Government revises rules for the privatization of state-owned property: What changes for appraisers, former owners, and the sales process?

The Government has approved significant amendments to Decision of the Council of Ministers (DCM) No. 926, dated December 29, 2014, revising the procedures for the privatization and transformation of state-owned property. The changes affect almost every stage of the process, from property valuation methods and procedural deadlines to the treatment of former owners and the administration of properties that remain unsold.

These amendments aim to accelerate privatization procedures, increase transparency, and reduce administrative delays while introducing new responsibilities for institutions and experts involved in the process.

Higher Fees for Property Valuation Experts

One of the most significant changes concerns the remuneration of experts responsible for valuing state-owned property.

Under the new rules:

• For properties valued at up to ALL 10 million, the expert will receive a fee equal to 5% of the property's value, with a minimum payment of ALL 100,000 (excluding VAT).

• For properties valued above ALL 10 million, the fee will be 4% of the property's value, with a minimum of ALL 500,000 and a maximum of ALL 1 million (excluding VAT).

Another important innovation is that payment will only be made after the valuation report has been submitted and approved by the competent authorities. This measure is intended to enhance professional accountability and improve the quality of valuation reports.

Property Valuation Will Be More Closely Aligned with Market Prices

The amendments also affect the methodology for valuing properties that are not included in the official property price map.

In such cases:

• the valuation will be based on the actual market value;

• the official property price map will be updated and confirmed every six months by the Property Treatment Agency (ATP);

• the valuation expert will bear full responsibility for both the methodology applied and the final value determined.

This change is intended to reduce subjective interpretations and increase the credibility of the valuation process.

Privatization Procedures Expected to Move Faster

The Government has significantly reduced the deadlines for preparing valuation reports.

The maximum deadlines are now:

• buildings and industrial facilities: reduced from 60 days to 30 days;

• machinery, equipment, and vehicles: remains unchanged at 20 days.

The shorter deadlines are intended to eliminate delays that have often hindered the auctioning of state-owned properties.

Greater Responsibility for Administrators of State-Owned Enterprises

The decision expands responsibility for managing the financial obligations of enterprises undergoing privatization.

In addition to company executives, responsibility will also be borne by:

• administrators;

• liquidators of state-owned enterprises and joint-stock companies.

The decision also changes the remuneration system for individuals responsible for collecting outstanding obligations after privatization, linking their compensation to the salaries of the enterprise itself rather than to the local public administration.

The Property Treatment Agency (ATP) Takes on a Stronger Role

Another major amendment strengthens the role of the Property Treatment Agency (ATP).

Before any property is offered for auction, verification by the ATP will become mandatory to confirm whether there are any ownership claims or pending property restitution proceedings.

This mechanism is intended to prevent legal disputes and the sale of properties that may be subject to restitution or compensation claims.

Procedures for Former Owners Are Simplified

The decision introduces several changes that directly affect former property owners.

Among the main amendments are:

• notifications will no longer be published only in physical form but also on the official website of the responsible ministry and in the Official Bulletin of Public Notices;

• the deadline for former owners to submit the required documentation is reduced from 30 days to 15 days;

• verification of documentation will be centralized within the authority responsible for the sale of the property, eliminating multiple interinstitutional procedures.

These changes are intended to accelerate the process and reduce bureaucracy.

Right of First Refusal Restored

One of the amendments with the greatest impact is the restoration of the right of first refusal for former owners, including in cases involving state-owned companies under liquidation.

Previously, former owners participated in auctions under the same conditions as any other bidder. Under the new rules, they will once again enjoy the right of first refusal in accordance with the legislation governing property restitution and compensation.

This amendment is considered an important step toward protecting the interests of former property owners.

Unsold Properties Will Be Used for Physical Compensation

Changes have also been introduced regarding properties that fail to sell.

If a property:

• has been offered at auction at least three times; and

• fails to attract a buyer within 12 months,

it will be proposed to the Property Treatment Agency (ATP) for inclusion in the physical compensation fund for former property owners.

This mechanism aims to prevent unsold properties from remaining inactive for years while making them available for the property compensation process.

What Are the Expected Effects of These Changes?

The new package of amendments seeks to modernize the procedures governing the privatization of state-owned property by combining greater efficiency, transparency, and legal certainty.

On the one hand, shorter deadlines and simplified procedures are expected to accelerate privatization. On the other hand, the strengthened role of the Property Treatment Agency, the restoration of the right of first refusal for former owners, and the increased accountability of valuation experts are intended to create a more reliable process with fewer legal disputes.

If implemented effectively, these amendments could have a significant impact not only on the administration of state-owned property but also on enhancing legal certainty and improving the efficiency of Albania's real estate market.

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