[BUYING AND SELLING REAL ESTATE IN ROMANIA]
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the real estate is its true owner/holder. The registered owner is only presumed to own a valid title until proven otherwise by an interested person. If any of the current owner’s/holder’s predecessors’ rights over particular real estate suffer from any defect in title, such defect survives the subsequent right transfer and affects the right of the current owner/holder. Thus, under Romanian law, if the ownership title over real estate is cancelled, all subsequent acts of the ownership transfers might also be cancelled by Romanian courts, at the request of interested persons. Cancellation of the subsequent acts may be requested at any time, no statute of limitations is provided by Romanian law in such cases, in consideration of the fact that property right is guaranteed under the Romanian Constitution. Nevertheless, according to the Land Book Law, if no deficiency arises from the analysis of the relevant Land Book, a third party may no longer be deregistered after three years from the moment the last owner was registered in the Land Book. This provision is applicable only if the third party is at least the third owner registered for that particular Land Book – i.e., if the Land Book is newly opened, this should not apply, and the third party may be deregistered at any time. Consequently, in practice, as the safeguarding of concluded transactions is preferred, it becomes more difficult to amend the content of the Land Book and implicitly, to challenge the ownership title once the aforementioned conditions are met. The seller should disclose any relevant hidden defects in the property itself or in the property rights. If the buyer intends to build on the land, verifications should be made in order to assess the existence of restrictions on building in that
area (general, zonal, and detailed urbanism plans). Note that a permit is, in most cases, needed for building, as well as for demolition. If the acquired land is agricultural, its type may be changed to buildable, in order to be able to actually build on it, by requesting modifications to the zonal urbanism plans – if the land is outside the city limits. However, in consideration of Law 175/2020, which entered into force on 13 October 2020, this operation has to be carefully assessed as it might be extremely difficult to amend the zoning urbanism plans and to move the land within city limits. In the light of the aforementioned, it is strongly recommended to undertake a due diligence investigation prior to proceeding with real estate investments in Romania.
ILN Real Estate Group – Buying and Selling Real Estate Series
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