On 26 November 2021, the National Assembly enacted the amendments to the Expropriation Act (“Amendments“), a legislation that originates from 1995 and has not been significantly updated since 2009.
A number of public intellectuals, NGOs and opposition parties have loudly criticized the Amendments. We outline below the most important changes.
Notion of public interest
By far the most controversial provision of the Amendments is the expansion of the notion of public interest. According to the Serbian Constitution, private property may be expropriated or limited only in public interest determined in accordance with the law and against a compensation which may not be below the market value. The notion of public interest is defined in Article 20 of the Expropriation Act, and has an interesting history.
Originally, “public interest” included the development of facilities in a number of sectors of public concern: education, health, social protection, culture, water management, sports, transport, energy and communal infrastructure, facilities for state and territorial autonomy and local self-government, facilities for the needs of the country’s defense, mineral resources, environmental protection, etc. In 2009, as part of the negotiations of the joint venture agreement between Republic of Serbia and FIAT, the scope of public interest was expanded to include expropriation of real estate which, according to a joint venture agreement concluded by the Republic of Serbia, is necessary to enable the Republic of Serbia to make its contribution in kind to the joint venture. Additionally, a series of special laws (e.g. the law on the Belgrade Waterfront project, the law on the extension of the Turk Stream gas pipeline through Serbia, and the law on special procedures for the development of infrastructural projects of national significance, etc.) have additionally expanded the scope of public interest to allow expropriation of real estate needed for the development of those specific (types of) projects.
The Amendments intend to foreclose the need for future special laws, by extending the notion of “public interest” to “projects for the development of buildings of importance or special importance to the Republic of Serbia that are implemented on the basis of an international treaty to which the Republic of Serbia is a party”. The concept of “projects for the development of buildings of (special) importance for the Republic of Serbia” is not defined in the Expropriation Act, as amended. According to the Planning and Construction Act, it is the executive, i.e. the Government of Serbia, which has the power to designate “projects for the development of buildings of importance to the Republic of Serbia”, without any further criteria being provided in the statute.
It remains to be seen whether the extension of the notion of public interest will be constitutionally challenged and whether it will survive such challenge.
Compensation for illegal buildings
According to the Amendments, if illegal buildings with respect to which the legalization process is still pending are subject to expropriation, the owner will be compensated for construction value of the building. As mentioned, the Serbian Constitution requires that compensation in case of expropriation be at market value. Market value can be, as a matter of principle, higher than construction value. However, illegal buildings are formally off the market until the legalization is positively resolved, so it is questionable whether in case of illegal buildings market value can be determined as anything but construction value.
Appointment of temporary representatives
Most of the changes introduced by the Amendments are aimed at shortening the deadlines and eradicating the roadblocks in the expropriation procedure. In that regard, the most significant amendment is the introduction of the possibility of appointing a temporary representative in those cases where the registered owner of the property being expropriated is a deceased and the probate proceedings have not been carried out. This has been so far one of the most common obstacles to the efficient conduct of expropriation procedure, while the general provision on temporary representative in the Administrative Procedure Act and the provision on temporary custodian for the Family Act were not sufficiently clear when applied to expropriation situations.
Maximum duration of temporary occupation extended
The period of temporary occupation, allowing the beneficiary of expropriation to temporarily occupy ancillary land needed in relation to the construction of facilities for which the public interest has been declared, may now be extended for additional three year period at the request of the beneficiary of expropriation.
