6 Things to Know Before Buying Property in Romania

Do you want to buy property in Romania? Before taking this step, find out what aspects you need to pay attention to when deciding to purchase an immovable asset, such as a land, a house or an apartment.

Confirm that the property is listed in the Land Register

What is the Land Register? According to Law no. 7/1996 of the cadastre and real estate advertising, the cadastre and the land register form a unitary and mandatory system of technical, economic and legal records, of national importance, of all the buildings on the entire territory of Romania. This system is designed to be able to identify the owners of real estates and to have an overview of the location and tax value of lands and buildings in public or private ownership.

Thus, the first very important aspect that you need to take into consideration is that in order to sell, donate or conclude another real estate transaction at the notary office, the property that is the object of this transaction must have the cadastral documentation done beforehand and it must already be registered in the land book. If the immovable asset does not have such documentation, its owner must first contact an authorized cadastral expert, who can undertake the necessary steps so that the documentation and the registration are done.

Therefore, before signing a sale-purchase contract for a property, make sure you ask the seller to show you the land book extract that certifies the legal registration of the property. This document is essential to verify the verity of the data, indicating the name of the current owner of the property.

Verify who the owner of the property is

Before deciding to conclude the contract for purchasing an immovable asset, you must always check if the one from whom you want to buy the property is the true owner of the property In this respect, although the verification of the property title may seem to be the solution, this method does not always provide a guarantee of up-to-date data.

For example, A, the former owner of an apartment, which he had alienated to C, now wants to sell it to B. At B’s request, A shows him the ownership title of the real estate, that consists of the contract by which he had acquired the property. A does not mention anything to B about the fact that he had already sold the apartment to C. B, being certain that the information he received is true, signs the contract with A.

What should B have done to avoid falling in such a trap? In order for B to have known the exact legal situation of the property, he should have checked the land register, by requesting the issuance of a land register excerpt from the Land. This document shows the legal status of the property at the issuance date. By verifying it, B would have found out information such as: the area and the plan of the building, the name of the owner, the holders of other real rights over the building, as provided by the Law no. 7/1996 of the cadastre and real estate advertising. Every person, even without justifying any interest, has the right, according to art. 883 para. (1) of The New Civil Code, to request the issuance of a land book extract for informative purposes.

Moreover, if the property you intend to purchase is registered in the land register, and you do not perform these checks, you will not be able to invoke the ignorance of the real legal situation of the property, as established in para. (3) of the aforementioned article: (3) No one may invoke the fact that he was not aware of the existence of any registration made in the land register or, as the case may be, of an application for registration registered at the office of cadastre and real estate advertising.

Suppose, for example, that C registered in the land book the property purchased from A, and B bought the same building from A without checking the land book extract, in which C appears as the owner of the real estate. In this situation, in a possible dispute between B and C regarding the action for the recovery of possession, B will not be able to invoke the fact that he relied on the property title as shown by A.

Sign the contract at the notary

According to Romanian law, the conveyance of real rights regarding a real estate can be done only in authentic form, through a document drafted and acknowledged by a Civil Law Notary, this being a validity condition of the contract. A contract concluded under private signature cannot realize the transfer of the property right, such a contract of sale is null, it does not  produce any legal effects. This act can be a promise of sale at most, which is an act that will constitute the basis for the subsequent conclusion of the sale-purchase contract either at the notary office or by court decision.

Verify the real estate’s encumbrances

In order to avoid any unpleasant surprises that may arise in the future regarding a property, you must also check, through the aforementioned land book extract, if the property you intend to purchase is free or not of encumbrances. The situations are various and complex, thus we will try to present some relevant hypotheses.

You must pay attention to mortgages or other warranties that may encumber the property. If the property is mortgaged, the mortgagee can foreclose it no matter who the current owner is and regardless of the real rights established after the registration of his mortgage. Although, according to the legal provisions, the subsequent acquirer of the property who is not personally liable for the mortgage claim may, under certain conditions, oppose the sale of the mortgaged property, it is still preferable to know the legal status of the property before signing the purchase contract.

