Montenegro’s real estate market, worth over €400 million annually, continues to face significant challenges, particularly with unregulated brokerage and low levels of control. The informal real estate market thrives, resulting in millions of euros lost in tax revenue due to inadequate enforcement, according to Veselin Dragaš, president of the Real Estate Brokerage Group at the Chamber of Commerce.
In response, the Chamber of Commerce and the Real Estate Agencies Association have initiated the creation of a law on real estate brokerage, which has recently been adopted by the government. This law aims to establish a clearer framework, increase security for participants, and encourage legal business practices in the sector, bringing Montenegro closer to EU standards.
Dragaš pointed out that due to the lack of proper regulation, illegal brokerage is widespread, with numerous unregistered agencies operating through websites, social media groups and apps. Foreign citizens are often involved in illegal brokerage, which is banned in many of their home countries. Furthermore, there is no register of brokers or a system of licensing, making it difficult for buyers and sellers to distinguish between legal and illegal agents.
Dragaš emphasized that the lack of control over real estate brokerage also hinders investment, as reputable investors are hesitant to invest in an unregulated market. He stressed the importance of aligning Montenegro’s laws with EU standards, noting that neighboring countries like Slovenia, Croatia and Serbia have had laws regulating real estate brokerage for over a decade, which have significantly reduced illegal activities.
The new law will introduce mandatory training and licensing for brokers, create a register of brokers, and establish stricter rules for advertising properties and conducting transactions. Penalties for illegal brokerage will range from €1,000 to €4,000 for individuals and €4,000 to €20,000 for companies.
Dragaš concluded that the law will benefit the state by increasing tax collection, provide greater protection for market participants, and create fairer competition for brokers. The focus will be on bringing unregistered brokers into the legal system while ensuring that those already operating legally are not unduly burdened.
