The Chamber of Deputies has adopted an essential legislative proposal aimed at increasing the protection of buyers of new residential properties. The draft law, which amends Law no. 10/1995 on construction quality and the Cadastre Law, directly addresses the need to combat non-transparent commercial practices and the risk of developers failing to meet their obligations.
The most important novelty concerns the way developers manage the amounts received as advance payments (under pre-sale agreements):
Dedicated Bank Account: The amounts paid by the buyer as an advance must be deposited in a bank account opened in the developer’s name, dedicated exclusively to the construction of the project for which the advance was paid.
- Limitarea Cheltuirii (Plafon Ambiguu): Fondurile din acest cont pot fi cheltuite de dezvoltator numai în scopul dezvoltării imobiliare a proiectului și doar cu ștampila „bun de plată” a dirigintelui de șantier sau a persoanei responsabile. Proiectul adoptat stabilește plafoane neclare de cheltuire:
- Maxim 25% din preț, pentru partea de rezistență.
- Maxim 20% din preț, pentru partea de instalații, dar numai după finalizarea structurii de rezistență.
The formula adopted by the deputies is considered ambiguous, differing from the Senate’s original proposal, which included a clearer cap on the total advance requested, staggered according to construction stages (15% at the preliminary agreement, 25% at structural completion, 25% at installation phase).
Sanctions for Violations: Using the advance payments for purposes other than real estate development triggers fines amounting to 1% of the developer’s turnover.
The draft introduces measures that ensure greater transparency and legal protection for buyers through real estate publicity:
Promise to Sell (Pre-sale Agreement): Pre-sale agreements for future residential units must be concluded only in authenticated form (before a notary).
Registration in the Land Book: These preliminary agreements may be concluded only after the building permit is registered in the Land Book.
Pre-apartmentation: The developer may promise the transfer of future individual units only after completing the pre-apartmentation process for the future condominium and opening individual land book entries for the future units.
Preventing Multiple Sales: Notaries will require the registration of the pre-sale agreement in the Land Book. This crucial measure prevents the sale of the same future apartment to multiple buyers simultaneously and ensures transparency regarding rights established over the property.
Clear limits are also introduced for reservation agreements, which often precede pre-sale agreements:
Limited Duration: Reservation agreements may be concluded for a period of maximum 60 days.
Reservation Cap: The amount paid for the reservation may not exceed 5% of the total sale price, under penalty of absolute nullity of the agreement.
Refund of the Amount: If the pre-sale agreement is not concluded within 60 days due to the exclusive fault of the developer, the developer must refund in full the sums received under the reservation, within 30 days.
Compared to the initial form adopted by the Senate, the Chamber of Deputies has removed important provisions that would have offered buyers stronger financial protection:
Privileged Creditor Status: The provision granting the state and the promissory buyer/buyer the status of privileged creditors in the developer’s insolvency proceedings has been removed. This elimination reduces the chances of buyers recovering their advances in the event of the developer’s bankruptcy.
Reduction of Notarial Fees: The provision reducing notarial fees by 25% for buyers assisted by a lawyer when signing the pre-sale agreement or the sale contract has also been eliminated.
These provisions are not yet in force. The draft law requires promulgation by the President of Romania and publication in the Official Gazette in order to become applicable law.