May 13, 2019

Legislative changes in construction in Romania

On May 12, 2019 entered into force Law no. 97/2019 that supplemented the list of obligations under the Romanian legislation on construction quality.

Following entering into force of said Law, any buildings undergoing construction (both new investments or works on existing buildings on which the use was suspended during construction works) will be made available for utilization only after the official (administrative) reception upon termination of works has been properly performed. This provision is applicable to both owners of the new buildings as well as real estate developers.

The failure to observe the new obligations is considered a misdemeanour offence and is sanctioned with an administrative fine of RON 20,000 to RON 40,000 (approximately EUR 4,200 to EUR 8,400).

It must be noted that prior to the amendment, it was a practice for the real estate developers in Romania to allow usage by the purchasers / tenants of the buildings still undergoing construction (e.g. before the reception upon termination of works being finalized).

As this amendment seems to be adopted mostly for the protection of the clients in the residential market, it is estimated to have an important impact over the entire real estate industry in Romania.