ROMANIA Law and Practice Contributed by: Monia Dobrescu and Mădălina Trifan, Mușat & Asociații
• it identifies the parties; • it indicates the cause of secured obligations; • it accurately describes the mortgaged prop - erty; and • it is authenticated by a notary public. To be enforceable against third parties, mort - gages must be registered in the Land Book. It is important to mention that an asset mortgage also includes any products, rents, constructions, improvements and movable assets naturally linked to the respective immovable asset. Sepa - rately, the financing party may be interested in movable mortgages, mortgages over the shares of the holding company, and mortgages over proceeds or bank accounts. 3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders As a general rule, Romanian legislation does not provide restrictions on granting security over real estate to foreign lenders, nor are there any restrictions on repayments being made to a for - eign lender under a security document or loan agreement. 3.4 Taxes or Fees Relating to the Granting and Enforcement of Security Since the immovable mortgage agreement must be authenticated by a notary public, a notary fee is paid by the mortgagor, the amount of which depends on the value of the secured amount. Another fee must be paid for registering the mortgage in the Land Book (RON100 for each asset plus 0.1% of the amount of the secured debt). The assignment contract regulating the transfer of a debt secured by a real estate mort - gage must also be authenticated by the notary public in order to be valid. The fee for this service
is calculated by applying 0.45% to the value of the assigned debt. In a receivables assignment agreement, the reg - istration fee for mortgages with the Land Book is fixed at RON100. 3.5 Legal Requirements Before an Entity Can Give Valid Security There are legal rules that must be complied with before an entity can give valid security over its real estate assets – financial assistance rules, corporate benefit rules, etc. Romanian law does not allow a joint stock com - pany to advance funds, make loans nor provide guarantees for the subscription or acquisition of its own shares by a third party. However, this provision does not apply to transactions con - cluded by credit institutions and other financial institutions in the normal course of their busi - ness, nor to transactions involving the purchase of shares by or for the company’s employees, provided that such transactions do not result in a decrease in net assets below the cumula - tive value of the issued share capital and of the reserves that cannot be distributed according to the law or the constitutive act. The unilateral undertaking by a company of an obligation – granting a guarantee and creating security, especially in favour of a third party – that reduces its patrimony without obtaining a certain form of consideration in return is a viola - tion of the principle according to which the main purpose of setting up a company is to generate profit. In this case, there is the risk that the secu - rity interest or guarantee may be challenged by a third-party creditor. In addition, if the benefit received by the guar - antor/security provider is not proportionate to
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