The draft Urbanism Code – the major reforms regarding the building permits require legislative accuracy
Oana Badarau and Ioana Waszkiewicz, PeliPartners

The proposed reforms regarding the Code of land planning, urbanism, and constructions – the Urbanism Code – are substantial and potentially useful. However, for successfully implementing such reforms, additional legal accuracy is required, according to an analysis by the law firm PeliPartners.

The draft law entered parliamentary debate in April 2023. The topic of permitting construction works has been one of the most active areas in the last 20 years from a legislative point of view – since its second republication in 2004, Law no. 50/1991 regarding permitting the execution of construction works underwent not less than 51 changes. Therefore, preparing a unitary legal framework addressing the practical problems is a challenge.

As a general note, although the exercise of merging the construction legislation is, in theory, a useful one, the draft Urbanism Code, in its current phase, does not deal with some of the practical situations which have beenrepeatedly flagged by the private sector, nor does it include some of the articulate solutions from the current legislation, the authors opting for the complete restructuring of the entire field. Given that the draft is currently under consultation and debate, so a working document, it is imperative that the actors involved in the legislative process consider completing and clarifying the Code so that the result addresses these aspects in a coherent and correct manner", explains Oana Bădărău, partner and practice coordinator Real Estate & PPP PeliPartners.

The Draft Urbanism Code brings together, in a single document, three main normative deeds, respectively the Urbanism Law no. 350/2001 (“Law no. 350/2001”), Law no. 50/1991 regarding permitting the execution of construction works ("Law no. 50/1991") and Law no. 10/1995 regarding the quality in constructions, as well as a series of other secondary legislation. 

The PeliPartners analysis focuses on the main provisions regarding permitting the execution of construction works. “The authorities need more legislative accuracy to clarify the intention of the legislator in certain cases, to avoid a legal vacuum in other cases and to integrate into the new Urbanism Code the measures implemented so far in Law no. 50/1991 with respect to renewable energy projects”, explains Ioana Waszkiewicz, Senior Associate Real Estate & PPP PeliPartners.

Draft law regarding the Urbanism Code

The draft is considered by the initiator to be the most important regulatory act in construction in the last 20 years and represents a reform undertaken by Romania in the National Recovery and Resilience Plan (PNRR), an instrument through which Romania intends to attract funds from the Recovery and Resilience Mechanism of the EU for essential investments and reforms aiming sustainable recovery and to improve economic and social resilience.

As regards the issuance of building permits, the Draft Urbanism Code comes with new working instruments: establishing a National Platform for urban and territorial planning and building permitting, with a single national window for building permitting, establishing the National Register of Constructions as database for monitoring and ensuring construction performance. Moreover, it lays the foundations for simplified procedures for both single-family homes and complex projects.

Simplifying the endorsement/permitting procedures and reducing the time for obtaining the building permit

One of the main reforms brought to the attention of the public by the draft initiators aims at simplifying the endorsement/permitting procedures and reducing the timeframe for obtaining the building permit. The specific measures related to endorsements include establishing the Single Approval Commission which will centralize the activity of the endorsing bodies, maintaining the validity of the location permits issued in the PUZ phase also for the phase of issuing the building permit, and regulating a tacit approval procedure in case of approvals which are not issued in the established deadlines. The endorsements and approvals issued by the environmental authorities, the SEVESO endorsement issued by ISU and the endorsement of the Ministry of Culture remain subject to their own regulations, while the endorsements of the authorities from the national defence, public order and security system (SNAOPSN) will be issued through a specialized structure distinct from the Single Approval Commission.

The regulation of a tacit approval procedure is welcomed in the context in which investors (unacceptably often) face delays of weeks or even months by some endorsing bodies, and there are even situations of complete institutional blockage. This would be a major paradigm shift, until now construction safety having been considered incompatible with the permitting through the tacit approval procedure in the absence of an express and unequivocal will of the legislator. However, in the Draft Urbanism Code, the procedure is ambiguously regulated, as, although the tacit approval would govern the building permit and the right to continue the works, it is intended to require that the approval should still be obtained until the completion of the works. This condition renders the tacit approval procedure less effective, as the beneficiary of the building permit must bear the risk that the endorsing body (who breached the statutory deadlines in the first place) will subsequently request amendments to the project (or issue a negative endorsement), generating additional costs and delays for the project or even endangering the entire project. At the same time, if the endorsing body will not issue the approval until the works are completed, the provisions of the Urbanism Code do not clarify whether or not the reception of the works and the registration of the building with the land book may be carried out.

