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NewsMontenegro, What if plots suitable for construction have more than one owner?

Montenegro, What if plots suitable for construction have more than one owner?

Bearing in mind the constant demand for apartments, plots suitable for construction can easily find a buyer today. An aggravating circumstance for the investor is when the plot has more than one owner. Practice shows that in such cases it is difficult to come to an agreement with all buyers, so investors avoid them.

Milić Đoković, appraiser and real estate expert, explains to Blic Biznis that when buying construction land, it is best for an investor to buy the whole, because if the plot has several owners and he has to buy part by part, it can cost him more money, but also lead to a series of problems.

– For the investor, it is very important that he buys the whole, and if the land has several owners, that they divide the amount among themselves according to the ownership structure. If the investor buys part by part, it turned out to be very inconvenient in practice. It happens that he first buys ¼ from one owner, and then the others blackmail him and their part has to pay more than what he paid to the first owner – says Đoković.

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The Interlocutor of Blic Biznis also cites an example from practice where an investor has been unable to start building a building in a very attractive location in Belgrade for years, because only one owner does not want to sell his part and this disputes the entire project.

– We have an example where a man bought land in parts, from each owner individually. The problem arose when one of them did not want to sell his share. The man is abroad, he has no interest in selling, but because of that the whole project has been standing for years and construction cannot begin. This is a very awkward situation for the investor, because he has already invested a lot in it. That’s why I advise everyone to avoid this – says Đoković.

Up to 30% of the built object to the owner

Although it is best for investors to pay for the selected land for construction immediately upon purchase, practice shows that when they are unable to do so, they opt for compensation, i.e. offer the owner of the plot a certain percentage of the built object.
Milić Đoković explains that this amount varies depending on the city and location.

– For medium-sized city locations, this amount is about 20% of the built-up area. For larger city locations, it is 25%, and for the extra zone, 30%. In smaller communities, that amount is much lower and ranges around 15%. When the plot has only one owner, the living space he gets is very satisfactory. However, if there are more of them, problems arise in most cases, because there are mostly bad relations between them and investors will not get involved – says Đoković.

Dejan Milenković, investor and contractor, shares a similar opinion. He explains to Blic Biznis that the reason why investors avoid this type of compensation with multiple owners is mainly because the percentage of square footage when dividing usually does not meet the expectations of all owners.

– The amount that the investor pays to the owner in that compensation is about 25% of the total square footage of the built object, and that in attractive locations in Belgrade as well. In smaller cities, that percentage is around 15%. When that square footage is divided among all the owners, the more there are, the less square footage they will get. In practice, it has been shown that someone is always not satisfied and expects to get more square footage. It is difficult to come to an agreement there, and having learned from such experience, investors today look to avoid this in most cases – says Milenković.

Although construction has been reduced recently, data from the real estate market show that the demand for residential buildings is still at a very high level. This is also shown by the prices of square meters, which continue to rise from month to month.

The situation Is similar with construction land, which is still expensive due to the huge demand, especially those plots located in attractive locations, close to large centers and highways. The prices of these plots reach millions of euros. The latest data show that the area around Belgrade leads the way, but there is an increasing demand for construction land in Vojvodina as well.

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