City of Belgrade offering favorable reprogramming to old Land Development Public Agency debtors – Investors' debts around RSD 16 billion

City Manager Goran Vesic stated that the decision defining the reprogramming of building land fee debts, proposed by the Belgrade Land Development Public Agency and the City Council would be on the agenda of the Assembly of the City of Belgrade.

– At the moment, various investors owe Belgrade around RSD 16 billion in debts and interests for building land fees. Half of this amount, around RSD 8 billion, is the principal, and the rest are interests. The outstanding debts pertain to nearly 366 thousand square meters. The Belgrade Land Development Public Agency has initiated several thousand court disputes, and some of these debts are more than ten years old – Vesic said.

As Beoinfo reports, the majority of the debts were incurred from 2004 till 2011 due to the possibility of paying for only 10% of the agreed amount during the signing of agreement, which was sufficient for acquiring the building permit and initiating the construction.

--After paying the first installment and acquiring the building permit, some investors stopped repaying the debt, completed the facilities and sold a certain number of them in the real estate market, whereas the debts toward the Land Development Public Agency remained unsettled – the city manager adds.

Vesic says that they've decided to offer the reprogramming to all their old debtors in order to resolve the issue of the inherited debt.

– If the deputies adopt this decision, the city of Belgrade will offer to investors with building land fee debts to repay the principal within a year, which grants them the right of interest write-off, along with the obligation of regularly repaying the principal in equal monthly installments and the submission of a payment security instrument in the form of a bank guarantee or mortgage. If the debts is repaid in one installment within four months, the debtors are granted the right of interest write-off, but also of 50% discount on the principal – Goran Vesic said and added that the building fees in Belgrade had been reduced in line with the Law on Planning and Construction and that the old debtors would therefore be paying the amounts on the level of current contributions for the same locations, taking into consideration the 50% discount.

The city manager said that the reprogramming was a great opportunity for natural and legal persons with debts towards the city to resolve the issue under very favorable conditions and that there wouldn't be another opportunity.

– Those who fail to use this opportunity risk the continuation of the court procedures and the repayment of the entire debt along with penalty interests, foreclosure and not being allowed to cooperate with the city in any capacity in the future, as the city will make a black list of unconscientious investors – Vesic said and added that the City of Belgrade expected that up to RSD 4 billion would be repaid through the reprogram and that the amount would be invested in the infrastructure the city lacked.