Fabian Demicoli

Romania Real Estate (Part 1)

 Q: Please briefly describe the main laws that govern real estate in Romania.

The Romanian Constitution provides the main principles that govern the real estate regime in Romania.

 

Other main laws governing real estate in Romania are:

The Romanian Civil Code.

Law No. 18/1991 on lands.

Law No. 7/1996 regarding cadastre and real estate publicity.

Law No. 247/2005 regarding the reform in justice and property domains.

Law No. 312/2005 regarding the obtaining of ownership right over land by foreigners, stateless individuals and foreign companies.

Special laws regarding the restitution of real estate abusively taken over during the communist regime.

Q: What is the impact (if any) on real estate of local common law in Romania?

The Romanian legal system is civil law based, and, consequently, there is no impact of local common law on real estate in our country.

Q: Are international laws relevant to real estate in Romania?

As a general rule, international laws are not relevant to real estate in Romania.

As an exception, the provisions of the international treaties concerning the protection of fundamental human rights (e.g. ownership rights) signed by Romania may have preference over domestic law.

Q: Are there legal restrictions on ownership of real estate by particular classes of persons (e.g. non-resident persons)?

Romanian law does not provide for any restrictions regarding the ownership right of foreigners and stateless persons over buildings.

As regards land:

the citizens of EU countries, stateless persons domiciled in an EU country or in Romania and companies established under the laws of an EU country, which are resident in Romania, may acquire land in Romania, other than agricultural land, forests and forester land, immediately after Romania's accession to the EU, under the same conditions as Romanian citizens and companies.

By exception, farmers who exercise independent activities and who are citizens of an EU country and resident in Romania,or stateless persons domiciled in an EU country and resident in Romania or domiciled in Romania, are entitled to acquire the above mentioned lands (i.e. agricultural land, forests and forester land) as of the date of Romania's accession to EU;

the citizens of EU countries, stateless persons domiciled in an EU country or in Romania and companies established under the laws of an EU country, which are not resident in Romania:

may acquire land in Romania for the purpose of establishing subsidiary residences/subsidiary headquarters only five years as of the date of Romania's accession to EU;

may acquire the ownership right over agricultural land, forests and forester land within seven years as of the date of Romania's accession to EU;

foreign citizens, stateless persons and companies from a state that is not an EU member may acquire land in Romania under the terms of international treaties and subject to reciprocity, or by means of legal inheritance.

Q: what are the types of rights over land recognized in Romania. Are any of them purely contractual between the parties?

Romanian regulation provides for two main categories of property, each having a special legal regime:

(a) private property;

(b) public property.

The main types of rights over land are:

ownership right;

right to use (e.g. lease, use, usufruct, commodatum);

easements (e.g. right of way);

security rights (e.g. mortgages).

The rights over privately owned land are generally transferred/established on a contractual basis, but the Romanian law provides for specific imperative rules concerning such transfer/establishment. Consequently, we may not state that such rights are "purely contractual".

The public property right over land has a special and restrictive regime.

Q: Is all land in Romania required to be registered? What rights are unregistered?

All plots of land in Romania should be registered with cadastre authorities, fiscal authorities and the Real Estate Register.

Registration with the Real Estate Register is performed in order to enable third parties to verify the description, location, the owners of the land, and the existence of mortgages, encumbrances or rights of third parties regarding such land.

Registration with the cadastre authorities is performed only based on specific measurements executed by authorized topographic experts in order to establish the accurate surface of the land, the neighbors and the legal regime (agricultural/constructible, located outside/within the city boundaries) of such and in order to attribute a sole identification cadastral number to the land.

The main purpose of the land registration with the fiscal authorities is to enable the Romanian State to collect the local tax on land, irrespective of the nature of the right.

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