[BUYING AND SELLING REAL ESTATE IN ROMANIA]
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methodological the implementation of the law are unclear, still raising many questions from the notaries who are supposed to authenticate sale purchase agreements (i.e., the first sale purchase agreements according to the new law were concluded starting in July 2021). Clarifications are being sought by notaries from the relevant ministries, which are expected either to clarify the norms by amending them or to provide to the notaries a manual of good practice. IV. Transfer of Ownership norms for As a general rule, the property right transfers automatically upon the execution of the agreement, unless the parties have otherwise agreed (e.g., until fulfilment of conditions precedent). The registration in the Land Book is made for opposability purposes only and is to be carried out by the public notary following the execution of the agreement. Certain rules shall come into effect after the finalization of the cadastral works on all land in Romania. Specifically, once the entire cadastral works for all land in Romania are finalized (a date which is difficult to estimate at this stage), the registration of the property right transfers with the relevant Land Books shall no longer be performed for opposability purposes only but shall become constitutive of a right (i.e., the transfer will operate as of and on the basis of the registration with the relevant Land Book). In relation to brownfield/greenfield renewable power generation projects, the project company must secure, already from the development phase, a title to land proper for building purposes, which would
typically be ownership right or superficies right. A legal difficulty may be encountered in rooftop solar projects (if the owner of the building is not the owner of the land as well) given that the legal definition of superficies relates to land. V. Agents Both parties may use a real estate agent. In general, the agents conclude mainly exclusivity agreements. The general commission on the market today is approximately 1-3% (depending on the value of the transaction). VI. Forms of Ownership In general, Romanian and EU individuals/entities may own land in Romania. While there may be some restrictions for other foreigners to own land in Romania, the practice for foreign investors is to incorporate a Romanian legal entity which has no restriction on owning lands. The “right of ownership” gives the owner the power to possess, use and dispose of the property. A. Acquisitions A real estate deal in Romania may be made either (i) by way of an asset deal (direct acquisition of an asset) or (ii) by way of a share deal (acquisition of the shares in the holding entity of the asset). Share deals are often preferred to asset deals due to cost and tax optimization purposes, as they are not subject to the fees and costs entailed by an asset deal, as they do not entail the transfer of ownership of the real estate. However,
ILN Real Estate Group – Buying and Selling Real Estate Series
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