At the onset of war in 1992, and according to the 1991 census data, Bosnia-Herzegovina had 1,294,863 housing units, 80 percent of which were privately owned and the remaining 20 percent were socially owned (a form of state ownership).

Socially owned apartments comprised mostly apartment buildings in urban areas, whilst private ownership included suburban and rural housing, as well as some apartments that remained in private ownership after 1959 nationalization.

Socially owned apartments were given out to the employees of socially owned (state) companies and institutions based on their merits (i.e. the length of employment, qualifications, social status).

Public housing development was funded through the common consumption fund, salary taxes and benefits, and housing bank loans. Tenants were granted special tenants’ rights, with strong legal attributes - the leasing agreement could not be called off, and the right was inheritable by the family members living in the same apartment.

Private housing was funded with own funds, loans from banks and enterprises, and such houses consisted of one to three apartments; a good portion of these houses was built illegally.

Currently, the greatest problems are the non-existence of housing policy, legislature, funding, taxation, leasing relations, etc.

The tenants’ status is regulated by the regulations on housing relations, first valid in ex SFRY, and then they were taken over by the republics and, after SFRY split, by the new countries.

After the end of World War II in 1945, there was a great problem with the refugees who were spread all over SFRY. In order to solve that problem, according to the Law on national committees in 1945, the right to have disposal of all apartments, both state-owned and private, was given over to the national committees in the municipalities and

districts. Then the activity started, in which the apartments were given to the families who did not have them, thus accommodating people in all the apartments that were empty, and afterwards two or more families were accommodated in one apartment. Such activity lasted until 1952 when the Provision on housing relations was issued, where a right to housing was determined and the whole problem of housing relations was regulated, still keeping the right to give out all apartments for use and keeping and creating new co-tenant relations, i.e. several families in one apartment.

Such policy lasted until the end of 1958, when the Law on nationalization of apartment buildings and apartments was issued, according to which the nationalization of all apartment buildings with two and more apartments, in some exceptions three smaller apartments, was carried out, in which case the former private owner or juristic person (religious communities and other associations) was exempt from nationalization of two or three smaller apartments. In April 1959 the Law on housing relations was issued, regulating the whole housing problem in SFRY, keeping the existing situation, but discontinuing the possibility for the state to give out privately-owned apartments to other people, and creating new co-tenant relations. This law gave the great rights to the tenancy-right holder, and minor rights to the owner, especially to a private one, because the rent was determined by the state, and it was very low, and even such low rent was taken by the state, until the republic regulations were issued. This law was effective until 1971 when the housing policy was transferred to the competence of the republics, and in Bosnia-Herzegovina it used to be taken over every year until 1974 when the republic Law on housing policy was issued, and it is, with some corrections and amendments, still valid; in the Federation of B-H it is taken over and used as a federal law, and the Republic of Srpska issued the Law on housing policy with almost the same provisions.

According to the provisions of these regulations, the tenancy-right holder gets that right with the day of moving in, i.e. moving in based on the agreement on apartment use, concluded in accordance with the adequate document or other legal document what represents a fully valid basis for moving in.

Rights of the tenancy-right holder:

• nobody can move in the apartment he is using without the approval given by the tenancy-right holder
• tenancy-right holder has a right to change one apartment for another with a written agreement
• tenancy-right holder can terminate an agreement for apartment use at any time and without any explanation
• lessor can terminate an agreement on apartment use only in some legal cases through the court suit.

The law determines that the tenancy-right holder of the same apartment can be only one person, and an individual can be a tenancy-right holder for only one apartment.

An exception can be made if the agreement for apartment use is concluded by one of the spouses who is living in a common household, since the other spouse is considered a

tenancy-right holder as well.

Today, after the privatization of apartments started in the Federation on 06.03.1998, and in the Republic of Srpska on 28.07.2001, the tenancy right as a category has vanished.

In the Federation of B-H, the deadline for submitting the requests for purchase of apartments ended on 06.09.2000 and all the agreements concluded before 06.12.1997 were terminated on 06.12.2000, except in the cases where apartments were purchased before, and persons who concluded the agreements on apartment use before 06.12.1999 have got a right to purchase their apartments.

