Real estate transactions in Romania — whether residential, commercial or land acquisitions — often appear straightforward. In practice, however, they carry significant legal, fiscal and structural risks. A poorly investigated transaction can lead to loss of ownership, unexpected litigation, tax exposure or blocked development projects. The sales contract is not "the safest contract"!
We have relevant experience in real estate, consolidated both through our work in a notary office and through constant collaboration with technical experts and architects. In this context, we can offer you a comprehensive and well-founded legal opinion for the purchase, sale, or rental of a property.
This guide explains, shortly, what the law requires, where risks typically arise, and how to structure a transaction defensively.
1. Verify ownership – never rely on appearances
What the Law Says
According to Romanian law, ownership of real estate can only be transferred if it is registered in the land registry, with the exception of property acquired through inheritance. A land registry extract for authentication is mandatory at the time of sale before a notary public, which is valid for only 10 days and can only be obtained by a notary public. However, anyone can request an information extract (online or at the OCPI) to check who the registered owner is, what property is registered in the land registry (area in documents, registered area, etc.), what the owners' shares are (if there are several), by what act the ownership right was acquired, whether there are any encumbrances (debts, easements, disputes noted in relation to the property).
The buyer is also obliged to check the title deeds presented by the seller, to verify the land areas in the deeds, in the land registry, and, most importantly, on site. There are many situations in which, due to the buyer's lack of diligence, they find themselves in the unfortunate situation where, after paying the price and taking possession of the property, they discover that they have actually purchased less than they thought, that the property boundary is different from that indicated, or that portions of the land are unavailable (easements, utilities, rights of way), and legal remedies become difficult, costly, and time-consuming.
The role of the lawyer at this stage is to ensure that the transaction is based on a rigorous verification of the documents and legal status of the property, that the seller has the right to dispose of the property, that the property is free of encumbrances or that the risks are known and assumed, that the area and cadastral identification correspond to the reality on the ground, and that all contractual clauses effectively protect your interests (price, term, guarantees, penalties, delivery, conditions precedent, etc.).
Please note! The land registry extract does not replace a complete verification of the title deed and transfer history, cadastral documentation, legal and urban planning status, as well as the actual situation on the ground.
What aspects are verified from a legal perspective?
- Titleholder: Is the seller the registered owner in the land registry and does he/she have the right to dispose of the property?
- Encumbrances and restrictions: are there any mortgages, liens, seizures, foreclosures/registrations, or other encumbrances that encumber or restrict the property?
- Disassembly and limitations of use: is the property encumbered by usufruct, use, habitation, easements (right of way/utilities, etc.) or other real rights of third parties?
- Disputes/litigation relating to the property: are there any legal actions or enforcement proceedings relating to the property or ownership rights, recorded in the land register (including pending proceedings)?
Hidden Risk
There are cases where:
- The property is in dispute, but the dispute has not been noted in the property's land registry.
- The impossibility of building on that land, for various reasons.
- In the case of sellers who are legal entities (here we can talk about many risks), insolvency claims, foreclosures initiated prior to the sale, etc.
- Heirs who have not been called to inherit.
What you gain by checking properly: certainty of title and protection against future ownership disputes.
2. Urban planning regulations and building compliance – risks that are not immediately apparent
In real estate transactions, verifying the urban planning regime and the building permit status is not an insignificant detail, but a condition of legal certainty: an unauthorized (total or partial) building, one that does not comply with the permit or has not been accepted, can lead to delays in financing, registration, and, in certain situations, litigation or administrative measures.
Key Documents
- Urban planning certificate (to understand the urban planning regime and conditions applicable to the property)
- Building permit (including the approved design and any provisions/modifications).
- Completion report upon completion of the works (and, where applicable, final acceptance).
- Updated cadastral documentation and registration status (land + construction).
Common Problems
- Exceeding authorized indicators/parameters (area, footprint, height, setbacks).
- Additional floors/rooms built without authorization.
- Change of use (e.g., from annex to dwelling/from technical space to living space) without following the legal procedure.
- Expired authorization or execution outside the authorized period (with risks at reception and certification).
Possible legal consequences
- Administrative penalties and measures.
