ROMANIA Law and Practice Contributed by: Monia Dobrescu and Mădălina Trifan, Mușat & Asociații
2.2 Laws Applicable to Transfer of Title In addition to the main sources of real estate law, the following legal provisions should be taken into account regarding transfer of title: • Law No 36/1995 regarding notaries public, as subsequently amended; • Company Law No 31/1990, as subsequently amended; and • the Romanian Fiscal Code. Romanian law does not include specific laws for different types of real estate; the applicable laws will be the same, regardless of whether the transfer of title concerns a property in the residential, industrial, office, retail or hotel sector. Notwithstanding the general rule, certain spe - cific conditions must be fulfilled in order for cer - tain types of real estate to be validly transferred (agricultural land, patrimonial assets, etc), to be assessed on a case-by-case basis. 2.3 Effecting Lawful and Proper Transfer of Title There are several ways to carry out a lawful and proper transfer of title: • transfer agreement authenticated by a notary public; • donation; • inheritance; • adverse possession; • accession; • public tender procedure; and • court ruling. After the completion of the cadastral works per administrative unit, the acquisition of the prop - erty right will be conditional upon the registra - tion of the relevant transaction in the Land Book. Until then, the registration is only enforceable against third parties. This is especially important
if, for example, there are two or more buyers of the same real estate, who have concluded differ - ent agreements with the same owner by which ownership exclusive rights have been trans - ferred. The rule is that, if acting in good faith, the first to register the right in the Land Book has the preferred title. In light of the laws that applied to real estate during the communist regime, investors could be exposed to certain risks, so some choose to protect their investments by concluding insur - ance policies. This practice is on the rise but is not yet common in Romania. 2.4 Real Estate Due Diligence As a precautionary measure, buyers usually per - form real estate due diligence before purchasing a property, covering fiscal, legal, technical and/ or environmental matters. The purpose of the legal due diligence is to identify and anticipate any impediments. Buyers are interested in ana - lysing the validity of the ownership chain, permit - ting aspects, environmental legal issues, corre - sponding corporate approvals, etc. The lawyer’s role is to recommend appropriate solutions to protect the title and, if necessary, to assist the parties in implementing them. 2.5 Typical Representations and Warranties Romanian legislation obliges the seller to pro - vide warranty against eviction (meaning any loss of possession or ownership rights over the property, in whole or in part, due to a successful claim in court by a third party to a real right over the property) and against hidden defects (exist - ing or caused before/at the time of handover, but which could not be discovered by a diligent buyer without specialised assistance).
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