[BUYING AND SELLING REAL ESTATE IN ROMANIA]
211
of the production capacity in the existing location); ➢ the diversification of the output of an establishment through products that have not been previously manufactured in that plant or a fundamental change in the overall production process of an existing establishment. For foreign investors, pending a FDI Screening clearance by the Romanian Competition Council based on the positive recommendation issued by the Commission for Foreign Direct Investment Screening (“CFDIS”), a standstill obligation is provided under the FDI Law, meaning that any acquisitions of real estate that qualify as foreign investments in the economic sectors mentioned above cannot be implemented. For EU investors, the FDI Law does not currently provide for a standstill obligation or related gun-jumping fines; however, the Romanian Government may prohibit the investment if it affects the security or public order of Romania or is likely to affect projects or programs of interest for the EU. IV. Transfer of Ownership Generally, 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. The new Land Book registration regulation that entered into force on February 14, 2023, expressly stipulates that photovoltaic panels erected on buildings or other similar surfaces do not have to be registered in the Land Book. With this added clarity on the matter, photovoltaic panels can now be installed without legal hassle or doubt on structures including, but not limited to, constructions, constructive elements of road or rail transport infrastructure, constructive elements of building networks, elements of irrigation infrastructure, etc. 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
ILN Real Estate Group – Buying and Selling Real Estate Series
Made with FlippingBook Online newsletter