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InfoBusiness Romania - online guide
Real estate property

Short history of the real estate property regime in Romania

The new Constitution adopted in 2003 sets out a number of warranties with respect to the right to private property and the content and limits of this right are set out under special law. The Constitution provides that private property should be equally protected, regardless of the holder.

Under Law no. 18/1991 of the real estate fund, almost 90 percent of Romania's arable land, previously controlled by cooperatives, was transferred into private ownership. It provides that the lands acquired by means of the establishment of ownership right may not be assigned for 10 years. With respect to the construction sector, buildings erected with state funds (generally after 1950) could be held after 1990 by their dwellers as payers of rent to the state. The sale prices for such buildings, scheduled for long periods (regularly 25 years) reflected the rent already paid by the dwellers, as well as the condition of the respective buildings. Recently, Law no. 10/2001 regulated the status of real estate (lands and buildings) taken over in an abusive manner during the period from 1945 1989; the rule used was the in-kind return of such real estate, and the exception the payment of compensation (cash or shares/assets of the companies in the patrimony of which the respective goods were transferred).

Public property and private property

The Constitution adopted in 2003 regulates the basic legal regime for property, as it provided that the state protects the property, which property may be either public or private (article 135).

According to the Constitution, public property is such property that belongs to the state or to the administrative-territorial units. The constitutional legal regime of public property is directed by the principle of inalienability, the imprescriptible nature and the immunity from seizure of the goods that represent the object of the public ownership right. The same legal regime may also be found in the special laws adopted to this effect, that is to say Law no. 213/1998 regarding public property and Law no. 219/1998 regarding the concessions' regime.

As a principle, article 135 paragraph (5) of the Constitution provides that the goods that represent public property may either be granted in administration to or to the public institutions, or they may be concessioned or leased.

Private ownership is not limited, and it may be established over any good, except for such goods that are with drawn from the civil circuit and represent a part of the public domain. The current Romanian Constitution provides, in article 135, that "private property is inviolable" and that "no one may be expropriated unless it is due to a case of public need, set out under the law and accompanied by a rightful and prior compensation".

The main normative acts that regulate the regime of the private property are as follows: The land fund Law no. 18/1991 as amended and supplemented by Law no. 167/1997 and Law no. 1/2000, and Law no. 215/2001 of the local public administration.

Non-residents' right of ownership

Foreigners (individuals or legal entities) may obtain the right of ownership over lands, said prohibition being provided under both the Constitution and the Land Fund Law. Lands may be held, currently, not solely by individuals who have Romanian citizenship and a residence in Romania, and legal entities of Romanian nationality, which have headquarters in the country but also by the foreign entities.

Although the law does not expressly specify this issue, in Romania, buildings may be obtained with no restriction both by Romanian and foreign citizens. In the event that a non-resident should purchase a building, such non-resident obtains a superficies right over the land placed under the building.

As far as investors legal entities, either resident or non-resident, are concerned, according to article 6 of Law no. 241/1998 for the approval of the GEO no. 92/1997 regarding the stimulation of direct investments, the same may obtain the right of ownership over the real estate, on two conditions: the building must be necessary for carrying out the activity of the legal entity and the activity for which the building is necessary must comply with the social object set forth in the constitutive documents.

An exception from this provision is real estate land, which, in accordance with the constitutional norms, may solely be held by Romanian individuals or legal entities. However, to be able to own lands, foreigners may establish to this effect a Romanian company that they fully control (typically, a limited liability company).

Concession of the real estate property

Law no. 219/1998 regulates the regime of the concession of goods that are public or private property of the state, county, city or commune on the basis of a contract the duration of which may not be longer than 49 years, under which contract the concessionaire transfers to the concessionee, which acts on its own risk and responsibility, the right and obligation to exploit a certain good, in exchange for a royalty.

The concession contract

The capacity of concessionaire is held by the holders of the right of ownership over goods that represent public property. The capacity of concessionee is held by any individual or legal entity of private law, either Romanian or foreign.

The duration of the concession is set depending upon the period of repayment of the investments that are to be made by the concessionee. Romanian law, while imposing a time of 49 years, also provides for the possibility of extension of the same by means of the mere agreement of the parties, for a period equal to a maximum of half the initial period. Upon the expiration of the concession term, the concessionee is obligated to return the concessioned good unencumbered, including the investments made.

The contractual relation between the concessionaire and the concessionee is based upon the principle of financial balance of the concession, and upon the achievement of a potential equality between the advantages granted to the concessionee and the charges imposed upon the same.

The concession contract contains:

- a statutory part (which contains the clauses set out in the tender book),

- a conventional part (which contains the clauses agreed upon by the parties in addition to the tender book and without contradicting the objectives of the concession, as set forth in the tender book).

It is important to note that this contract is concluded in compliance with, and governed by, Romanian law, regardless of the concessionaire's nationality or citizenship.

The two concession methods set out by Law no. 219/1998 are public tender (either open or open, with pre-selection) or direct negotiation (applicable in the event that the public tender failed to result in the designation of any winner, the concessionaire appointing the concessionee by direct negotiation, in certain conditions).

Romanian legislation also contains provisions that are applicable in particular situations, such as:

- the concession of lands and buildings located in vacant areas;

- the concession of lands for construction, provided for under Law no. 50/1991 regarding

- the authorization of construction erections;

- the concession of the lands with agricultural destination, as provided for under Law no. 268/2001.


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