1. According to Law no. 165/2013, in the case of properties abusively taken over by the state that cannot be restored in kind, compensation is determined in point equivalents (1 point = 1 leu), by decision of the National Commission for the Compensation of Properties (CNCI), based on the valuation carried out by the National Authority for Property Restitution (ANRP).
2. Law no. 165/2013 has undergone several amendments over time regarding the method of valuation of properties.
3. Initially, the law provided that the valuation of properties was to be carried out by reference to the grids used by public notaries for determining the value of properties (“notarial grid”) applicable for the year 2013, the year when Law no. 165/2013 entered into force.
As the compensation process has extended over a very long period and is still not completed, those values have become anachronistic.
4. Through a subsequent amendment, it was established that the valuation of properties is carried out by reference to the notarial grid from the year preceding the issuance of the CNCI Decision, taking into account the characteristics of the property at the date of its abusive takeover.
5. Given that numerous CNCI Decisions have been challenged before the courts regarding their value, and considering that court proceedings sometimes last several years—during which time the values in the notarial grids may undergo significant changes—through Law no. 223/2024 amending Law no. 165/2013 and Article 24 of Law no. 10/2001, Law no. 165/2013 was amended, the legislator establishing that in judicial proceedings initiated pursuant to Article 35 para. (1) of Law no. 165/2013, the amount of compensation is determined by reference to the notarial grid applicable in the year preceding the issuance of the court decision.
6. The supplementation of the provisions of Article 35 para. (1) of Law no. 165/2013 by Law no. 223/2024 is susceptible to differing interpretations regarding the method of property valuation, in cases where an appeal is filed against the compensation decision issued by the CNCI.
7. By Decision no. 354 of 6 October 2025, delivered by the High Court of Cassation and Justice – CDCD, the Court ruled, with binding force, that in the interpretation and application of Article 35 para. (1) of Law no. 165/2013, the valuation of properties is to be carried out by reference to the notarial grid applicable in the year preceding the entry into force of the court judgment, in disputes concerning an appeal filed against a compensation decision issued by the CNCI, as well as in court judgments delivered following the court being seized with an action seeking the substitution of the CNCI Decision, where the decision of the entity entrusted with the primary examination of the compensation claim has been invalidated or where the CNCI Decision was not issued within the time limit provided by Article 34 of Law no. 165/2013.
8. As regards the characteristics of the property to which the valuation relates and the determination of the number of compensation points, the case-law of the European Court of Human Rights (ECHR), in the case of Văleanu and Others v. Romania (Application no. 59,012/17 and 29 other joined applications), by the judgment delivered on 8 November 2022 and published in the Official Gazette no. 561 of 22 June 2023, states:
235. In this regard, the Court notes that the principle underlying the law, as adopted in response to the pilot judgment Maria Atanasiu and Others, was that of restitutio in natura in respect of all properties (see above, para. 140; and, a contrario, Šimaitienė, cited above, para. 53). Where this was not possible, a subsidiary solution had to be found, either by re-establishing the right of ownership over an equivalent property or by granting compensation, calculated in accordance with the law (see above, para. 140). The legislator thus chose a solution that excluded the setting of a direct cap on compensation, since compensation was to be calculated in accordance with the minimum market value of the property, as established in the notarial grids of 2013, and paid in instalments. This choice was considered by the Court to be in compliance with the Convention (see Preda and Others, cited above, para. 120).
236. However, in 2017, namely after the adoption of the judgment Preda and Others, the legislator added to the valuation criteria—alongside the date of entry into force of the law as the relevant date for valuation—the location and technical characteristics of the property, as they were at the time of expropriation (see above, para. 149). These criteria, together with the prolonged delays on the part of the authorities in finalising compensation claims, may result in the level of compensation no longer being reasonably aligned with the real value of the property, in the absence of other elements capable of compensating, at least partially, for the long period during which the applicants were deprived of their properties [see, mutatis mutandis, Guiso-Gallisay v. Italy (just satisfaction) [GC], no. 58,858/00, para. 103, 22 December 2009], and, first and foremost, for the lengthy period during which they sought to recover their properties since the entry into force of the restitution laws (see, in particular, above, para. 5).
238. Nevertheless, the new valuation system (see above, para. 149), which is based in part on data that were relevant more than 50 years ago and thus at a time when the respondent State was not bound by the Convention (see above, para. 211), may raise difficult and controversial issues in practice, due to information that is sometimes insufficiently relevant regarding the exact description of the property at the time of expropriation, owing, inter alia, to the inherent urban developments that have occurred in the meantime, which must have had at least an impact on the category of land use.
