The real estate market in Albania has experienced significant growth and transformation during the transition years and development of a market economy. New legislation on the real estate transactions was passed to respond to the dynamic requirements of the new environment.

The Real Estate Registration System (RERS) was established following adaptation of Law No. 7843, dated 13.07.1994 “On the real estate registration”. The scope of the RERS is the initial registration of all real estate properties situated in the territory of the Republic of Albania and administration of real estate registers, which shall keep records of subsequent transactions with such properties. The Project Management Unit (PMU) was further established to manage the initial real estate registration process to be finalized with their legalization. Whilst administration of the real estate registers and maintenance of related transactions’ records is the responsibility of the Offices of Real Estate Registration.

The initial real estate registration process has been proceeding for several years now and requires extensive time and efforts. Such process is currently running counter several issues, some of which are outlined below:

• Existence of numerous buildings having obtained no construction permissions by the competent authority or failing to comply with the terms of such permits;
• Overlapping of administrative acts or court decisions, which in many cases, cause serious procedural delays;
• Loss of accurate documentation tracing the origin of the property due to political turmoil of the 90s and deficiency of existing documents acknowledging the property title or any other real rights on such property;
• Sub-laws not instantly reflecting the dynamic requirements and development in the real estate market, thus arising vacuum areas subject to discretionary interpretations of the officials;
• Insufficient technical personnel involved in addressing current issues regarding real estate applications in addition to their inadequate professional competency causing delays in relevant procedures;
• Political trends, often bearing a direct negative impact on the consolidation of the real estate legislation and relevant institutional capacities.

In an effort to complete the existing legislation on real estate, Albanian Parliament has recently passed several laws outlined below.

Law No. 9209, dated 23.03.2004, “On legalization of the illegitimate extensions to existing buildings” . The scope of the said law is the legalization of buildings, which have a construction permit, whose terms are not fully complied with by the constructor. This law intends to determine the juridical status of the numerous illegitimate extensions. The said buildings can now be registered at the Real Estate Office provided that the legal documents have been completed according to the new law requirements and relevant fines that such law provides, are duly paid. Buildings, for which a construction permit was never obtained, are not subject to such law.

Law No. 9200, dated 26.02.2004, “Amendment to Law No. 8402, dated 10.09.1998, “On certification and planning of construction work” provides for the possibility of ad interim registration of buildings’ structure, upon request of the constructor or the owner of the building. Such registration benefits constructors, which may acquire lending against mortgage on such building structures. Furthermore, it enables the registration of the pre-contracts entered between the constructor and third parties.

Law No. 9235, dated 29.07.2004 “On the restitution and compensation of properties”. This law abrogated the restrictions on the area of urban land to be restituted and compensated. It also introduced a new limit on the area of agricultural land to be restituted and compensated, currently up to 60 ha.

The Albanian Parliament is expected to adopt a new law on the legalization of the illegitimate buildings constructed in certain areas with high concentration of population migrated from different regions of the country during the transition years. Such areas are generally concentrated around big cities and the capital. The scope of the said law will cover only the legalization of massive illegitimate constructions (whose definition shall be determined by the law) and not the legalization of sporadic illegitimate buildings.

RENATA LEKA	OLTION TORO
Boga & Associates	Boga & Associates
Mail: leka@bogalaw.com	Mail: oltion@bogalaw.com
Tel: 00355 4 251050	Tel: 00355 4 251050
Fax: 00355 4 251055	Fax: 00355 4 251055