If you are looking to buy a vacation or second home or invest in Romania, Transylvania or in the Black Sea and you are a foreign citizen/investor, there are several aspects you should know about the procedures and costs for the acquisition of Romanian land or Romanian homes.
After 2012, foreign nationals EU citizens (non-Romanian) can buy a house or apartment in Romania can freely buy and sell any Romanian property, without restrictions. Along with the selling price of a property, buying real estate in Romania has other costs associated with it.
If you have chosen to work with a Romanian real estate agent/broker, you can expect an additional commission of around 2-4% of the property price. The local tax will be 2-4% of the property price. The signing of the contract must be witnessed by a public notary who submits it for certification by the Land Registry Office in charge of real estate records. The fee for a Romanian public notary is about 0.5-1% of the purchase price. You must also pay a fee to the Land Registry Office (“Cartea Funciara”) to register the Deed of Transfer. The Romanian Land Registration Fee for the purchase of a property will vary from 1-3% according to the length of time the seller owns the property and the value of the property.
Romanian property law states that Citizens of EU member states, legal entities incorporated in EU member states, and stateless persons domiciled in EU member states can purchase land in Romania only if the land is used for secondary residence or for secondary headquarters after a period of 5 (five) years from Romania’s accession to the EU (starting January 1, 2012); only for agricultural land and forest land for a period of 7 (seven) years from Romania’s accession to the EU (started January 1, 2014).
But for Citizens, legal entities and stateless persons who are not from EU member states, the Romanian legal system stipulates that they can purchase land in Romania, under the conditions of an international agreement between Romania and the country of origin regarding these persons, in under basic reciprocity.
In our view, a wise investor would hire a Romanian lawyer/Romanian Law Firm, who would be in close contact with a notary on title verification, obtaining Land Registry quotations and drafting agreements for transfer of ownership of the real estate. This means that a Romanian lawyer will only act for and be responsible to his client, whereas a notary will not have the same level of responsibility to the buyer.
Under Romanian law there are three basic rights to land and buildings such as property rights; usufructuary rights as leases, usufructuary rights, property rights; concession rights. The principle of contractual freedom is at the heart of property law in Romania.
Sometimes, the investor/buyer may choose to close a pre-sale agreement, in which the seller promises to transfer ownership to the buyer on a specific date in exchange for an agreed consideration. The content of the pre-sale contract will set out all commercial and legal requirements for the transfer of ownership, as conditions that precede the final transfer of ownership. Closing the pre-contract for the purchase does not mean the transfer of the property, but establishes binding obligations for the parties, such as for example, damages or penalties set forth in it, if the seller refuses to sign the final contract. the notarized deed of transfer at the agreed time limit.
The closing of the pre-sale agreement is to protect investors/buyers from possible purchases to other buyers and matters regarding the fixed price and duration of future purchases. In our view, it is imperative that a pre-sale agreement be drawn up in a Notary Public and clearly stipulates the selling price and other clauses regarding the term of future purchases. In this case, it can be enforced in court at the request of the buyer as a deed of transfer of ownership.
The sales agreement signed in Romania, according to Romanian law, shall stipulate: the obligations of the parties to fulfill the contract of sale, conditions of delivery and quality of goods and/or services, terms, methods of payment and guarantee of payment, instrument of payment and insurance price, risk of the contract , as well as the method of settling litigation ultimately arising from the contract. Other required elements include the full name and identification details of the parties (for a legal entity) and the name of the person signing the contract (representing a legal entity).
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