239. Furthermore, the Court notes the finding of the High Court of Cassation and Justice that the law sought to grant the applicants the monetary equivalent of what they would have received had restitution in kind been possible (see above, para. 172 in fine), implicitly considering that any method of valuation other than one taking into account the technical characteristics of the property as they were at the time of expropriation would be unfair and inequitable. However, the Court cannot lose sight of the fact that, had restitution in kind been possible, the applicants would have received possession of a property that would have included at least part of the developments that occurred over time, either of a general nature (urban planning policy), or of a specific nature (for example, redevelopments or renovations); it follows that, in order for the compensation awarded to remain equivalent to the value of the property in kind, it cannot disregard such developments.
243. Taking into account the nature of the proceedings at issue, through which the applicants and/or their predecessors have been seeking compensatory measures for their properties for more than 20 years (see above, paras. 107, 112 and 117), while also having regard to the State’s margin of appreciation in such matters, the Court considers, on the basis of the evidence before it, that there are convincing elements sufficiently demonstrating that the sums awarded to them by way of compensation were not reasonably related to the value of the property, within the meaning of the Court’s case-law [see, mutatis mutandis, Vistiņš and Perepjolkins v. Latvia (just satisfaction) [GC], no. 71,243/01, paras. 35–36, ECHR 2014].
244. In the light of this finding concerning the value of the compensation, which must be assessed in relation to the context underlying the significantly prolonged delays in the restitution process (see above, para. 243, and, a contrario, Šimaitienė, cited above, para. 54), the Court can only conclude that the applicants in applications nos. 59,012/17, 47,070/18 and 21,500/19 were required to bear an excessive individual burden, in breach of the provisions of Article 1 of Protocol No. 1 to the Convention.
9. In line with the above-cited case-law of the ECHR, which is binding on the member States of the Convention for the Protection of Human Rights, ratified by Romania, the Constitutional Court of Romania (CCR) delivered Decision no. 43 of 18 February 2025, which provides:
“Upholds the objection of unconstitutionality (…) and finds that the phrase ‘taking into account the technical characteristics of the property and the category of use at the date of its takeover’, contained in Article 21 para. (6) of Law no. 165/2013 (…), is unconstitutional.”
In the reasoning of the Decision, the CCR states:
“28. In this regard, the Court took note (paragraph 237 of the judgment delivered in the above-mentioned Văleanu case) of the decision of the national legislator to ensure that the level of compensation remains reasonably linked – even if at a minimum level – to the market value of the property at the time the compensation decision is issued.”
In light of these categorical findings of the European Court of Human Rights, the Constitutional Court finds that, in the present case, it is justified to uphold the objection of unconstitutionality and to find the unconstitutionality of the phrase “taking into account the technical characteristics of the property and the category of use at the date of its takeover” contained in Article 21 para. (6) of Law no. 165/2013, as amended by Law no. 111/2017. Objectively, there is a difference between the value of the property obtained by the entitled person when restitution is made in kind, with all the constructive and urban-planning characteristics existing at the date when the property re-enters the possession of the entitled person, on the one hand, and the value that would be obtained where the property can no longer be effectively restored in kind and compensation is granted instead, calculated, however, by reference to the technical characteristics of the property and the category of use it had at the date of its abusive takeover, thereby disregarding the provisions of Article 16 para. (1) and Article 44 para. (2) of the Constitution.
This conclusion is also supported and reaffirmed by a recent decision of the European Court of Human Rights, delivered in the same case – Văleanu and Others v. Romania – this time concerning the just satisfaction to be recognised and awarded to the applicants in the case in which, by the Judgment of 8 November 2022, a violation of Article 1 paragraph 1 of the First Additional Protocol to the Convention for the Protection of Human Rights and Fundamental Freedoms was found. This concerns the Judgment of 7 January 2025, delivered in the case of Văleanu and Others v. Romania, by which, reiterating its observations regarding the ineffectiveness of the compensation system established by Law no. 165/2013, as amended by Law no. 111/2017, the Strasbourg Court also determined the exact amount of compensation that the Romanian State is required to pay to the applicants, by reference to the value of the properties as established by the notarial grids applicable for the year 2024, namely the moment when the judgment was delivered, as well as to the current condition of the properties, and not to their condition at the time of the abusive takeover (paragraph 116).
