Expropriation in Bosnia and Herzegovina

How the office works: Law Office Prnjavorac acts in expropriation matters across the whole of Bosnia and Herzegovina, in the Federation of BiH, in Republika Srpska and in the Brcko District, both for owners faced with expropriation and for institutions that have started the procedure. The work runs from the first negotiations with the beneficiary, through objections and appeals against the expropriation decision, to representation before the court in the proceedings determining the compensation.

Expropriation is a statutory procedure for the compulsory taking or restriction of ownership rights over real property, against compensation to the owner, for the realisation of a general, that is public, interest. In Bosnia and Herzegovina it is conducted under the entity expropriation laws, which lay down strict conditions and procedures designed to protect the rights of owners. In practice the state, a city or another public body may expropriate private land or other real property where that is necessary for building infrastructure, roads, schools, hospitals and similar projects of public significance, but only against appropriate compensation and in compliance with the prescribed procedure.

The public interest as the first condition

Expropriation proceedings are commenced only after the competent authorities have established a public interest in the particular project. Without a decision on the public interest there can be no expropriation. Once the public interest has been formally established, by a decision of the government, of a municipal council or of another competent body, the beneficiary of the expropriation, most often the state, a public enterprise or an institution that needs the land, may take the next step.

The duty to attempt an acquisition by agreement

The beneficiary of the expropriation is first obliged to attempt to acquire the property from the owner by agreement. In practice the owner is offered a purchase or an exchange of the property, and a public invitation calling on owners to negotiate is often published. This stage matters, because if agreement is reached the formal expropriation procedure may be avoided altogether or concluded by settlement. Only where no agreement is reached may the beneficiary file a proposal for expropriation of the property with the competent municipal service.

The administrative procedure before the municipal service

The competent municipal or city administration conducts the administrative expropriation procedure. On receipt of the proposal it checks whether all the statutory conditions are met: above all the existence of a decision on the public interest, proper documentation of ownership of the property, evidence that an acquisition by agreement was offered, and that the funds for the compensation have been secured.

The authority conducting the procedure is obliged to summon the owner of the property to an oral hearing before issuing the decision, so that the owner may present the facts and any objections to the proposed expropriation. Where there are differences between the position in the land registers and the actual position, for example where someone else is in possession, the question of the ownership right is resolved first, as a preliminary question.

The expropriation decision and the appeal

Once the procedure has been carried out, the municipal service issues the expropriation decision. The decision states who the beneficiary of the expropriation is, which property is being expropriated, for the construction of what facility or works, and the name of the owner of the property. The expropriation may be total, covering the whole property, or partial, covering for example a part of a plot. Where all the conditions are met the proposal is granted and the expropriation decision is issued; otherwise the proposal is refused.

Once the decision has been issued the owner has a right of appeal where the owner considers that the statutory provisions have not been observed. In the Federation of BiH the appeal is decided by the Federal Administration for Geodetic and Property Affairs, and in Republika Srpska by the Republic Administration for Geodetic and Property Affairs.

When the administrative procedure has ended and the decision has become final, the beneficiary of the expropriation acquires the right of ownership and possession of the expropriated property, and the former owner acquires the right to compensation. It should be noted that before taking possession the beneficiary must pay the preliminary compensation offered, or deposit the funds for the compensation, so that the owner's rights are protected.

The rights of the owner during the procedure

During the expropriation procedure the owner of the property has certain rights that may be exercised with legal assistance.

• Expropriation of the remaining part. Where only a part of a plot is expropriated and the remaining part becomes non-functional or can no longer be used normally, the owner has the right to require that the remaining part of the property be expropriated as well. The official is obliged to warn the owner of that right during the procedure. This protects the owner against being left with a piece of property that is useless after a partial expropriation.
• Objections during the procedure. The owner may raise objections where the owner considers that the conditions of public interest are not met, that the proposed beneficiary is not authorised, or that there are procedural failings. All of these are matters that may later be challenged by legal remedies.
• Ownership as a preliminary question. Where the land register and the actual position diverge, that question is resolved before the expropriation decision is issued.

