Member Article

On 8 December 2014, the Serbian Parliament passed the law on Amendments and Supplements to the Law on Planning and Construction (“the Law”). Here are some of the most important novelties:

• Conversion - The concept of conversion continues to exist under the term “transformation of right of use into the right of ownership of construction land”. The Law deliberately avoids regulating situations where the transformation of the right of use to the right of ownership is allowed for a fee, thus leaving this topic to be regulated by a separate law which is to be enacted within 6 months of the moment the Law enters into force. Notably, in the meantime, these entities to which conversion with compensation applies (e.g. privatised companies) may apply for construction permits on the basis of the right of use.
  
  

• One Stop Shop - The Law introduces a one stop shop concept for permitting through a “unified procedure” according to which the relevant authority (i.e. the ministry responsible for construction matters, the relevant authority of the autonomous province or of the local authority) shall designate a special internal body or service which will implement the unified procedure to issue the relevant permits, design and connection conditions etc. The investor does not need to present evidence from the state or other bodies. Instead, such evidence will be obtained and collected ex officio by the relevant authority which will issue the permits.
  
  

• The implementation of the unified procedure will be gradual, beginning on 1 March 2015 and should be fully implemented by 1 January 2016. The Law provides that the exchange of documents in the unified procedure will be performed electronically, however this provision will be implemented as of 1 January 2016. Until then, it will still be possible to exchange documents in their paper form. Furthermore, as of 1 January 2016, the relevant authority will still be required to maintain an electronic database that is publicly available and contains information on the progress of each case undergoing unified procedure, from applying for location conditions up to the issuance of the use permit, which shall contain all documents obtained and issued in this procedure.
  
  

• The introduction of a “One stop shop” in the field of obtaining permits for construction, together with defining rather short deadlines for the issuance of documents by public authorities is expected to significantly speed up the permitting process.
  
  

• City Land Development Fee - The fee for the development of construction land shall be replaced by the contribution for development of construction land. The maximum amount of the contribution will be limited to 15% of the average price of sqm of newly built flats in subject municipalities according to the latest published data of the republic statistics authority, multiplied with the total net surface in sqm of the facility which is to be constructed.
  
  

• Urban Planning – The Law recognises a lack of urban planning and allows for the possibility of construction on such locations on the basis of a document called Technical Conditions for Construction („Separat o tehničkim uslovima izgradnje“). This document may be prepared by the competent public authority when the planning document contains no conditions, or information required for drafting technical documentation. A similar concept existed under the former Law of 2003 and was known as the Urban Planning Act.
  
  

• Classification of buildings – The law further introduces the differentiation of facilities according to their class/type. According to the Law, the class represents a group of facilities or works, which are grouped according to common characteristics in terms of structural and technological complexity, environmental impact and purpose.
  
  

• Certain new rights of financing entities – The new term “Financier” has been introduced. This term is used to represent a person, who based on a verified contract with an investor, finances or co-finances construction. Based on this contract, the Financier acquires certain rights and obligations that are prescribed by Law for the investor in accordance with this contract. This contract does not include ownership rights to the constructed facility.
  
  

• Other – The amendments establish unity of real property. This means that following the finalisation of procedures to transform the of right of use to ownership rights of construction land, the cadastral lot of construction land together with the facilities built on it shall become a single property subject and all existing rights and encumbrances which existed on the facility or a separate part of the facility shall be also transferred to that cadastral lot (or part of cadastral lot), unless a long term lease is established on such land.
  
  

• Mandatory insurance against liability for damages caused to the other party or third parties has been introduced for the main participants in the development process: i.e. contractors, designers, entities who control technical documentation, perform professional supervision or technical inspection.
  
  

• The central register of planning documents shall be maintained by the competent authority for matters of state survey and cadastre instead of the competent ministry for spatial and urban planning.
  
  

• The Republic Agency for Spatial Planning is abolished and its competencies are transferred to the competent ministry for spatial planning; etc.