NALED: Expropriation is a burden for local budgets, with legal costs up to 500,000 dinars per procedure

The National Alliance for Local Economic Development (NALED) in Serbia has highlighted a significant problem: 84% of surveyed cities and municipalities are facing lawsuits due to de facto expropriation of land. Furthermore, half of these local governments report that new legal proceedings are being initiated against them.

While the compensation amounts paid to landowners may be small, the associated legal and administrative costs can be substantial, reaching up to 500,000 dinars per procedure. NALED stated that these expenses place a considerable burden on local budgets, complicating financial planning for municipalities.

The survey, which included 32 local self-governments, revealed that these cases often involve land where rural roads were built based on verbal agreements with owners, without formal expropriation procedures. A significant challenge is the lack of prior documentation, such as owner consent or contracts, in nearly half of the existing cases, hindering legal protection for local governments.

NALED points out that two-thirds of landowners initiate court proceedings without first attempting to resolve disputes through out-of-court settlements. To tackle this systemic issue, NALED proposes establishing a unified database for tracking compensation payments and administrative procedures. They also advocate for a standardized model for out-of-court settlements and the development of local plans to resolve existing cases and prevent future ones. Mihailo Gajić, head of NALED's research and analytics unit, emphasized the need for improved cooperation between local governments, public prosecutors, courts, and cadastral authorities, along with enhanced staff training.

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Zato NALED predlaže uspostavljanje jedinstvene baze podataka, budući da najveći broj lokalnih samouprava nema centralizovane podatke o ukupno isplaćenim naknadama, sprovedenim upravnim postupcima, kao i izradu lokalnih planova za rešavanje postojećih i sprečavanje novih slučajeva.