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Land law categorization in Serbia & Construction procedure – key points

Serbian legal framework recognizes two land categories most commonly used for investment purposes.

Construction land

It is the land on which structures have been built as well as the land that serves for regular use of the land that serves for regular use of these structures and the land designated for construction and regular use of structures envisaged by the urban plan.

Construction land can be:
– public construction land ( in state-municipality ownership)
– other construction land ( in all ownership forms – private and state)

Agricultural land ( in all ownership forms – private and state owned)
– cultivable land
– uncultivable land

Characteristics of public construction land
Public construction land has the following characteristics:
– it is state owned
– it covers land area where structures of public interest have been constructed
– it is a land area designated for construction of public structures, as well as public areas (public roads, parks, squares, streets etc) according to the Urban plan
Public construction plan is exclusively state property and as such is solely intended for construction of structures of public interest ( roads, schools, hospitals, infracture)

Other construction land is land where structures already exist, as well as land predefined for construction of structures. It is previously not declared as public construction land. It is transferable and can be found in all types of ownerships. The municipality is responsible for rational use of other construction land. The structures which can be built on other construction land are: residential, commercial, industrial, etc. This classification is in accordance with the Urban municipality plan.
There are three ways of acquiring other construction land ( OCL) for construction

By leasing the land
OCL in state ownership – municipality land can be leased for 99 years under conditions set my municipal authorities. The land is leased through either public bidding or public tender. The lessee automatically obtains a right to build structures.
Once he has the structures built on the land previously acquired he becomes owner of a built structure, and is obliged to use the land according to its designated purpose.

Acquiring a ‘right to use’ the land
The right to use the land granted for indefinite period of time by the newly adopted Law on Urban planning and construction. The right use to use the land is irrevocable and permanently attached to the ownership of the structure located on a particular land lot. It is based on either:
– ownership of a structure built on the land in accordance with the Urban plan ( in which case the land has the same status as the structure)
– intention to construct a building on urban land. Right to use the land is related to the ownership of the structure located on the urban plan. It entitles the user to permanently use the land as long as the previously acquired structure remains on the land acquired.

By acquiring OCL through conversion of agricultural land into construction land
By acquiring agricultural land in private ownership with a possibility of conversion into construction land and investor automatically obtains the right to build a structure on it according to the Urban plan. Only agricultural land which is included in Urban plan can be reclassified to OCL.
For the conversion of agricultural into OCL land an investor must submit a formal application which includes:
– description of the current and intended use of land in question
– a certificate of owner or the right to use papers
– an extract from Urban plan which provides grounds for obtaining a building permit

Construction procedure

  • 1. Assessment of urban conditions for construction
    – excerpt from Urban plan or Act of urban conditions, not older than 6 months

  • 2. Obtaining land
    – leasing land – municipally owned
    – buying private building with the right of use the land for building new structure according to Urban plan
    – buying agricultural land with the possibility of conversion
  • 3. Construction approval
    – conceptual project – preliminary architectural design
    – proof of ownership, leasing or right of use the land
    – excerpt from Urban plan or act on zoning conditions
    – validity of the construction approval is 2 years from obtaining
  • 4. Notice of the start of construction
    – Investor submits the main project with the confirmation of payments of compensations for the development for the development of the construction land and other administrative fees
  • 5. Construction
    – preparing construction documents
    – the investor provides expert supervision
  • 6. Technical inspection of a structure
    – assessment of compliance of the construction works with construction approval and technical documentation
  • 7. Occupancy permit
    – as-built drawings
    – technical inspection of the structure

Construction approval can be obtained now very easy considering the tendency to simplify the construction procedure, Urban permits and building permits have been abolished and replaced with construction approval. Prior to construction of structure a potential investor is obliged to obtain the construction approval and prepare technical documentation for the construction.

More on sector news and regulations proceed to section Market news.

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