Validity period of the building permits

The validity terms of the permits will also be governed by new rules. Firstly, the validity period during which the execution of the works may be started will be of 3 years, and it will not be possible to extend it. However, the period for execution of works is poorly regulated. The draft Urbanism Code establishes that the permit will be valid for the entire duration of performance of the works provided in the permit and that the validity will cease if the works have not been completed and no extension of the execution period has been requested, but on the other hand there is no provision regarding the procedure and conditions for extending the execution period - extension period, fees - or for obtaining a permit for continuing the works, as it currently exists under the current regulation.

New procedure for allowing certain (limited) construction works on the basis of the notification submitted to the authority

The Draft Urbanism Code proposes a new procedure for allowing certain construction works based on the notification registered with the authority. Within 15 business days, the authority will indicate whether a permit is required, otherwise the works may be executed and commissioned on the basis of the notification only. This procedure will include some of the categories of works that may currently be performed without a building permit. Some examples include changes to internal, non-structural, demountable partitioning, made of light materials provided that the length and/or dimensions of the escape routes, or the operation of installations with a role in ensuring fire safety, or the degree of resistance/level of fire stability of the construction are not affected. The same procedure will cover changes to destination that do not involve construction/demolition works, but only for commercial or office functions with public access - for other functions the change of destination may be performed without any permitting procedure or notification of the authority. Furthermore, the procedure is applicable for single-family homes with access and own plot, ground floor, without basement, having a maximum built-up area of 150 sqm, in the rural area, in compliance with the applicable urbanism regulation, only on the basis of standard projects made available by the central or county public authorities, purchased on the basis of solutions contests, with the observance of the local particularities.

Construction performed in lack or in breach of the building permit

In relation to constructions erected in lack or in breach of a building permit, the Draft Urbanism Code proposes to tighten the legal regime by increasing the statute of limitation for misdemeanours from 3 years to 5 years, and also introducing a drastic restriction on the possibility of subsequent registration with the land book. Thus, instead of the current procedure of issuing certificates attesting the commencement of the construction, regularization permits will be issued only for works performed in breach of the permit - the works performed without permit appear to be excluded from the new regulation - and only for a series of constructions of minor importance - single-family houses, household annexes, balcony closures. By way of exception, for 1 year after the entry into force of the Urbanism Code, regularization permits will be issued also for other categories of constructions, but subject to paying fees increased 10 times compared to the fees for obtaining the building permit.

The PeliPartners analysis shows the existing ambiguity regarding the possibility of the control body that sanctioned the act of executing unauthorized works or breaching the provisions of the permit to require the owner to obtain a regularization permit. This norm fails to include the limitations provided in the chapter on the regularization permit, and it also includes in its scope works performed without permit.

Secondly, the fate of constructions that do not fall within the limitations proposed by the Urbanism Code remains uncertain. The impossibility of the owner to register with the land book and dispose of such construction is itself a sanction. On the other hand, we consider that it is preferable to recover an unauthorized construction - as long as it complies with the technical and urban regulations -, even with the payment of an increased tax, compared to the uneconomical solution of demolition. Therefore, the restrictions for obtaining the regularization permit could be reanalysed by the legislator, shows the analysis.

Renewable energy projects

The PeliPartners analysis shows that the draft Urbanism Code has not been updated with the latest legislative amendments in the field of renewable energy projects, implemented by Law no. 21/2023 for the amendment and supplementation of Law no. 50/1991, which allow renewable energy projects to be performed in the extra-muros area, without a prior urbanism documentation, with a maximum area of 50 hectares. The urbanism section of the new legislative proposal provides that the projects allowed by Law no. 18/1991, where renewable energy projects are also included, may be performed in the extra-muros areas either in accordance with the land development plan or the general urbanism plan, if they include the urbanism regulations and technical information regarding the use of the lands located in extra-murosareas, either on the basis of a detailed urbanism plan, as part of the permitting process. A correlation of the legal norms is necessary to facilitate the performance of these projects.

Publicity regime of building permits

Another aspect that requires correlation is how to regulate the publicity of building permits and the deadlines for challenging them by interested social bodies - NGOs. The recent amendments to Law no. 50/1991, entered into force on 21 April 2023 by Law no. 102/2023 for the amendment and completion of Law no. 50/1991, Law on Administrative Litigation no. 554/2004 and Law no. 350/2001, are not currently reflected in the draft Urbanism Code.

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