ILN: BUYING AND SELLING REAL ESTATE - AN INTERNATIONAL GUIDE

[BUYING AND SELLING REAL ESTATE IN ROMANIA]

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KEY FACTS OF REAL ESTATE ACQUISITIONS UNDER ROMANIAN LAW

I. Types of Real Property Transactions A. Purchase of an undeveloped plot of land (agricultural); B. Purchase of a buildable plot of land (with or without a building); C. Purchase of a building without the land (with superficies right over the land); D. Purchase of a flat (condominium); E. Purchase of a company having real estate assets. II. Major Content of the Purchase Agreement The contract must include parties’ identities, description of the real estate (address, surface area, buildings, cadastral number, and Land Book registry number), purchase price (which must be serious – not derisory, real – not fictitious, and determined or determinable), as well as the main obligations of the parties (i.e., to transfer the property rights and to pay the price). The rest of the contractual provisions are, in principle, freely negotiated between the parties: conditions precedent, transfer date, risk allocation (with certain legal exceptions), guarantees, payment date, etc. III. Conclusion of the Purchase Agreement Validity requirements on the form of the purchase agreement. All in rem rights over real estate (including ownership) must be transferred through authenticated agreements concluded before a Romanian notary public, under the sanction of absolute nullity of the agreement. The notary public may be chosen by either of the parties. An agreement relating to rights in rem over a real estate property located in Romania must be governed by Romanian law.

The persons who sign the agreement before the notary public must have proof of identity (ID Card, Passport, etc.) and, if the case may be, proof of power of attorney (which must also be authenticated by a notary public and must expressly give power to sell/purchase the specific property). If the buyer/seller is a legal entity, proof of status of the company must also be provided. The notary shall verify the status of the property and shall obtain an authentication excerpt from the relevant Land Book which shall block any further registrations in the Land Book until the agreement is registered after signing. All the Land Book registrations/de- registrations in respect of the ownership title shall be carried out by the notary public. The parties will sign only one copy of the agreement which remains in the notary public’s archives. The notary shall provide as many duplicates as necessary, which shall be only signed by him/her. It should be noted that in Romania there are certain pre-emption rights or other statutory (imposed by law) limitations potentially applicable in relation to some specific categories of real estate properties (outside city limits, agricultural). Examples include pre- emption rights of the State, of the tenants of agricultural land or public service providers (public schools, hospitals), neighbours, etc. Land near the borders may be sold only with the prior approval of the Ministry of Defence. The rules for the exercise of the pre-emption right have been changed (the amendment entered into force on 13 October 2020), and they have become more cumbersome. The methodological norms for the implementation of the law are unclear, still raising many questions from the notaries who are supposed

ILN Real Estate Group – Buying and Selling Real Estate Series

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