E&C Law Firm is specialized in real estate law, due diligence procedures as well assistance with all the necessary procedures related to the transfer of a Romanian real estate property. As we have been on the market for over 10 years, our law firm possesses important experience in this field. We have represented foreign clients for hundreds of property transactions in the country and we therefore believe it’s important to outline a few basic tips that anyone purchasing Romanian real estate should take into account.
1) All real estate property transfers are done through a Romanian Public Notary
We have had quite a few clients who were actually not aware that all property transactions must be performed through a local Public Notary’s office. (Some of these clients were unfortunately even under the impression that they own certain properties in Romania to which they had gained ownership through non-authenticated contracts!). All real estate buy/purchase transactions that are not notarized are not valid.
An important NOTE: Public Notaries have the task of authenticating documents. They do not and do not have the responsibility to protect neither buyer nor seller from certain clauses, practices or issues related to the property.
2) Check the ownership of the property before going forward with the transaction.
It is very important to perform a background check on the ownership of any Romanian property before committing to the purchase. This verification is also recommended before signing even a formal pre-contract (this type of contract between the parties does not have to be notarized to be valid) and signing usually implies payment of an advance-fee.
Ownership verifications will have to check whether the signatory of any agreement is in fact the true/sole owner of the property in question, check for any mortgages on the property etc. This type of verification can be performed by requesting a Land Registry Extract for the property in question, a step for which our attorneys can represent you. Please note however that in order to solicit this Extract we will have to have a copy of the title (sale/purchase agreement or similar) or at least a Land Registry Number. If these details are missing one can also obtain an Extract by performing certain investigations with the local city hall. In this case however we will have to know the exact location of the property and the investigation may take a few weeks.
3) Perform a verification to check whether the property is not involved in any litigation.
On-going litigations on certain properties might give a potential buyer big headaches. Purchasing a property with a status which depends on a judge’s decision implies big risks which you should be at least aware of. This verification is somewhat difficult since the search should be contacted with different institutions and is therefore advisable to hire a lawyer for this step.
4) Reviewing past transactions of the real estate property in question
A very diligent approach should also include checking the property’s last transactions to gain an idea on certain risks (for instance if there are any unclear issues on the legality on past sale/purchase agreements the new owner can risk being sued in the future). It is also very important to note that all private real estate property in Romania was formerly owned by the State and the return of these properties to private owners have generated a series of nationwide lawsuits which are still going on.
5) Check to see whether the physical location of the property coincides with official details
This verification is predominantly important when purchasing Romanian agricultural land as many times plots of the land do really have the surface which the buyers (or even the Land Registry) claim. This is not necessarily because these parties are ill-intentioned but simply because the physical reality differs from often outdated records. This type of verification should be done by an experienced real estate valuator (our law firm can provide some recommendations).
6) Verify for any oil or gas pipes, cables etc. that might be located on your property
These types of works can hinder you from fully using your property. For instance one cannot build on certain pipes or cables.
7) Verify whether your agricultural land is truly compact
There is a rush of foreign investors purchasing Romanian agricultural land in Romania, however these types of transactions are not without risk. One of the most frequent is the fact that seldom large plots of land are compact. Mostly the larger plots are in reality made out of smaller properties with separate owners.
The above are just a few examples of what should be verified purchasing real estate in Romania. If you require in-depth information please contact us to be able to provide a personalized list.