Authors: Roxana Roman, Partner, Head of Real Estate & Construction and Antonia Nica. Senior Associate, Real Estate & Construction, Wolf Theiss

A new legislative change to Law no. 17/2014 on certain measures regulating the sale of extra muros agricultural land, which also amends Law no. 268/2001 on the privatisation of companies that manage public and private state-owned land for agricultural use and the establishment of the State Domains Agency ("Law 17"), has been proposed in the Romanian Senate with the aim of introducing a new category of pre-emptors: owners of land adjoining extra muros arable land, regardless of the emplacement thereof within or without the city limits and regardless of the category of use of such lands. 

The draft is subject to debate and approval and will be sent to the Chamber of Deputies, which is the decision-making chamber. 

Although marketed as a clarification, the proposed legislative change seems to deviate from the purpose of the law, which is to merge agricultural land to further facilitate the growth of farms and establish economically viable holdings. 

We foresee whether the legislative proposal presented to the public will be open to criticism / vulnerable, as it does not seem to be based on the current social concerns that underpinned Law 17 in its current form. We specifically refer to the latest amendments to Law 17, which have generated a transactional deadlock about which we have written extensively and which does not seem to be in the spirit of the law and , implicitly prohibits the free sale of extra muros agricultural land.

Over-regulation of the categories of pre-emptors may have a negative impact on the purpose of the law and may cause (even more) practical difficulties in applying Law 17, which signals a move away from the intended legislative stability and efficiency. 

The proposed legislative change artificially extends the categories of pre-emptors. The existing categories of pre-emptors are regulated on the basis of subjective criteria, such as family relationships on the one hand, and objective criteria, such as favouring agricultural investments and holdings and encouraging agricultural activities/production among young people, on the other. 

Granting a pre-emption right to the anticipated category within the limits set by the proposed legislative change does not appear to fall within the above criteria. Unless the neighbouring intra muros land is agricultural, we do not see how the acquisition of the ownership right over arable extra muros land by the owner of intra muros land that has a category of use other than arable, is beneficial for agricultural development.

The law already provides sufficient mechanisms that allow neighbours to obtain ownership rights over extra muros plots of land.

If we were to accept that the owners of a neighbouring intra muros plot of land should have a pre-emption right, the respective beneficiaries would find themselves in a superior position than the category of the potential buyers, who are subject to much more restrictive conditions when acquiring ownership of extra muros arable land. 

Further, we consider that the legislative change should also explicitly address the permitted use of the extra muros arable land following acquisition by intra muros neighbours, in order to avoid a legislative void which may potentially generate confusion and result in multiple interpretations.