91/2025 has since been amended twice — by Sl. list CG 18/2026, published and in force 13 February 2026, and by a further amending law published in August 2026. Freely available consolidations lag behind those amendments, so anything time-critical should be checked against the current gazette text before you rely on it.
"Illegal" is six different problems, not one
The single word an agent uses — bespravno, unpermitted — covers situations with very different costs. Article 2 defines the unpermitted building as one built, reconstructed, extended or superstructured without a building permit or other act permitting construction, or contrary to that act. Article 2(2) adds the case buyers most often misread: where a building has a permit but exceeds the area set by the urban-technical conditions or the permit, it is only the excess that is unpermitted. The rest of the property is unaffected.
| What you are actually buying | Statutory hook | Can it be legalised? | Where the cost lands |
|---|---|---|---|
| No building act at all, visible on the July 2025 imagery, registered in the cadastre | Art. 2(1), Art. 6 | Yes, if all five general conditions are met | Full fee stack, on whoever owns it at the time |
| Permit exists, but built larger than permitted | Art. 2(2) | Yes, for the excess only | Fees calculated on the excess area |
| Built under a permit, no use permit yet | Outside Law 91/2025; Art. 51 annotation trigger | Not a legalisation case — a completion case | Delay, plus a disposal-annotation risk |
| Structurally unsound as built | Art. 8, Art. 17, Art. 18 | Only after reconstruction, within three years | Reconstruction works, at the owner's cost |
| Ownership of building or land unresolved, or in court | Art. 6, Art. 8, Art. 16 | Not while a dispute is pending | Litigation risk, and no lawful route to transfer |
| Not recorded on the July 2025 imagery | Art. 7, Art. 48(3) | No — and it cannot even be registered | Loss of the building's transferable value |
The last row is the one that ends negotiations. Article 7 fixes the evidentiary baseline as the satellite and aerophotogrammetric image of Montenegro made in July 2025, published on the Ministry's Geoportal. Article 48(3) then prohibits registration in the cadastre of an unpermitted building that does not appear on that image, and Article 48(4) obliges the Cadastre, where such a building has already been registered, to annul both the registration decision and the technical certification of the survey report. A cadastre entry is not, by itself, proof that the building has a future.
One qualification belongs here. The February 2026 amending law was reported to introduce a route to establish that a building existed before July 2025 where it is obscured on the imagery — by vegetation or another obstruction — on expert evidence. Where the building you are looking at is not plainly visible on the Geoportal, that point should be checked against the current text rather than assumed either way.
What the annotations on the title sheet mean, and how they are cleared, is covered separately in our guide to reading a Montenegrin title extract and in what the notary checks on a purchase.
The fee stack, and who ends up paying it
Article 12(10) is short and decisive: the costs of legalisation are borne by the owner of the building. If the seller has not legalised, the buyer becomes that owner. The stack has three statutory layers.
| Charge | Basis | Who sets the amount | How it is paid |
|---|---|---|---|
| Urban-sanitation fee (naknada za urbanu sanaciju) | Art. 23 | Municipal assembly, with prior Government consent — Art. 23(13) | Max 120 monthly instalments; 360 for basic-housing buildings — Art. 23(11) |
| Special coastal fee (posebna naknada) | Art. 25 | Law on regional water supply of the Montenegrin coast | Max 36 equal monthly instalments |
| Annual fee for use of space | Art. 26 | Municipal assembly, with prior Ministry consent — Art. 26(7) | Annually, until the building is legalised or removed |
The urban-sanitation fee is calculated per square metre of net area, on the basis of the surveyed as-built report certified by the Cadastre (Article 23(10)), and its level turns on zone, degree of servicing, average equipping costs, type, purpose and age of the building (Article 23(5)). Revenue is split 80% to the municipality and 20% to the state, except in northern-region municipalities, where it is entirely local (Article 23(1)).
Two figures in Article 23 are fixed by the statute rather than by a municipality, and both matter to foreign buyers.
First, for a hotel, a four- or five-star tourist settlement, or a tourist resort, the fee is €400 to €800 per square metre of built space, payable in one sum or in at most 60 monthly instalments (Article 23(12)). Anyone buying a unit in an unlegalised aparthotel or condo-hotel should price that band before agreeing anything else.
Second, the reductions in Article 23(6) — up to 50% for a basic-housing building, up to 90% for the listed vulnerable categories, up to 20% for payment in one sum — cannot be combined (Article 23(7)), and the first two attach to the personal circumstances of the owner, not to the building. Article 10 defines a basic-housing building by reference to the owner and their household living in it, holding residence in that place, and owning no other dwelling in Montenegro. A non-resident purchaser will not meet that definition. A reduction visible in the seller's calculation is not necessarily available in yours.
Municipal rates are published, and they vary widely. In July 2026 the inland municipality of Danilovgrad put out for consultation a draft decision proposing €65 per m² in Zone I down to €10 per m² in Zone VI. That was a draft in one municipality, not a national rate — but it shows the order of magnitude, and it shows where to look: the applicable figure sits in the municipal decision for the specific zone, never in the law.
The meter that runs while nothing happens
The charge most often missing from a buyer's spreadsheet is Article 26. Until the building is legalised or removed, the owner of an unpermitted building pays an annual fee for use of space in four situations: no legalisation request has been filed, the request was refused, cadastre registration was never initiated, or a removal decision has been issued.
