AMENDMENTS ON LAW ON PLANNING AND CONSTRUCTION
The National Assembly of the Republic of Serbia has recently adopted amendments to the Law on Planning and Construction and the Building Legalization Law and has rendered the new Law on Construction Products, which set of regulations should lead to more efficient functioning of the construction sector. It is considered that changes to the Law on Planning and Construction will stimulate the emergence of new business entities on the market and market competition and that a large number of new domestic and foreign economic entities will be formed in order to undertake realization of new construction and other projects.
This article gives an overview of the most important amendments to the Law on Planning and Construction (hereinafter: the Law).
The measures planned to be taken in the upcoming period are related primarily to the connection of the eDozvola system with notaries, tax administration and cadaster, as well as making an administrative taxes’ system more simple.
Namely, in the analysis of the effect of the adoption of these amendments, it is foreseen that the abolition of seven administrative taxes in connection with the construction procedure should lead to savings of 5.7% of the value of the facility.
Currently, the largest construction fee for issuing a building use permit has been paid in the amount of 0.2% to the estimated value of the facility, instead in the amount which depends on the time required to process the average request. For example, for a typical warehouse, which is also viewed in the Doing Business Report of the World Bank, the amount of this fee was over RSD 56,000 and now it will range from RSD 1,800 to 18,000 depending on the complexity of the facility whose use is allowed. This measure will also reduce the number of objects that are now being used without a building use permit.
On the other hand, new administrative fees are introduced, such as fee for the issuing a confirmation of the competent public authority for the registration of work, for issuing location information and for issuing location conditions.
New amendments related to planning documents are important because those planning documents that should be implemented directly, such as urban plans, spatial plans of municipalities and cities in the area outside the settlement for which the urban plan is envisaged and spatial plans of the special purpose area, are the basis for issuing location conditions, which are further necessary for the issuance of a building permit.
It is envisaged that all planning documents shall be recorded in the central register of planning documents, which will be conducted by the public authority in charge of geodetic survey and cadastre affairs. All planning documents, registered in the registry, will be available to interested parties in electronic form, via the Internet, free of charge.
The location conditions are now valid for 2 years from the date of issue, instead of the previous 12 months. The Law also prescribes situations when the investor is not obliged to acquire location conditions, such as when work is performed for maintenance of the building and removal of obstacles for persons with disabilities, work that does not change the appearance of the object, does not increase the number of functional units and capacity of installations, as well as in all other cases of performing construction work that does not require connection to the communal infrastructure, i.e. do not change the capacities and functionality of the existing connections to the infrastructure network.
One of the biggest amendments is in the field of licensing. Instead of the Serbian Chamber of Engineers, the ministry responsible for construction, spatial planning and urban planning will be in charge for issuing a license for responsible planner, responsible urban planner, responsible designer and responsible contractor. The ministry in charge of construction will conduct the assessment of the conditions for the provision of services of drafting of technical documentation by a foreign citizen, which has been assessed by the Serbian Chamber of Engineers so far.
The amendment of Article 126 authorizes only companies or other legal entities to accrue license for drafting of a technical documentation. Project bureaus and entrepreneurs no longer have right to draft a technical documentation, but only companies or other legal entities that are registered in the appropriate register for drafting of technical documentation for certain type of facilities. The company who requires a license should have employees with a license of responsible project designer, as well as appropriate professional results in the field of drafting of technical documentation for certain type and purpose of a facility.
Also, companies that meet requirements for drafting of technical documentation must request a new decision on every two years in order to asses again whether the conditions for the provision of this service are fulfilled.
New provisions introduce the authority of the ministry competent for construction to execute control ex officio or at the initiative of inspector and other state bodies, legal and natural persons, in order to monitor fulfillment of the conditions for provision of service of drafting of technical documentation. The ministry can set aside the issued license if it determines that the conditions have not been fulfilled. A new license cannot be issued within the next six months from the moment when a decision by which the license was set aside becomes final.
Finally, the content and scope of the technical documentation that is developed in the process of project design and construction is precisely prescribed.
A set of new provisionsis being introduced in the field of construction permits. The most important amendment relates to the validity period of the building permit. The previous rule envisaged that the construction permit ceases to be valid if the construction of the building or the execution of construction work does not start within two years from the date of the decision granting the building permit becomes final. New rule prescribes that the construction permit ceases to be valid if the registration of construction work is not executed within three years from the date of the decision granting the building permit becomes final.
The deadline for submitting a request for amendment of the decision on the construction permit in case where investor is changed after the decision on the construction permit becomes final, is prolonged form 15 to 30 days from the date of the change. A new legal base for misdemeanor’s fine is foreseen in the amount of RSD 1,500,000 to 3,000,000 ( EUR 12,500 -25,000 ) for a investor established as a company or other legal entity if it does not submit a request for changing the decision on the building permit in the prescribed deadline due to the change of the investor.
For certain types of construction work, there is no need to obtain a building permit, but a decision on approval of execution of work. So far, these types of construction work have been prescribed by the Law, but the Amendments envisaged that they will be foreseen by a special bylaw of ministry in charge for construction, which should be passed within 60 days from the day of entry into force of the Amendments.
Companies or other legal entities that fulfill the conditions for the construction work (contractors), should obtain a decision on the fulfillment of the conditions for carrying out construction work on a certain type of object. The ministry in charge of construction is issuing the decision, with a validity period of 2 years. A subcontractor should obtain the same decision. Unlike a service of drafting of technical documentation, a construction work can be performed by both the company and the entrepreneur, provided that they are registered in the appropriate register for the construction of a certain type of facility or for carrying out certain construction work, and who have employed persons with a license for the responsible contractor and the corresponding professional results.
In addition to the obligation to submit a statement on the completion of the construction of a building foundation, with a geodetic record of the foundation, a contractor now has the obligation to submit a statement on the completion of the construction of a building in a constructive sense, along with the geodetic record of the building. Otherwise, fines ranging from RSD 500,000 to 1,000,000 (EUR 4,150-8,300) are foreseen for misdemeanors for companies, or other legal entity that builds an object. The contractor will not obtain a building use permit in case of non-submission of the mentioned statements, and in this case the applicant will be required to undertake actions in accordance with those obligations before re-submitting the application for the issuance of the building use permit.
If a company or other legal entity registered for drafting of technical documentation and /or performing a construction work does not meet the conditions prescribed by the Law for carrying out these activities can also be fined for a business offense in the amount range from RSD 1.500.000 to 3.000.000. Fines for entrepreneurs have been increased from RSD 50,000 to 150,000 and from RSD 300,000 to 500,000 ( EUR 2,500-4,150).
Professional supervision/monitoring during the construction of the building or execution of construction work for which a building permit has been issued, can be performed by a person who meets the requirements prescribed by this law for the responsible project designer or the responsible contractor, who should be employed in a company or other legal entity who obtained a decision on the fulfillment of the conditions for carrying out construction work on this type of facilities.
Finally, the procedures commenced in accordance with applications for issuing decision for approval ofexecution of work, location permits, location conditions, building permits, usage permits and other requests for resolving individual rights and obligations submitted by the date of entry into force of the Amendments, will be completed according to the Law by which proceedings are commenced.
Attorney at law Damir Petrović
The information contained herein has been provided only for the purpose of general information and cannot be considered as a legal opinion or legal advice. Accordingly, the Law Firm Petrović Mojsić & Partners disclaims all responsibility and accept no liability in respect to actions taken or not taken based on any or all the contents contained herein.