Significant percent of population live in low-rise residential buildings. Energy efficiency of new houses is embodied in national regulations; proves on adequate energy performance represent the prerequisite for construction permit obtaining. Achieving energy efficiency in existing low-rise residential building, on the other hand, is more complex and problematic. By reviewing existing legal framework and taking into account the state on field, this paper aims to propose new methodology for energy performance improvement in existing low-rise residential sector (on the example of Montenegro and Serbia) . Proposed problem solution is oriented towards both the additional legal actions and deeper understanding of social and economic impacts as barriers to energy efficiency achievement.