Important Legal Update for 2025
Montenegro has recently enforced new legislation in 2025, marking a significant change in the regulation and legalization of the real estate market. The main legal reform temporarily blocks the sale of unauthorized properties—estimated at up to 120,000 nationwide—until they undergo formal legalization. This measure, though disruptive in the short term, aims to eliminate the gray market, boost investor confidence, and ensure safer, more stable transactions for buyers and sellers.
Recent Legal Changes
The new law, effective since August 2025, makes it illegal to sell any real estate property that lacks proper building permits or exceeds planning permissions, regardless of its listing status in government records. Owners of such properties must follow a defined legalization procedure and submit the necessary documentation before regaining the right to sell or formalize ownership.
Short-term and Long-term Impact
Short-term: The market has experienced a practical freeze in transactions involving unauthorized properties, causing frustration for some agencies and individuals trying to sell real estate.
Long-term: The law is designed to improve land use, reduce illegal building, and enhance the legal protection of property rights. Ultimately, it is expected to create a more transparent, competitive, and investor-friendly real estate sector.
Strengthened Regulation of Agents and Transactions
Alongside the legalization framework, additional laws have been enacted to professionalize the industry:
Mandatory licensing and exams for agents.
A public registry of authorized agencies.
Requirements for liability insurance and brokerage contracts.
Hefty penalties for unregistered brokerage activity (up to €20,000 per entity).
Market Effects and Outlook
While agencies lament a slowdown and temporary loss of business from blocked sales, officials and stakeholders believe these measures are crucial for Montenegro's reputation as an investment destination, better aligning the country with EU standards and international best practices. The market is projected to stabilize and improve over the coming year, fostering legal clarity and consumer confidence.