Such regulations have completely regulated the status of those tenancy-right holders who still have a right to purchase their apartments, before they purchase them, and that applies to the apartments which were abandoned, devastated and had double users. Theoretically, there is a solution for the persons who missed the opportunity to submit a request for purchase of apartment within the deadline of 06.09.2000 to give them a status of a lessee, but the cantons, which are competent for this, have not issued these regulations yet.

Thus, the status of tenancy-right holders, who have not purchased their apartments yet, still has not been legally regulated, but the provisions of the Law on housing relations are applied unofficially. There is still an open question about the parties signing the agreement and in what status, what rent and who it is paid to, and what the rights of the apartment user are.

The status of tenants in the apartments owned by the individuals, where there is the tenancy right to these apartments acquired before 1959, has not been solved yet, and

it is the same case with the apartments, which have been nationalized, and still there is no law on restitution.

In the Republic of Srpska the privatization of socially owned apartments should last until 28.07.2002, and the tenancy right was terminated on 28.07.2001, and each new agreement on apartment use falls within the regulations on lease which is regulated in the same law where the purchase of apartments is regulated. However, it should be emphasized that this regulation determines the rent according to the law and it is at the level of a low rent depending of the age of building and the area in which the apartment is located. The status of the privately owned apartments with an acquired tenancy right and the status of tenancy-right holders in these apartments has been solved theoretically.

After the war ended and the Dayton Peace Accord was signed in 1995, Bosnia-Herzegovina was structured as a country with two entities (the Federation of Bosnia-Herzegovina comprising of 10 cantons and the Republic of Srpska). A significant number of housing units, especially in the Federation of B-H, was severely damaged or completely devastated, and about 2.5 million persons (60 percent of the population) were driven out of their homes; the process of return is still intolerably slow.

Privatization of apartments in the Federation began in 1997 and was completed by 06.12. 2000; the apartments of returnees, severely damaged apartments, and those built after the war are exempt from this deadline.

In most cases, the apartments were purchased for the certificates (privatization certificates and unpaid soldiers’ wages), that were unofficially traded at about 4 percent of their nominal value.

In the Republic of Srpska (RS), the Law on housing privatization was suspended by the High Representative - OHR in 2000, before it became effective, hence the privatization of apartments legally started on 28.07.2001 when this suspension was lifted.

A particular problem is the maintenance of the apartment buildings where the apartments have already been purchased, since the tenants-turned owners cannot afford to fund the condominium maintenance (i.e. roof, stairwells, elevators, etc.), because they are either unemployed or retired, or, if employed, their wages are low.

Total number of housing units: 1,294.868, of which, according to the first census estimates, 1,034.368 or 79,9 % privately owned and

260.500 or 20,1 % socially owned.

These apartments accommodated 1,203.441 families.

In the period from 1981 till 1990 it was built:

Totally 280.923 apartments, of which 209.292 privately-owned and 71.631 socially owned (The ratio is 74,5 %: 25,5 %).

In the Federation of B-H in 75 municipalities: totally 825.936 apartments, of which

In private ownership: 637.178 or 77,15 % and in social ownership:

188.768 or 22.85 %.

It is well known that there is a great number of destroyed and damaged apartments, out of total number: 447.000 or 57,5 %, and in social ownership 110.885 or 58,75 % (Business Magazine – Minister Morankic).

In Sarajevo there is a total number of 145.019 apartments, of which in collective housing

80.400 or 55,44 % (51.185 damaged) in private ownership,

63.419 or 43,73 % (39.292 damaged) and

cooperative 1.200 or 0,83 % (758 damaged).

The data were obtained from the publication "Kako Sarajevo 2015".

Two main types of ownership existed:

• social ownership
• private ownership.

The social ownership of apartments was possible to achieve in the following ways: by purchase, construction, nationalization, confiscation, inheritance, etc.