Another situation you could encounter would be that in which the real estate would be encumbered with an inalienability clause. What is an inalienability clause? It is the clause inserted in a contract or in a will which prohibits the alienation of an asset for a maximum period of 49 years and if a serious and legitimate interest exists. Suppose, in other words, that A sells a good to B, providing for B to pay a life annuity to C. In order to protect the interests of the annuitant, of C, A may include an inalienability clause in the contract of sale, which will be noted in the land register for third parties opposability. In this situation, if B does not respect the inalienability clause and sells the good, both A and C can request the annulment of this last act of alienation, according to art. 629 paragraph (2) of the New Civil Code.

Provided you want to buy a house or an apartment, you should know that if, when the purchase is completed, the property is already leased and the lease is noted in the land register, the tenant’s right is opposable to the acquirer of the property. In other words, if the apartment to be bought was previously rented to a person, you, the new owner of the real estate, cannot ask the tenant to vacate the apartment, the lease being still valid.

We can also add the hypothesis in which, although you bought the property and you are its rightful owner, you may not be able to fully benefit from the prerogatives of the property right, because another person has, for example, a right of usufruct, which offers the usufructuary the possibility to use the property and to obtain its so-called „legal fruits” (rents), just like the owner.

Therefore, given the diversity of situations that may arise regarding the legal status of a real estate, a prior verification of the land register is particularly necessary.

Special sale rules for agricultural lands located outside the built-up area

Regarding the sale of these lands, the legislator established special rules, provided by Law no. 17/2014 on some measures to regulate the sale of agricultural land located outside the built-up area and to amend Law no. 268/2001 on the privatization of companies that manage public and private land owned by the state for agricultural purposes and the establishment of the State Domains Agency.

The law establishes that when such a land is put up for sale there are 7 categories of pre-emptors, who have the right to acquire the real estate with priority. If within 45 days from the publication of the sale offer at the headquarters and on the website of the town hall of the administrative-territorial unit where the land is located, none of the pre-emptors expresses their intention to buy the property, the land may be sold to certain natural or legal persons (the conditions they must meet are included in art. 4 ^ 1 of Law no. 17/2014). If the latter do not manifest their intention to accept the offer within 30 days from the expiry date of the previous 45-day period, the land may be sold to any natural or legal person.

Therefore, provided you want to purchase such land, if you do not find yourself in any of the categories of pre-emptors established by law (art. 4 of Law no. 17/2014) and you do not meet the conditions provided in art. 4 ^ 1, you must wait until the expiration of the legal term in order to be able to express your intention to buy.

Limits of ownership towards neighbours

Before buying a real estate in Romania, you should know that, although the property right is absolute, exclusive and perpetual, its exercise knows certain juridical limits, be they conventional, judicial or legal. While the conventional limits are established through the autonomy of the parties, by contract, and the judicial ones are established by the court under certain conditions provided by the New Civil Code, the legal limits, enshrined in art. 602-625 of the New Civil Code are established by the legislator in the neighborhood relations.

For example, if you buy a real estate that is close to the public road, and the owner of your neighbouring property does not have access to the public road, your neighbour has the right to cross your property in order to get to the public road. This right ceases to exist only when the dominant fund, belonging to your neighbour, acquires another access to the public road.

The obligations of the owner arising from the neighborhood relations are mainly related to the common partitions between the funds, such as the walls or the common ditches. The owners of both neighboring funds must contribute in proportion to each property’s right to the construction and maintenance of the common partitions. The only way not to be bound by such an obligation is to waive ownership of the common partition.

In conclusion, the acquisition of a property in Romania represents a legal operation that implies the fulfillment of some substantive and formal conditions necessary for the valid transfer of the property right in your patrimony.

If you would like to address more questions or if you need a legal consultation, you can contact us at office@rrpb.ro or by accessing our site www.rrpb.ro for more information.

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      Posted August 23, 2021 3:27 pm

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