Conversion of Land-Use Rights into Ownership Rights
In practice, a significant number of citizens and business entities in the Republic of Serbia are still registered in the Real Estate Cadastre as holders of land-use rights on construction land, rather than as owners. This status is often considered not to be an urgent issue. The conversion of land-use rights into ownership rights represents an important legal step that is advisable to carry out even when there is currently no intention to build on or transact with the property.
The reason for this lies in the fact that a land-use right has a significantly narrower scope compared to ownership rights. In many situations, represents a serious limitation.
What Does Land Conversion Entail?
Land conversion is a legally prescribed procedure through which an existing land-use right on construction land is transformed into an ownership right. This legal institute arose as a consequence of the historical development of property-law relations in Serbia. Construction land was, for decades, in state, or formerly social, ownership. The procedure itself is carried out under the conditions prescribed by the Law on Planning and Construction. (“Official Gazette of RS”, Nos. 72/2009, 81/2009 – correction, 64/2010 – Constitutional Court decision, 24/2011, 121/2012, 42/2013 – Constitutional Court decision, 50/2013 – Constitutional Court decision, 98/2013 – Constitutional Court decision, 132/2014, 145/2014, 83/2018, 31/2019, 37/2019 – other law, 9/2020, 52/2021, 62/2023, and 91/2025).
Why is Conversion Necessary?
Without completed conversion, it is not possible to obtain a building permit for the construction of a facility on land for which only a land-use right exists. Furthermore, the transaction of such land is significantly more complex and often less attractive to potential buyers or investors.
By obtaining ownership rights:
- the sale and encumbrance of the land are facilitated,
- legal security is increased,
- the use of the land as collateral (mortgage) becomes possible,
- the legal status of the land and the structure is equalized.
Conversion Without Payment
Current regulations provide for the possibility of conversion without payment, which is particularly significant for a large number of individuals. In such cases, the procedure is carried out before the competent cadastral service, but exclusively at the request of the interested party.
Among others, the right to conversion without payment is granted to:
- individuals registered as owners of buildings constructed on the relevant parcel,
- holders of land-use rights on undeveloped construction land,
- owners of buildings constructed on construction land in public ownership, provided they have entered into a long-term lease (at least 50 years) and have fulfilled the contractual obligations,
- lessees of construction land in public ownership without payment, after the finalization of the occupancy permit, if provided for in the contract.
Who Currently Cannot Perform Conversion?
There are certain categories of entities for which conversion is still not possible. These include:
- sports organizations and associations,
- agricultural and residential cooperatives,
- entities involved in succession proceedings,
- social enterprises.
For some of these categories, the legislator has envisaged the adoption of special regulations, while for others, transitional restrictions are prescribed, such as the completion of privatization or the conclusion of succession. Additionally, conversion may be limited when the land is designated by planning documentation for public-use facilities or public spaces.
How to Avoid Delays in the Procedure
Although the duration of the procedure does not depend solely on the applicant, proper preparation can significantly shorten the timelines. Before submitting the application, it is necessary to gather complete documentation, including:
- proof of the land-use right,
- proof of ownership of the building (if applicable),
- appropriate location information.
Business entities must additionally obtain information from the competent authorities for spatial planning and urbanism.
Why is it Advisable to Engage a Lawyer?
The conversion procedure is often administratively and legally complex. Engaging a lawyer specializing in property-law relations can help avoid errors, the need to supplement applications, and unnecessary delays. The lawyer monitors the course of the procedure, communicates with the competent authorities, and responds promptly to cadastral requests.
What Do You Obtain After Conversion?
Upon completion of the conversion procedure, you become the full owner of the land. This unites the building and the land into a single subject of ownership rights, representing the most stable and favorable legal framework for further disposition of the property.