Amendments to Law on Real Estate Brokerage in Montenegro – Additional time or room for illegal agents?

Companies and agencies could be given another year, or until August 2027, to align their operations with the Law on Brokerage in the Sale and Lease of Real Estate, i.e. additional time to register in the register of brokers, to have at least one licensed employee with a separate work space, professional liability insurance contracts...

This is the new feature brought by the amendment to this Law, which was submitted to the parliamentary procedure in early June by the MP of the Europe Now Movement Nadja Lakovic.

The Association of Real Estate Agencies told “Vijesti” that they were against the extension because they believed that it was in favor of illegal brokers, while the Ministry of Economic Development and the Chamber of Commerce supported the postponement of the full implementation of the law.

The Parliament adopted the basic Law at the end of July last year, and it entered into force last year at the beginning of August. The government planned to reduce the shadow economy in real estate transactions with it, because the state lost a significant amount of money from undeclared commissions, and intermediaries worked according to different standards, which created problems for citizens and buyers.

The most important items of this law are the introduction of a register in which all agents will be registered, and in parallel, those who do these jobs will be required to have passed a professional exam. The law plans to give companies and agencies in this sector a year to harmonize their work with the new regulations, i.e. until the beginning of August this year.

The announced extension of the deadline until summer 2027 is still worrying the Association of Real Estate Agencies of Montenegro, because they believe that the implementation of the law itself is being postponed. They announced in mid-June that the regulation should regulate the market, but that the additional time worked to the benefit of illegal and unregistered intermediaries who endangered legal business, caused damage to the state through tax evasion and undermined the trust of citizens and investors.

“Vijesti” asked the competent Ministry of Economic Development and the Chamber of Commerce (PKCG) about the risks and reasons for the extension of this deadline, while the two institutions provided identical answers.

“It is important to emphasize that this does not delay the implementation of the Law nor does it abandon its basic goals. On the contrary, the goal remains the same - combating the shadow economy, improving professional standards and establishing a regulated and transparent market for real estate brokerage and leasing. The extension of the deadline for harmonization is a mechanism that enables all interested parties to fulfill their legal obligations and engage in legal business processes under equal conditions. A significant number of candidates are expected to apply, which is why, in communication with the Ministry of Economic Development, it was assessed that additional time should be provided so that all interested parties have a realistic opportunity to pass the professional exam and obtain a license in accordance with the law,” the Ministry and the Chamber of Commerce and Industry of Montenegro emphasized in their responses.

150 euros for the exam

The two institutions emphasized that the PKCG was authorized to organize and conduct the professional exam for performing the activity of mediation in the sale and lease of real estate, while the Ministry of Economy had adopted bylaws regulating the measures. They also emphasize that the PKCG has created all the necessary conditions for taking professional exams.

They emphasized that according to information from companies engaged in mediation, there was great interest in taking the exam and obtaining a license to perform these activities, which is why an amendment to the Law had been proposed to extend the deadline for compliance for another year.

“We believe that this is a justified and responsible solution that will enable high-quality and complete implementation of legal provisions, taking into account the scope of interest and the number of candidates expected in the upcoming period. PKCG is ready to organize professional exams. The interested public will be informed in a timely manner about the dates of the first exam period. The price of taking the professional exam is 150 euros per candidate for each exam period. Also, we have not had any complaints from business entities about the proposed extension of the deadline for harmonization. On the contrary, communication with representatives of the economy has recognized the need to provide sufficient time so that all interested candidates can take the professional exam and obtain a license in accordance with legal requirements – emphasized the Ministry and PKCG.

This position is not shared by the Association of Real Estate Agencies of Montenegro, but they emphasize that the adoption of the Law was an important step towards regulating the market in which there has been a shadow economy and unfair competition for years, and that the measure was adopted after many years of work, dialogue and cooperation between the profession, PKCG and institutions.

They would accept a shorter transition period

The Association says they expect all institutions, MPs and decision-makers to consider the consequences of a possible delay of this law and to protect the interests of those who work legally, legal certainty and the credibility of those who participated in the formation of the regulations.

“Of particular concern is the fact that a possible additional delay in the implementation of the law would directly benefit illegal intermediaries and unregistered entities that have been seriously jeopardizing legal business in Montenegro for many years, causing damage to the state through evasion of tax and other legal obligations, but also eroding the trust of citizens and investors in the real estate market. We believe that possible technical challenges related to the organization of professional exams or the completion of certain administrative procedures can in no way be a justification for a new one-year delay in the implementation of the law. If there is a need for additional time adjustments for certain technical procedures, we believe that a reasonable and justified deadline could only be a shorter transitional period, and not another 12 months of prolonging the process that has been going on for six years,” says the Association, which, as they claim, consists of more than 70 registered companies in the field of real estate brokerage and leasing.

They state that this market is already facing challenges posed by the Law on Legalization of Illegal Buildings, the Law on Foreigners and the Law on the Prevention of Money Laundering and Financing of Terrorism, the refusal of banks to open accounts for non-residents, moratoriums on construction and the suspension of issuing legalization decisions until the adoption of a management plan in Kotor, Tivat and Herceg Novi, international circumstances that have reduced interest from foreign investors...

They emphasize that the decline in foreign direct investment and investments in the real estate sector is already visible in the first months of this year, so Montenegro needs legal certainty, predictability and clear business rules - not an extension of deadlines for reforms. They added that the Association remains open to dialogue and cooperation with institutions for the implementation of the Law, but that they believe that a one-year delay in implementation is neither justified nor responsible.

Fines of up to 20,000 euros

The implementation of the Law will be supervised by the Ministry of Economic Development, i.e. the Market Inspection, so intermediaries will have to report all changes in the register within 15 days, determine and state the terms of business and keep records of the signed contracts.

If they fail to do so, fines for companies range from one thousand to 4,000 euros, for entrepreneurs from 500 to 2,000 euros, while those responsible for these omissions in companies will pay 500 to 1,000 euros.

Companies will pay from 4,000 to 20,000 euros for violations, i.e. work without registration in the register, entrepreneurs from 2,000 to 6,000 euros, while citizens and responsible persons in companies will pay 1,000 to 2,000 euros for these violations. In addition to these fines, a work ban for a period of one to six months may be imposed.

“A company will be fined 1,000 to 6,000 euros if it employs a person for brokerage work who has not passed a professional exam, fails to conclude a brokerage contract, fails to publish information about the location, area and structure of real estate when publishing an advertisement related to the sale, or publishes an advertisement without a brokerage contract,” the Law states.

For these violations, entrepreneurs will pay fines of 500 to 2,000 euros, and those responsible in the company will pay fines of 500 to 1,000 euros, while entrepreneurs and companies may also be banned from working for one to three months.

Ministry of Economic Development

Chamber of Commerce of Montenegro

PKCG

Association of Real Estate Agencies

Nađa Laković

amendments to the Law on Brokerage in the Sale and Lease of Real Estate

Law on Brokerage in the Sale and Lease of Real Estate of Montenegro

illegal agents

real estate market