The private ownership was possible to achieve by construction, purchase, inheritance, cooperative.

The tenancy right started to be effective in 1945 according to the Law on national committees, established by the Provision from 1953, and finally defined by the law from 1959, but it came out of force for the privately owned apartments and remained effective as established since then. However, the tenancy right over the socially owned apartments was taken over by the Republic law from 1974, and its basis is now used for the law applied in the Federation of B-H.

Who can give out apartments for use:

• state as the Republic of B-H
• municipalities
• enterprises (companies)
• establishments
• former Yugoslav Army

In accordance with the Law, the apartments which are in the category where there is an acquired tenancy right are privatized, except:

• Apartments which are under restitution, and which will be privatized according to the separate law
• apartments which are privately owned, and over which there is a tenancy right, and which are not subject to any law
• heavily war-damaged and destroyed apartments.

Who can sell apartments to the tenancy-right holders:

• enterprises and institutions
• Federal Ministry of defense for the apartments belonging to former Yugoslav Army
• Canton government – for the apartments used by the bodies and organizations of ex Yugoslavia, except the Army apartments
• Government of the Federation of B-H – for the apartments used by the Bosnia-Herzegovina organizations
• Municipalities – for the apartments of the unknown sellers.

The socially owned apartments, in most cases, were associated both in administration and maintenance, into the housing companies. A part of bigger enterprises established their own enterprises, namely services for administration and maintenance. The maintenance was funded from the rental fee fund, and very often the apartment owners and tenancy-right holders invested their own funds for improvement of the living conditions and extension of the living area.

The private owners, as the floor owners in the socially owned apartment buildings used to pay 38 % for maintenance.

Since, according to the Constitution of the Federation of B-H, the housing policy falls within the canton competence, the cantons were obliged, before 6 December 2000, to issue the regulations on maintenance and on leasing of the apartments used by the tenancy-right holders who do not purchase apartments they are living in; that has been done only by the Tuzla and Zenica-Doboj cantons.

The funds obtained when municipality sells apartments:

• 30 % to the municipality budget
• 70 % to the Fund for war victims

• 80 % to the canton, of which 30 % is kept by the canton and 70 % goes to the Fund for war victims
• 20 % to the Federation of B-H, of which 30 % is kept by the Federation and 70 % goes to the Fund for war victims
• the complete distribution of these funds is: 70 % to the Fund, 24 % to the canton, and

6 % to the Federation.

When the enterprises sell apartments: 10 % for the sale costs, and remaining 90 % is distributed as follows: 30% to the enterprise and 70 % to the Fund for war victims, and the total distribution is: 37 % to the enterprise and 63 % to the Fund. The enterprise keeps the funds until the Agency of Privatization accepts its privatization program, and after that the funds go the municipality and city budget for development of the communal infrastructure.

The apartment can be bought by a tenancy-right holder who acquired that right according to the provisions of the Law on housing relations. Both marital partners are the buyers, and they can give a written approval to each other that only one of them is a buyer, but then the discounts on the apartment price are not summed up. A tenancy-right holder can also give a written approval to the household member who meets the conditions from the Law on housing relations, i.e. that he is the apartment user, that he is a member of the household and that he lives in the same apartment.

An apartment cannot be bought by a temporary user who got that apartment for use in accordance with the Law on abandoned apartments. An apartment cannot be bought by a tenancy-right holder – a current user who got a permanent approval for use in accordance with the law on abandoned apartments either.

The former tenancy-right holder, who has an approval to go back to the apartment he left during the war, after he provides all evidence that he does not use someone else’s apartment or house.

The tenancy-right holders who do not buy the apartment that they had the right on, from

the date of 06.12.1999 they have become the lessees of the apartments, under the conditions to be determined in the canton regulations.

The construction price of an apartment is 600 DEM/m² plus the coefficient of location suitability varying from 0,80 to 1,20, what makes the price of 480 to 720 DEM. The Canton of Sarajevo has got prices up to 720 DEM, and other cantons up to 600 DEM.