The rate is a percentage of the average construction price per square metre of a newly built residential building in Montenegro, as published by the statistics authority for the preceding year:
- 0.5% to 2.0% per m² of net area, where the surveyed as-built report has been delivered (Article 26(2));
- 1% to 3% per m² of gross area, where it has not been delivered or the building is not registered in the cadastre (Article 26(3)).
To see what that means in money, take the construction-cost component of MONSTAT's new-build apartment price release. For Q4 2025 it stands at €1,724 per m² nationally and €2,081 per m² in the coastal region. On the coastal figure, the lower band runs from roughly €10 to €42 per m² per year, and the higher band from roughly €21 to €62. For a 150 m² house that is about €1,560 to €6,240 a year on the lower band — and materially more on the higher one, which is also applied to gross rather than net area. The statute points the municipality to the annual figure for the preceding year, so the base moves from year to year; the structure does not.
Two features make this charge sharper than it first looks. It is not suspended by inactivity: Article 31(5) confirms that issuing a removal decision does not affect the obligation to assess and collect property tax and the Article 26 fee. And it stops only on a defined event — Article 29(1) ends the obligation on the date the legalisation decision becomes final. A property held for three years in an unresolved state accrues three years of it.
The three costs that are not money
A waiver of your right to sue. Under Article 12(8), the legalisation decision records that the owner has delivered a certified statement waiving the right to bring court proceedings against the state, the municipality, or a company providing services of public interest, on any ground connected with the legalisation and the use of the legalised building. Article 15(1)(5) makes that statement part of the file, and Article 21(1)(3) puts it on the title sheet. A legalised building therefore arrives with a permanent limitation on remedies — worth close reading where infrastructure, access or utility connection is part of what you are paying for.
A structure that carries no independent engineering report. Stability is tested by a licensed entity under Article 17, and above 500 m² the report must be reviewed by a licensed reviewer (Article 15(1)(7)–(8)). But Article 15(2) allows a basic-housing building, an auxiliary building, or a residential building of up to 200 m² net with at most two storeys and no business activity to submit, instead of that analysis, a certified statement by the owner accepting liability for damage caused to third parties by use of the building. The authority still has to satisfy itself under Article 8(2), through the on-site inspection and mixed-profession commission that Article 14 requires. What the file will not contain is an independent stability analysis by a licensed engineering firm — and Article 21(1)(2) records the owner's liability statement on the title. For a buyer of a smaller coastal house, an independent structural survey is not optional diligence; it is the only engineering opinion there will be.
Land you may not own yet. Where the building stands on state or municipal land, Article 20 provides for purchase by direct settlement, payable in up to 360 monthly instalments for basic-housing buildings and up to 120 for others. Until the price is paid in full, the Cadastre enters a pre-notation (predbilježba) rather than a full registration (Article 20(9)–(11)). A seller who describes the land as "bought from the municipality" may hold a pre-notation with an instalment balance outstanding — and Article 21(1)(4) puts the payment arrangements for the fees on the title sheet as well. The instalment plan is visible. It is worth looking for.
When the building cannot be legalised at all
Article 8 excludes temporary buildings, buildings constructed in a manner and from materials that do not ensure stability, functionality, durability and safety of use, and buildings that are the subject of court proceedings. Where stability can be restored, Article 18 suspends the procedure until reconstruction is complete — for at most three years from delivery of the suspension decision, and only within the building's existing envelope. Miss that window and Article 22 requires refusal, and the refusal goes to the spatial-protection inspector within eight days for a removal decision under Article 31.
The historical record is a reason for caution about "we will legalise it after completion". Under the previous, now-repealed regime, the ministry directorate responsible for housing development and legalisation reported in October 2022 that of roughly 56,353 legalisation requests filed since 2017, only 2,722 decisions had been issued — with supplementation sought in some 38,000 files and more than 8,000 procedures suspended. Law 91/2025 was written to fix that record; it has not yet had time to prove that it has. A timetable that depends on a legalisation decision arriving by a particular date is built on someone else's throughput.
What belongs in the contract before any money moves
None of this argues against buying an unlegalised property. It argues for pricing it, and for structuring the purchase so that the risk sits with the party that created it. In practice that means:
- Condition the money, not just the closing. Make payment of the balance conditional on the legalisation decision becoming final and on the Cadastre deleting the relevant annotations — not on the decision alone.
- Allocate the fee stack expressly. State who pays the urban-sanitation fee, the coastal special fee and any accrued annual fee for use of space, and who carries an instalment balance already annotated on the title.
- Deal with the survey report. The application cannot proceed without a certified as-built survey report. Agree who commissions it, who pays for it, and what follows if the surveyed area differs from what was advertised.
- Set a long-stop date. Article 18's three-year reconstruction window, and the general pace of these procedures, both argue for an outside date after which you can withdraw and recover what you have paid.
- Verify the imagery point first. Confirm the building appears on the July 2025 imagery before anything else. If it does not, Articles 48(3) and 48(4) make the rest of the negotiation academic.
If you are looking at a Montenegrin property whose papers mention legalizacija, an unpermitted building, or a missing use permit, send us the title extract and the draft contract before you sign anything or pay a deposit. Our Montenegro construction advisory work covers this kind of review, and you can reach us through the contact page. Related reading: the four legal risk layers in an old stone house and construction permits and development in Montenegro.