- The property may become impossible to mortgage.
- In litigation, lack of urban planning compliance can become a major obstacle to enforcing rights over the building, and interested parties may request demolition of the building.
What you should do: conduct technical and legal due diligence before signing any pre-contract/sales contract.
3. The Pre-Contract (Promisiunea de Vânzare) – More Than a Formality
Many prospective buyers sign a preliminary contract and pay a significant deposit without proper legal analysis, unaware of the risks of lack of information, unjustifiably believing that the deed drawn up by a notary cannot cause any problems later on or that the notary automatically "guarantees" the legal status of the property and the seller. In reality, the preliminary contract has important legal effects, and the clauses regarding the advance payment, the deadline for concluding the contract, the conditions precedent (credit, missing documents), penalties, and guarantees can make the difference between a secure transaction and a costly dispute.
Essential Clauses to Negotiate
- Clear deadline for concluding the final contract and, very importantly, the clauses of the final contract.
- Penalties for delay.
- Conditions for refunding the advance payment.
- Express obligation to remove encumbrances.
- Conditions of sale.
- The exact subject matter of the contract: complete identification (cadastral number, land registry number, if any), areas, shares, annexes/parking space/storage room, inventory included (furniture/equipment), especially in the case of future assets.
Risk
If poorly drafted:
- You may lose the deposit.
- You may be forced to litigate for years.
- You may be locked into an unfavorable price.
- You may have to wait years for the handover.
- Read the entire document at least twice!
Strategic advantage: a properly structured pre-contract protects both timeline and financial exposure. Words fly away, writing remains!
4. Optimization of tax structure and corporate structure in commercial transactions
For commercial or high-value real estate:
Consider
- Is the seller/buyer a natural or legal person?
- VAT regime: is the transaction taxable, exempt, or subject to reverse charge?
- The actual subject of the transaction: is only the property being transferred, or a business (assets + contracts + tenants)/goodwill?
- Transaction structure: asset deal (purchase of property/assets) vs. share deal (acquisition of shares/stocks) – which reduces long-term risks and costs?
Risk
Improper structuring can lead to:
- Unforeseen VAT obligations.
- Additional tax costs.
- Exposure to personal liability.
- Assumption of hidden liabilities.
In commercial transactions, the structure is established before signing (ideally, even before the preliminary agreement) in order to avoid unexpected tax costs and to allocate risks correctly through guarantees and indemnities.
5. Financing and eligibility for credit
If the transaction involves financing:
- Banks request unencumbered land registry extracts.
- They verify the legality of the documents and evaluate the property.
- They request insurance and the registration of the mortgage in the land registry.
- They verify the contractual clauses.
6. Litigation and Enforcement Risk
Before closing, verify:
- Ongoing lawsuits involving the seller, if they exist.
- Insolvency status (especially for corporate sellers).
- Enforcement proceedings.
Purchasing from a seller close to insolvency can result in future transaction annulment under claw-back rules.
7. Practical Due Diligence Checklist
Before signing anything:
- Obtain updated Land Book extract.
- Verify cadastral measurements.
- Review building permits and urbanism compliance.
- Check seller’s solvency.
- Review fiscal implications.
- Negotiate contractual safeguards.
- Ensure escrow or staged payment if appropriate.
8. What You Risk If You Skip Legal Review
- Buying a property with hidden debts.
- Losing deposit money.
- Owning an unmarketable asset.
- Being involved in long-term litigation.
- Paying significant unforeseen taxes.
Real estate disputes in Romania often originate from insufficient pre-contract analysis rather than bad faith.
9. For your safety and peace of mind, consult a lawyer before signing any document that involves a promise, a preliminary agreement, or a sale and purchase agreement.
- Validity of the transaction and reduction of the risk of hidden defects.
- Bankable property.
- Bargaining power.
- Reduced tax exposure.
- Predictability and long-term protection of the investment.
A real estate transaction is not just a notarial act — it is a complex legal operation involving real estate law, urban planning regulations, tax law, and contractual strategy.
The difference between a safe investment and a problematic purchase almost always lies in the thoroughness of the checks carried out before signing.
Professional legal review before making a commitment is not an additional cost — it is a risk management tool.