-non-paid back personal funds for getting a tenancy right

-non-paid out funds for dispossessed real estates in order to acquire a tenancy right

-war damage to the apartment, but 30 % of the construction price at maximum.

Depreciation: 1 % for each year of the building, but 60 % at maximum.

Individual discount: 1 % for each full year of employment period, but 75 % accumulated for marital partners at maximum.

Discount: for each month of service in armed forces (Army of B-H, HVO and Police) - 0,25 %, and for each month spent on duty service and civil defense units during the war situation – 0,12 %.

Special discount: war victims have a discount depending on the category, varying from 100%, 75%, 50% to 25%, and for the work-caused disabled and other types of disabled persons – 80%, 40% and 20%.

Way of payment: for payment in installments from 20 to 25 years (depending on canton), and if paid with money the discount is 20%; for payment in cash at once within 30 days the discount is 21% or 26% in addition to that, depending on the canton. It is 21% in Sarajevo.

• an apartment with auxiliary premises
• common areas and installations in the building
• land under the building
• garage if a constituent part of an apartment or if it is given out in addition to the apartment.

The law came into effect on 06.12.1997.

The law started to be applied on 05.03.1998.

The deadline for submitting the request for purchase is one year from the beginning of application of the Law, i.e. not later than 06.03.1999. It was prolonged and it expired on 06.09.2000.

• money (all at once or in installments up to 25 years at maximum)
• certificates:

- old savings money in foreign currency

- military certificates in foreign currency

- general claims in the process of enterprise privatization

- claims by the pensioners

- restitution.

The canton authorities were obliged to issue the following canton regulations within 30 days after the Law came into effect, i.e. not later than 06.01.1998 (they have already been issued):

- shorter period of pay back (less than 25 years) and lower interest rate (1 % per year)

• training and keeping of books of the deposited contracts
• coefficient of apartment location suitability, varying from 0,80 to 1,20.

The canton parliaments were obliged to issue the following regulations within two years after the law came into effect, i.e. not later than 06.12.1999:

• maintenance of common areas and installation in the building
• leasing of the apartments which are not going to be purchased
• legal status of the apartments under construction.

In case of installment payment, the registration of ownership right is recorded in the land registers – registers of the deposited contracts after the first installment is paid, in addition to the mortgage until the last installment is paid.

The tax applied on real-estate sales is not paid for this type of real-estate sales.

It has decided about cash payment, i.e. with certificates of old savings in foreign currency, with limitations of 60% of the apartment price.

In that way, under the condition that 80.000 of apartments are sold, of average area of

55 m2, with the purchase price of 50 KM/m2, 220 million KM can be obtained for construction of new apartments (80.000 x 55 = 4,400.000 x 50 = 220,000.000). Out of these funds, it is possible to build 220.000 m2 or 4.000 new apartments of average area of 55 m2, with the price of 1.000 KM/m2.

In that way the problem of new construction and the apartments under construction was solved, and it was solved in a simple way, while it was not the case in the Federation of B-H where there is a unique price of 600 KM, and the canton regulations about the ways of determining the price of the apartments under construction have not been issued yet.

The deadline for that expired on 31.12.1999, and there are proposals to prolong it for a year.

In that way it was defined that from 28.07.2001 only lease relations can be established, while in the Federation of B-H this question is still open

The special chapter has defined an institution of lease, in case the apartment was given out after 28.07.2001, what was the deadline for submitting the requests for purchase of the privately owned apartments as well.

In the Federation of B-H, there is a two-year deadline for issuance of the canton regulations, but they have not been issued yet.

It is not possible to purchase a garage together with an apartment, regardless the fact that it was given out together with the apartment or it is, together with the apartment, considered one whole. That means that the garage is subject to the special regulations and there is no purchase discount for it as for the apartments.

In the Federation, garages are sold for certificates as well, with deduction for depreciation rate.

In that way this very delicate question has been solved, thus the apartments are not given back to the previous owners, but they are paid out in KM, and the tenants are enabled to purchase the apartment. In the Federation, this question has not been regulated yet.

