The Path to Legal Uncertainty is Paved with Good Intentions

June 20, 2019

The Path to Legal Uncertainty is Paved with Good Intentions

June 20, 2019

Miloš Velimirović

Miloš Velimirović

Partner

Milan Novakov

Milan Novakov

Senior Associate

The Law on the Registration Procedure with the Cadaster of Real Estate and Utility Lines (“Official Gazette of RS”, no. 41/2018, 95/2018 and 31/2019 – hereinafter the „Current Law“) initially entered into force in June 2018. Up to this date, it has already undergone two amendments, one in December 2018 (“Official Gazette of RS” no. 95/2018 – “December Amendment”) and the second in April 2019 (“Official Gazette of RS” no. 31/2019 – “April Amendment”).

Although the intentions were good, both the December Amendment and the April Amendment have legal inconsistencies and to that extent, application of those certain troublesome provisions is flawed and therefore unpredictable in practice – leading to legal uncertainty.

Herein, for the sake of simplicity, we will refer only to the consequences of the December Amendment, while the April Amendment will be a subject of a letter issued separately in the following period.

Article 6 of the December Amendment

 When the Current Law entered into force, the general rule stipulated by the Article 57 of the Current Law was that all procedures initiated before the cadaster which were not finalized up to that point, will be finalized in accordance with the previously valid provisions of the Law on State Survey and Cadaster (“Official Gazette of RS”, no. 72/2009, 18/2010, 65/2013, 15/2015 – the decision of CC, 96/2015, 47/2017 – authentic interpretation, 113/2017 – other law, 27/2018 – other law and 41/2018 – other law – hereinafter the “Previous Law”).

 However on 16th December 2018, the Article 6 of the December Amendment has introduced an exception to the Article 57 of the Current Law, stipulating that Article 35 Paragraph 3 of the Current Law may be applied retroactively to all procedures, regardless of the fact if the procedure has been initiated during the validity of the Current Law or the Previous Law.

In its essence, the Article 35 Paragraph 3 of the Current Law stipulates the right of the cadaster to decide on joining of two or more separate cadaster procedures into a single procedure if the cadaster estimates that the simultaneous decision in all of those procedures will result in the more economical and efficient procedure.

Although the logic behind such retroactive application of the Current Law is clear (the acceleration of the relevant cadaster procedures), the manner of regulation and the lack of further regulation brings up a number of significant questions.

Firstly, it is very questionable if the Article 6 of the December Amendment is in accordance with the Article 197 of the Constitution of the Republic of Serbia (“Official Gazette of RS” no. 98/2006). The Article 197 paragraph 1 stipulates that the laws and all other general acts cannot have a retroactive effect, and the paragraph 2 further reads that only by exception, certain provisions of a law may have a retroactive effect conditioned that there is general interest for such retroactive effect and that such interest is determined during the adoption of the law.

The review of the Proposal of the November Amendment and the limited discussion held with the Serbian Parliament did not present the clear decision determining the general interest for adoption of the Article 6 of the December Amendments with respect to the retroactive application of the Article 35 paragraph 3.

Secondly and more practically, after a procedure initiated during the validity of the Previous Law is joined with the procedure initiated during the validity of the Current Law, which law does apply to the unified procedure – the Current Law or the Previous Law?

If the answer is the Current Law, what happens if there is a situation in which the registration of a request into the cadaster would be possible in accordance with the Previous Law, but it is not possible in accordance with the Current Law?

It would be a fair legal assumption to conclude that the cadaster would be obliged to reject such a request. But the problem is that the assumption, in fact, does not make any sense – because if the procedures were not joined, the request would be successfully resolved in accordance with the provisions of the Previous Law as per the general rule stipulated with the Article 57 of the Current Law.

Another related question to the issue above – what is the structure of the resolution of the cadaster adopted at the end of a joint proceeding?

Should the resolution basically be structured as multiple resolutions on one piece of paper or should it be a unified resolution with multiple decisions related to multiple requests? In either case, what happens when any of the parties to such resolution appeal?

Let’s say that the appealing party is the party whose request was merged into a procedure with another person’s request, but was rejected due to the fact that it is not allowed by the Current Law, regardless of the fact that on the day of submission of the request it was permissible by the Previous Law.

Does the party within the joint proceeding which is satisfied with the resolution, suffer the consequences of the appeal by another party?

We can only guess the answers to the above questions and certainly, those and more questions will be posed by the responsible clerks at the cadaster also. Regardless of the good and fair intentions of the legislator, discontent is bound to occur between the relevant parties to the joint procedure. Appeals will be submitted and the second instance decisions will approximately be made at least year and a half after the submission of the appeal.

And the legal uncertainty will temporarily, but effectively, take yet another real estate into the Serbian property law roller coaster.

This text is for informational purposes only and should not be considered legal advice. Should you require any additional information, feel free to contact us.

Contact:

Miloš Velimirović, Partner
milos.velimirovic@sog.rs

Milan Novakov, Senior Associate
milan.novakov@sog.rs

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