In order to proceed in this manner, the European Court of Human Rights once again emphasised that, for the compensation awarded to remain equivalent to the value of the property in kind, it had to take into account the developments that had occurred over time with regard to the property in question, whether of a general nature (urban planning policy) or of a more specific nature (for example, refurbishments or renovations). The Court also indicated that taking into consideration the location and the technical specifications of the property at the time of the deprivation of ownership could result in the value of the compensation no longer being reasonably correlated with the real value of the property (paragraph 111 of the Judgment of 7 January 2025).
Moreover, the European Court further specified, once again, in paragraph 115, that in order to ensure that entitled persons are paid adequate compensation, such compensation must be calculated in a manner that remains reasonably related to the market value of the property at the time of the actual payment of the full amount or, as the case may be, of the first instalment of the total amount.
In conclusion, the Constitutional Court finds that the phrase “taking into account the technical characteristics of the property and the category of use at the date of its takeover”, contained in the provisions of Article 21 para. (6) of Law no. 165/2013, infringes the constitutional and conventional provisions that guarantee and protect the right to private property.
The reasoning of the Constitutional Court’s Decision is equally binding, just like the operative part of the Decision.
Therefore, Decision no. 43 of 18 February 2025 of the Constitutional Court, in line with the case-law of the ECHR, provides that the valuation of properties should not be carried out by reference to the technical characteristics of the property at the time of its abusive takeover by the State, but must take into account the current urban development and any renovations or refurbishments of the property, so that the compensation is adequate and calculated in a manner that remains related to the market value of the property at the time of the actual payment of the full amount or, as the case may be, of the first instalment of the total amount.
10. In total disregard of the findings of the ECHR in the judgment delivered in the case of Văleanu and Others v. Romania and of Constitutional Court Decision no. 45/2025, the Government adopted Government Emergency Ordinance no. 38/2025, which, although declaratively brings the provisions of Law no. 165/2013 into line with Constitutional Court Decision no. 43/2024, in reality, GEO no. 38/2025 fails to take into account and flagrantly violates the Constitutional Court’s Decision and the ECHR judgment delivered in the case of Văleanu and Others v. Romania. Thus:
A. Although the ECHR and the Constitutional Court have established that abusively taken property must be restored in kind, in its current condition—a provision also found in Law no. 10/2001 as well as in the land restitution laws—Government Emergency Ordinance no. 38/2025 provides that properties whose value has increased by up to 50%, for example through a change in urban planning regulations, are not to be restored in kind unless the person entitled to restitution first pays the State the increase in value (a provision that is profoundly unjust also from the perspective that the State has used the property for 80 years, while the owner was deprived of its use, and that, had the State not abusively taken the property, the increase in value would have accrued to the owner’s patrimony).
B. With regard to the compensation established for constructions, the values from the notarial grids applicable in the year preceding the CNCI Decision or the court judgments are no longer applied; instead, reduced values by 30%, 50% or 90% are used, calculated by reference to the highest value in the grid (without this term being clarified). Thus:
a) for residential buildings constructed before 1977, a coefficient of 0.7 is applied;
b) for residential buildings made of non-thermally treated materials, a coefficient of 0.5 is applied;
c) for areas within constructions without a residential purpose, a coefficient of 0.1 is applied;
d) the built-up area of the property shall be taken into account. If it is not known, the provisions of the Fiscal Code shall apply (habitable area × 1.4 – editor’s note).
Thus, the value of residential properties is not the one set out in the notarial grid, but a value reduced by 30%–90%.
For commercial or industrial premises, the value determined in accordance with point B above is used, with the following adjustments:
a) for commercial premises – 1.2;
b) for industrial premises – 0.8;
c) for areas within constructions with another purpose – 0.1.
c) for areas within constructions with another purpose – 0.1.
1. For intravilan land classified as “yards–constructions”, the value of the compensation is determined by using the maximum value provided in the notarial grid for the year preceding the issuance of the CNCI compensation decision, applicable to land occupied by constructions (even if the land is physically free – editor’s note), with the application of the following adjustments:
a) for areas larger than 1,000 sq m – 0.8;
b) for areas larger than 5,000 sq m – 0.5;
c) for areas larger than 10,000 sq m – 0.2.
Thus, the value of the compensation is reduced, without any justification, by between 20% and 80%.
