Almost every constitution of a democratic country, including the Constitution of the Republic of Serbia, guarantees the right of ownership of property to its citizens — with a few exceptions, one of which is expropriation.
In this text, our expropriation lawyers explain what expropriation is, how the expropriation procedure is carried out in Serbia, and how property owners can obtain fair compensation.
Expropriation Law
The Expropriation Law is the fundamental legal act that regulates the conditions, procedure, and method of transferring real estate from private to public ownership. This law sets out in detail what expropriation is, when it can be carried out, who can initiate it, how public interest is determined, and how fair compensation is provided to the property owner.
According to the law, expropriation is a legal mechanism through which real estate is transferred from private to public ownership. Real estate includes land, buildings, and other construction structures, but in practice, land expropriation is the most common form.
The law stipulates that expropriation may be carried out exclusively in the public interest, based on a decision issued by the Government of the Republic of Serbia, and for the purpose of constructing infrastructure, energy facilities, public institutions, and similar projects of broader social importance.
The law also clearly distinguishes between full and partial expropriation, sets deadlines for issuing decisions, provides for the property owner’s right to appeal, and regulates the compensation procedure — whether by mutual agreement or through the court.
In the following text, we explain how this law is applied in practice and what steps you should take if you are the owner of a property subject to expropriation proceedings.
Experience from our client
I can't thank Stefan and his team enough for the outstanding work during the expropriation of my land. The initial offer of Serbian Railways was 2.296.090,7 dinars, but thanks to Stefan's knowledge and persistence, they managed to secure the final sum of 4.315.602,75 dinars — a difference of more than 17.000 euros! This result exceeded my expectations, and their professionalism and dedication are truly impressive. I highly recommend their services to anyone facing expropriation. - Olivera Bulajić
What does the expropriation procedure look like?
Before submitting a proposal for expropriation, it is necessary to establish the existence of public interest. The authority competent to determine the existence of public interest is the Government of the Republic of Serbia, which is obliged to decide on the proposal for determining the public interest within 90 days. Against this decision of the Government, it is possible to initiate an administrative dispute before the competent court within 30 days.
The expropriation procedure begins with the submission of a proposal for expropriation by the authorized entity, which is called the expropriation beneficiary. It can be the Republic of Serbia, an autonomous province, a unit of local self-government, a public company and a company whose founder is the Republic of Serbia. It is an administrative legal procedure.
The expropriation procedure is carried out before the competent municipal administration bodies. In addition to the beneficiary of the expropriation as the proponent, the owner of the real estate to which the expropriation refers also participates in the procedure as an opponent of the proponent.
If all conditions stipulated by the law on expropriation are met, the municipal administrative body will pass a decision on expropriation, against which the owner of the real estate has the right to appeal. The authority responsible for resolving the appeal is the Ministry of Finance. In practice, many property owners are not sure when and how to file an appeal, or even whether they have valid grounds to do so. In such situations, expropriation lawyers can explain each step of the procedure and help ensure that your property rights are protected in a timely manner.
The owner of the expropriated real estate changes on the day the decision on expropriation becomes legally binding, and this is called complete expropriation.
However, expropriation can also establish an easement or lease on real estate for a certain period of time, and this is called incomplete expropriation. This type of expropriation can exist for a maximum of three years, and is most often established for the purpose of exploration of ore and other resources, extraction of sand, gravel, clay, etc. After this period expires, the beneficiary of the expropriation is obliged to return the real estate to its original condition.
In the event that a proposal for the expropriation of only one part of the land has been submitted, however, the owner of the real estate has no economic interest in using the remaining part of the land, they may request that the expropriation procedure also include the remaining part of the property.
Compensation for land expropriation
A) Proceedings before the competent administrative body
In the event that the appeal of the owner of the real estate is not resolved positively, and the decision on expropriation becomes legally binding, the procedure for determining the compensation for the expropriated real estate is carried out (that is, the price that will be paid for the real estate to its former owner). The beneficiary of the expropriation is obliged to submit an offer on the amount of compensation for the expropriation of the land. The beneficiary of expropriation forms the specified offer on the basis of certain criteria, such as the assessment of the value of the land by the tax administration and the value of the buildings on the land determined by experts. At this stage of the procedure, expropriation lawyers often assist property owners to ensure that the offer made by the expropriation beneficiary is fair and in accordance with the law.