Conducting the procedure correctly is of considerable importance, so involving a lawyer ensures that the owner's interests are properly represented from the very beginning.

Determining the compensation for expropriation

Compensation for expropriated property must be fair and appropriate, which in practice means that it should correspond to the market value of the property taken. The expropriation procedure has two stages: the first establishes whether the expropriation will take place at all, which the municipal administrative authority decides by its decision, and the second determines the amount of the compensation for the owner. It often happens that the amount is not agreed at once but is negotiated or decided later.

Once the expropriation decision has become final, the law provides a short period, for example two months in the Federation of BiH, within which the beneficiary and the former owner are to attempt to determine the amount of the compensation by agreement, with the municipal service acting as intermediary. That is the owner's opportunity, with expert valuations and legal advice, to obtain the fairest possible offer.

The compensation may be paid in money, but the law also permits another appropriate property to be given as compensation, for example by offering replacement land or a building of similar value, where the owner agrees and such a possibility exists. In practice, where houses or flats are expropriated, owners are often offered another flat or house to move into as a form of compensation, which can be a good option where it suits the owner's needs.

Where the court determines the compensation

If no agreement on the compensation is reached within the prescribed period, the case is referred to the court. The competent court, the municipal or basic court for the location of the property, then conducts a special non-contentious procedure in which it determines the amount of the compensation for the expropriated property.

That court procedure involves taking evidence of the value of the property. Court experts are usually engaged, in construction, surveying, agriculture or economics, to assess the market value of the property taken. The owner has the right to propose evidence, to challenge the findings of an expert proposed by the other side and so on. The aim is for the court to determine compensation that is fair and that may not be lower than the market value of the property taken.

The assessment takes into account the circumstances and market prices at the time the first-instance decision on compensation is issued, which means that the value is calculated according to the state of prices and of the property at that moment, so that the owner is compensated for what was lost. Where there has been investment in the property in the meantime, or an increase in value on account of, say, changes in planning, that too may be taken into account through the expert valuation.

What the compensation covers

It is important to note that the compensation does not cover the value of the land alone. Where there was a building on the property being expropriated, such as a house or a commercial building, or planted permanent crops, those enter into the compensation as well.

The owner is also entitled in certain cases to compensation for lost profit, for example lost rent or income on account of the expropriation, and to the cost of relocation where a household has to move out. In every case the aim is that the former owner should not be financially worse off for the expropriation but should receive an equivalent value for the property.

Given the complexity of determining the compensation and the often wide divergence in valuations, as cases in which different experts gave different assessments of the value of the land show, it is of considerable importance to have a legal representative acting for you. A lawyer can ensure that all the relevant evidence is put before the authority in the compensation procedure, that reliable experts are engaged and that legal remedies are lodged where the compensation has not been determined in accordance with the law. That increases the chances of the owner obtaining the fairest possible compensation for the property.

An expropriation lawyer across Bosnia and Herzegovina

The expropriation procedure, the determination of the compensation and any restitution of the property are legally complex and sensitive matters in which the stakes are high: the protection of the right of ownership and securing fair compensation. Every stage carries its own difficulties, from proving the existence or absence of a public interest, through negotiations about the value of the property, to the formal steps before the administrative authorities and the courts.

Law Office Prnjavorac has long experience in property law and expropriation. Our team will guide you through every step: from the first stage of negotiations with the beneficiary of the expropriation, through drafting objections and appeals against the expropriation decision, to representation before the court in the proceedings determining the compensation. We also advise on how best to protect your rights, what you may claim under the applicable regulations and which time limits must not be missed. Where there is a ground for the restitution of expropriated property, we will help you prepare the request and will represent your interests before the competent authorities.

The office acts throughout Bosnia and Herzegovina, which includes the Federation of BiH, Republika Srpska and the Brcko District. Wherever your property is or wherever the procedure is being conducted, our expropriation lawyer can take on the case and conduct it efficiently. Related areas of our work are real estate in Bosnia and Herzegovina, administrative law and compensation of damage.

Frequently asked questions about the expropriation procedure

The questions we are asked most often by owners faced with expropriation in Bosnia and Herzegovina.