2. For agricultural land located within intravilan areas, the following adjustments are applied to the values determined in accordance with point 1 above:
a) for arable land – 0.5;
b) for vineyards/orchards – 0.7;
c) for pastures/meadows – 0.2;
d) for forest land – 0.3;
e) for unproductive land – 0.1.
3. For agricultural land located in extravilan areas, the value of the compensation is determined by using the value set out in the public notaries’ grid, and if there are no different values depending on the category of use, the following correction coefficients apply:
a) for arable land – 1;
b) for vineyards – 1.4;
c) for orchards – 1.2;
d) for pastures/meadows – 0.6;
e) for unproductive categories – 0.2.
D. Thus, even if at the time of nationalisation the State took over from the owner a new property with superior finishes, under “restitutio in integrum” pursuant to Government Emergency Ordinance no. 38/2025, the entitled person will obtain a maximum of 70% of its value, after 80 years of deprivation of use!
Moreover, with regard to land, even if the plots are free of any constructions, without any objective justification, the compensation value applied is that established for land occupied by constructions, which is significantly lower, contrary to what was established by the ECHR in the judgments delivered in the case of Văleanu and Others v. Romania.
11. According to Government Emergency Ordinance no. 38/2025, compensatory measures are to be paid in instalments spread over a period of 7 years, by amending the provisions of Law no. 165/2013, which had established payment in equal instalments over a period of 5 years. This provision applies retroactively, including to compensation decisions already issued by the CNCI.
12. Government Emergency Ordinance no. 38/2025 retroactively amends the manner in which compensation is paid to persons who have purchased the compensation rights established by the CNCI Decision from the entitled persons.
Article 31 of Law no. 165/2013 is amended and shall have the following wording:
“(2^1) In the event of the transfer of the rights recognised by the compensation decision, the transferee shall be entitled to a number of points equal to the sum of the price paid to the former owner or to his/her legal or testamentary heirs for the transfer of the points and a percentage of 15% of the difference up to the value of the acquired points.
(2^2) Where the price paid cannot be determined, the transferee shall be entitled to 15% of the value of the acquired points.
(3) On the basis of the request submitted by the holder of the points, the National Authority for Property Restitution issues payment titles over a period of seven consecutive years, in equal annual instalments, within the value established by the compensation decision. The payment titles are issued in the chronological order of the issuance of the compensation decisions.
(3^2) By way of exception to the provisions of paragraph (3), the holder of the points may opt to redeem the points in cash, in a single instalment. In this case, the National Authority for Property Restitution shall issue a single payment title for 40% of the amount of points established by the compensation decision or, as the case may be, of the remaining points to be redeemed.
(4^1) The amount of the sixth and seventh instalments shall be updated by applying the consumer price growth index for non-food goods for the period between the issuance of the payment title relating to the fifth instalment and the last payment title. The amount resulting from the update shall be included in the final payment title issued by the National Authority for Property Restitution.
Article II of Government Emergency Ordinance no. 38/2025 provides:
“(1) The provisions of Article 31 paras. (2^1), (2^2) and (3) of Law no. 165/2013 on measures for completing the process of restitution, in kind or by equivalent, of properties abusively taken over during the communist regime in Romania, as subsequently amended and supplemented, as amended and supplemented by the present emergency ordinance, shall apply accordingly also to compensation decisions which, on the date of entry into force of this emergency ordinance, are in the procedure for redeeming points in cash.”
13. We consider that these provisions are contrary to Constitutional Court Decision no. 43/2025, as well as to the case-law of the ECHR, in the case of Văleanu v. Romania, which establishes that the reparatory measures paid by the State must be reasonably related to the current market value of the property, without making any distinction between holders of claims against the State.
Thus, where the entitled person has transferred by agreement the compensation rights established by CNCI Decisions, the transferee of the compensation rights, who is subrogated to the original holder, will receive only 15% of the compensation rights, paid in instalments over 7 years, plus the value of the price paid for the claim.
The amendments and additions made to Article 31 of the Law by Government Emergency Ordinance no. 38/2025 infringe the right of ownership over the compensation established by the CNCI Decision, which constitutes a possession within the meaning of the Convention; they also infringe economic freedom and the right to free initiative, as well as the principle of non-retroactivity of laws, by establishing measures amounting to the nationalisation of 85% of the claims against the State acquired through agreements lawfully concluded.
