Documents needed for a real estate deal in Romania
Florian Ionescu, Wednesday, 22 January 2014
This article is part of a series of 8 articles about buying property in Romania. The other articles in the series cover the following topics:
The development of the Romanian real estate market since its accession to the European Union in 2007 has forced the Romanian government to improve the laws on real estate transactions. Therefore, today, both Romanian investors and foreign investors benefit from simplified real estate buying proceedings. This article deals with the documents they need for their transactions on this market to be valid and some other details related to this aspect.
Documents needed for real estate verifications
The real estate verifications constitute the second stage of the buying process after the selection of the real estate by the investor. They should be carried out by experienced lawyers and target the following documents and aspects:
The preliminary contract acts as a promise made by both parties involved in the transaction to conclude the full sales-purchase contract for the target real estate within the established price limits. This contract is usually consistent with the full sales-purchase contract and contains the following data:
The full sales-purchase contract
As mentioned above, the full sales-purchase contract usually does not bear too many modifications as compared to the preliminary contract. It constitutes the agreement through which one party transfers the property owned to the other for an established price and it is mentioned in book 3, chapter I, art. 1294 of the Civil Code. The law stipulates the obligations of both the selling party and the buying one.
The documents needed for the conclusion of the full sales-purchase contract include: On the developer’s part for new constructions:
The verification and validation of the documents
The Romanian law and the real estate proceedings can be quite misleading for any investor, whether Romanian or foreign, which is why contacting a lawyer to handle them is highly recommended. They can understand the selling and buying process to the last detail – a process which is not quite at hand for anyone, especially for foreign investors – and can handle both the documents and the verifications properly.
A lawyer’s role in the real estate buying and selling process starts with the verifications they have to carry out before issuing the contracts. They have the obligation to check the authenticity of the title deed presented by the seller, to look for any charges or liabilities the seller might owe to any third parties, to provide legal advice to both of the parties involved in the transaction, to provide assistance with the payments or funding opportunities and finally, to handle the registration proceedings, this being the last stage of the buying and selling process.
Notaries play an equally important role in real estate transactions, constituting a decisive factor in the validation of the transaction. They are responsible with the verification of any legal documents issued throughout the transaction period and must be present at the time of their signing by the parties involved. Should one of the parties not be available to sign the contracts, they can appoint their lawyer to handle this aspect through a Power of Attorney.
This article is part of a series of 8 articles about buying property in Romania. The other articles in the series cover the following topics:
The development of the Romanian real estate market since its accession to the European Union in 2007 has forced the Romanian government to improve the laws on real estate transactions. Therefore, today, both Romanian investors and foreign investors benefit from simplified real estate buying proceedings. This article deals with the documents they need for their transactions on this market to be valid and some other details related to this aspect.
Documents needed for real estate verifications
The real estate verifications constitute the second stage of the buying process after the selection of the real estate by the investor. They should be carried out by experienced lawyers and target the following documents and aspects:
- Title deeds (basic due diligence)
- Land survey documents (basic due diligence)
- The extract from the Land Registry (basic due diligence)
- Documents proving whether the property is involved in any litigations (in-depth due diligence)
- Records of the charges and liabilities owed by the seller
- Documents confirming the origin of the property
- Mortgage and loan terms/guarantees
- The building permit (for new and old property)
- The project registered with the City Hall in copy (for old property)
The preliminary contract acts as a promise made by both parties involved in the transaction to conclude the full sales-purchase contract for the target real estate within the established price limits. This contract is usually consistent with the full sales-purchase contract and contains the following data:
- Identification details – full names of the parties (NP, LP), date/birthplace (NP), fiscal identification number (NP, LP), residence (NP)/headquarters (LP), working points (LP), etc.
- Description of the real estate – category, area rating, plans, borders, urban development compliance, construction year, occupancy and release conditions if needed
- Transaction value and payment methods and terms
- The notary in charge with the conclusion of the sales-purchase agreement
- Existent debt, mortgages and loans
The full sales-purchase contract
As mentioned above, the full sales-purchase contract usually does not bear too many modifications as compared to the preliminary contract. It constitutes the agreement through which one party transfers the property owned to the other for an established price and it is mentioned in book 3, chapter I, art. 1294 of the Civil Code. The law stipulates the obligations of both the selling party and the buying one.
The documents needed for the conclusion of the full sales-purchase contract include: On the developer’s part for new constructions:
- Unencumbered documentation of the land on which the building is situated, title deed
- Building permit
- Real estate register
- Utility contracts with profile companies
- Articles of incorporation
- Fiscal registration certificate
- The sales argument of the Company Shareholders’ General Assembly
- Tax registration certificate
- Identity card/Passport (NP)
- Articles of incorporation (LP)
- Fiscal registration certificate (LP)
- The purchase argument of the Company Shareholders’ General Assembly (LP)
The verification and validation of the documents
The Romanian law and the real estate proceedings can be quite misleading for any investor, whether Romanian or foreign, which is why contacting a lawyer to handle them is highly recommended. They can understand the selling and buying process to the last detail – a process which is not quite at hand for anyone, especially for foreign investors – and can handle both the documents and the verifications properly.
A lawyer’s role in the real estate buying and selling process starts with the verifications they have to carry out before issuing the contracts. They have the obligation to check the authenticity of the title deed presented by the seller, to look for any charges or liabilities the seller might owe to any third parties, to provide legal advice to both of the parties involved in the transaction, to provide assistance with the payments or funding opportunities and finally, to handle the registration proceedings, this being the last stage of the buying and selling process.
Notaries play an equally important role in real estate transactions, constituting a decisive factor in the validation of the transaction. They are responsible with the verification of any legal documents issued throughout the transaction period and must be present at the time of their signing by the parties involved. Should one of the parties not be available to sign the contracts, they can appoint their lawyer to handle this aspect through a Power of Attorney.
All types of property for sale in Romania by private sellers and estate agents. Find your perfect apartment, house or farm on the Black Sea coast or in the Carpathian Mountains.
This article serves as an introduction to the taxes afferent to real estate investments by foreigners within the Romanian territory. It deals with the
different kinds of taxes levied on the acquisition of property or land whether as a non-resident individual or via a limited liability company
headquartered in Romania.
More articles