In that way one more delicate question has been solved, thus the tenancy right was converted into a lease relation lasting for 5 years, and in the next 5 years the lessee will be provided with an adequate apartment with a right to purchase it, and the apartment will be given back to its owner.

In the Federation, this question has not been regulated at all, but it is left to the cantons to cope with it.

In that way a uniformity with all sellers, regardless the place the apartment is

located at, has been achieved. In the Federation, this question was not regulated, and the forms were published by the Federal agency, Official gazette and other publishers; each of them was publishing its own forms.

With his Decision, the High Representative for B-H has defined that refugees and displaced persons have right to get a discount to the purchase price of apartment in amount of 75%, so that they pay 25% of the fixed apartment price in cash, and 60% of that value they can pay with old savings money in the banks within RS.

The starting price of 280 to 400 KM is pretty low in comparison with the Federation where the starting price is 480 to 720 KM, and it is almost 60% lower price.

Since the entities have their separate laws on housing relations, where there is also a regulation on possibility and way of exchange, under certain conditions, and even with an approval from the lessor, hence this provision is not valid outside the entity of RS, and it

should not have been prescribed in that way because it "smells" like a "human" ethnic cleansing.

All conditions for determining the price for apartments that are built on the already existing buildings (either attic apartment or apartment built out of the premises used for common activities), regardless the period of construction, were regulated in the same way as for the existing building. It would be logical that the price is determined on the date of construction of a new apartment, especially when the apartments built after 31.12.1994 are in question, because there is a lot of new construction going on these days; and depreciation should be calculated in the same way as for the existing building, since if the building is to be knocked down due to age, the newly-built apartment is also knocked down.

The lessee’s right to purchase an apartment has been defined, but it has not been precisely defined when such right can be acquired.

The Law has limited the amount of discounts to 75% totally, and in the Instructions the apartment price, and discount especially, are calculated in a complicated way using some unnecessary formulae:

Ocs = Vs x Kpp x Ksz x Klp x Kpl

Plu + Pen + Prs’ + Prs + Pin + Pcz + Pos + Prp

Klp = 1 - --------------------------------------------------------- > 25

100

(20 – Ug)

Kpl = 1 - -------------

100

The right to purchase an apartment has not been limited, after the returnee moves back. This provision makes a direct misusage possible: to sell the apartment the same day it is purchased and to go back to the temporary residence or, maybe, to the apartment or property belonging to someone else.

In the Federation, that is limited to two years.

The Law has defined the amount of rental fee. That is, however, the matter of the accompanying regulations since it is subject to the faster and simpler changes. Also, the rental fee has been defined at a very low scale, e.g. For an apartment in the zone I, age of 25 years, 50 m2 area, the rental fee is 18,75 to 31,25 KM, and in the zone IV for the same apartment it is 13,00 to 22,00 KM per month.

Most apartments, mainly in the independent and individual buildings, have already been privatized (approximately 80%). Neither institution is competent over such apartments, when maintenance, repair, purchase, sale, construction, etc, are in question. The state is only interfering, through the cantons, in the tax policy.

When the remaining 20% is privatized as well, what is realistic to expect with some 10% in the first round, there will be 90 % of apartments in the private ownership. That will raise a question whether there is a housing policy at all (Re. construction, maintenance, leasing, ownership, etc.).

There is a possibility to come to such situation where the housing fund is privatized and the state does not have any influence on housing policy, what can have a negative effect on new construction of apartments and social policy in this field.

It is our orientation to review the need for issuance of the law on condominium, the institutions of which are not known in this field.

That is the system of maintenance in the buildings where there is a so-called floor ownership over the apartment and the apartment owner is obliged to maintain or pay for the maintenance of the common areas.

If everything is privatized, how will the state solve the social housing policy and policy of housing in general?

Who will build the apartments for leasing and who will be their owners?

What will happen to the apartments owned by the enterprises and not purchased by the tenancy-right holders?

Why the enterprises cannot have their own apartments for lease to their professional employees?

Who will be the owners of the apartments built from the Fund for war victims?