(i) According to Article 1 of the First Additional Protocol to the Convention, a treaty to which Romania has acceded and which forms part of domestic law, with priority application in the event of conflict with domestic legislation pursuant to Article 20 of the Constitution of Romania:
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his property except in the public interest and subject to the conditions provided for by law and by the general principles of international law.”
(ii) Article 20 of the Constitution of Romania provides:
“(1) The constitutional provisions concerning the rights and freedoms of citizens shall be interpreted and applied in accordance with the Universal Declaration of Human Rights, with the covenants and with the other treaties to which Romania is a party.
“(2) If there are inconsistencies between the covenants and treaties concerning fundamental human rights to which Romania is a party and domestic laws, international regulations shall prevail, unless the Constitution or domestic laws contain more favourable provisions.”
(iii) At the same time, Article 44 of the Constitution of Romaniai provides:
“(1) The right of ownership, as well as claims against the State, are guaranteed. The content and limits of these rights are established by law.
(2) Private property is guaranteed and protected equally by law, regardless of its holder.
(…)
(4) Nationalisation or any other measures of forced transfer of assets into public ownership are prohibited (…)”
(iv) Article 45 of the Constitution provides:
“Free access of a person to an economic activity, free initiative and the exercise thereof under the conditions laid down by law are guaranteed.”
In the present case, the restriction of the right of ownership in the event of the transfer of rights recognised by compensation decisions issued by the CNCI, and the transfer of those rights into the State’s patrimony in a proportion of 85%, flagrantly violates the provisions of Articles 44, 45 and 53 of the Constitution of Romania and constitutes a serious interference with the right of property and with economic freedom and free initiative, which are essential in a democratic society.
14. The manner in which the provisions of Government Emergency Ordinance no. 38/2025, Constitutional Court Decision no. 43/2025, and the method of determining compensation in accordance with the case-law of the ECHR in the case of Văleanu and Others v. Romania will be applied will constitute a real challenge for the courts and for the CNCI.
- It is evident that the CNCI will apply the valuation method established by the provisions of Government Emergency Ordinance no. 38/2025, without taking into account the findings of the ECHR judgment and of Constitutional Court Decision no. 43/2025 regarding the principle that compensation must be determined in accordance with market value.
- The provisions of Government Emergency Ordinance no. 38/2025 are binding on the courts from the moment of their publication in the Official Gazette.
At the same time, the decisions of the Constitutional Court are binding on the courts pursuant to Article 147 of the Constitution of Romania, just as the judgments of the ECHR are binding on the member States pursuant to Article 46 of the European Convention on Human Rights.
- According to Article 20 of the Constitution of Romania:
“(1) The constitutional provisions concerning the rights and freedoms of citizens shall be interpreted and applied in accordance with the Universal Declaration of Human Rights, with the covenants and with the other treaties to which Romania is a party.
(2) If there are inconsistencies between the covenants and treaties concerning fundamental human rights to which Romania is a party and domestic laws, international regulations shall prevail, unless the Constitution or domestic laws contain more favourable provisions.”
- As shown above, Constitutional Court Decision no. 43/2025, in line with the judgment delivered by the ECHR in the case of Văleanu and Others v. Romania, establishes that “the level of compensation remains reasonably linked, even if at a minimum level, to the market value of the property at the time of issuance of the compensation decision.” (paragraph 28 of Constitutional Court Decision no. 43/2025; paragraph 237 of the ECHR judgment delivered in the case of Văleanu and Others v. Romania).
15. In our view, we consider that the court seized with an action based on the provisions of Article 35 of Law no. 165/2013—by which the entitled person challenges the value of the compensation established by the CNCI Decision—or seized with an action in which the entitled person requests the court to order the CNCI to issue the compensation decision in accordance with the value of the compensation in points determined by the court, must order the preparation of an expert report whereby the expert establishes both the value of the abusively taken property in accordance with the criteria set out in Government Emergency Ordinance no. 38/2025, as well as the market value of the abusively taken property at the date of the expert assessment.
16. Under these circumstances, if there is a difference in value between the two methods of determining compensation, the court must apply the provisions of Article 20 para. (2) of the Constitution, giving priority to international regulations—in this case, the case-law of the ECHR in the case of Văleanu and Others v. Romania—which enshrines the rule that compensation must be established in a manner reasonably related to the current market value of the abusively taken property.
Attorney Valentina Topor Vârban
55 Mihai Eminescu Street, Sector 2, Bucharest
+40 314 253 931 | office@vtclaw.ro | www.vtclaw.ro