In case the real estate owner considers that the price offered by the expropriation beneficiary is realistic and fair, they will reach an agreement on the amount of compensation, which ends this procedure and the agreement acquires the force of an enforceable document. This ends the procedure of land expropriation.
However, what often happens in practice is that the owner of the real estate considers that the compensation offered by the beneficiary of expropriation is too low, and that its value is not properly assessed. In that case, there is usually no agreement on compensation with the expropriation beneficiary, but this issue is resolved by the court in non-litigation proceedings.
B) Proceedings before the Court
As already stated, the proceedings before the court will not take place at all if the beneficiary of the expropriation and the former owner agree on the amount of compensation, and this stage in the expropriation procedure is not mandatory, but only occurs in case of dissatisfaction of the real estate owner with the offered price. This court procedure is initiated ex-officio in the event that an agreement has not been reached within the statutory period of two months from the date of the decision on expropriation becoming legally binding. The expropriation of the land and this procedure that is conducted before the court is the most important part for the former owner. Jurisprudence regarding compensation for land expropriation is varied and depends on the location and other qualities of the real estate.
In this court procedure, the decision is made by a three-member panel composed of one professional judge as the president of the panel and two lay judges. After determining all the relevant facts, the court will determine the scope and form, that is, the amount of the compensation. The costs of the procedure will be borne by the beneficiary of the expropriation, except in the case of costs caused by unjustified actions of the previous owner of the real estate.
What is the market amount for compensation for expropriation?
Court practice has shown that the compensation (price) for land expropriation depends on several factors (location, type of land, market conditions, etc.). What can be concluded in court practice is that, in court proceedings, the owners are awarded a significantly higher amount in the name of compensation for expropriation compared to the amount initially offered. Sometimes, twice as much as the first offer is awarded in the process.
Expropriation Costs
When it comes to expropriation costs in the context of attorney’s fees and court expenses, these depend on the stage of the procedure and the value of the expropriated property.
In practice, this means that the cost of hiring an expropriation lawyer varies depending on the complexity of the case — including the number of submissions that need to be prepared, the number of hearings the lawyer attends, whether an appeal is filed against the first-instance decision, as well as the amount of compensation for the expropriated land.
In any case, expropriation lawyers can provide you with an estimated cost when you contact them, and you can also check the official Attorney Tariff to see how much each legal action costs.
De facto expropriation
Everything we have written so far represents a legally regulated procedure for realizing expropriation, so we could conditionally call it legal expropriation. On the other hand, in practice there are cases when the expropriation was carried out outside the legal regulations and the prescribed procedure, and we call this situation de facto expropriation.
For example, if a road was built across your plot of land without prior land expropriation, that is, the purchase of a part of the plot that was necessary for the construction of that road, it is a de facto expropriation.
In this case, it is necessary to initiate court proceedings to determine compensation for the actual expropriation, and expropriation lawyers can assist you with this process. The compensation will depend on several factors - eg. whether the construction of the road affected the value of the real estate, what percentage of the private plot was occupied by the road, etc. Judicial practice in proceedings regarding de facto expropriation is diverse, but it is recognized by the court's tendency to award higher amounts in order to better protect the interests of private property owners. Of course, even with de facto expropriation, it is understood that the compensation should not be lower than the market value of the part of the real estate that was usurped outside of the legally implemented expropriation procedure.
Attorney for expropriation
If the administrative body has submitted a proposal for the expropriation of your real estate and you want to be sure that you will receive a fair compensation for it, a smart choice of a lawyer who will represent you in this procedure is of crucial importance. In addition, if in your case there has been a de facto expropriation, the lawyer will help you realize your right to compensation for the part of the real estate that was de facto expropriated.
