Simona Guțiu

Author: Simona Guțiu, PhD Lecturer at the Faculty of Law of the Bucharest University of Economic Studies (ASE), Notary Public at SPN EQUITY (Bucharest)

Starting December 2025, real estate developers active in the residential sector of Romania's real estate market face strict obligations designed to strengthen legal protection for buyers. The new legislation introduces unprecedented rules, from dedicated bank accounts and reservation fees capped at 5%, to fines of 1% of turnover for misuse of down payments. The measures come in reaction to irregularities in the real estate development market: developer insolvencies, multiple promises to sell the same units and the collection and return of down payments, or the unjustified use of down payments for other purposes.

Background: legislative response to market irregularities

Published in the Official Gazette on 8 December 2025, Law No. 207/2025, known as the "Nordis" Law, fundamentally amends Law No. 10/1995 on Quality in Construction and the Land Registry Law No. 7/1996. Its stated aim is to provide protection for prospective buyers of houses under construction and to create a more stable, trust-based framework in the legal relationship between developers and prospective buyers.

The law introduces for the first time new obligations for developers of residential projects, aimed at balancing forces that previously favoured developers, who had freedom of action and were at most censured by market developments generated by the supply and demand for new housing.

Impact on developers: new obligations and procedures

For real estate developers, the new law means a complete transformation in the way they work by introducing strict requirements before they can conclude promises to sell.

Preliminary subdivision (in Romanian: preapartamentare), a completely new cadastral procedure in Romanian law, becomes mandatory. Developers can conclude promises of sale for future individual dwellings only after the following requirements have been met: the building permit has been noted in the land register, the preliminary subdivision has been carried out for future condominiums and land registers have been opened for individual units representing future property.

The preliminary subdivision deed is drawn up in authentic form based on the cadastral documentation received by the territorial office, drawn up by the person authorised to carry out the specialised works, on the basis of the building permit and related documentation. The ANCPI decision of 10 December 2025 specifies a building permit registration fee of RON 75, regardless of the number of individual units.

Promises of sale must necessarily be concluded in notarised form. This new formal requirement is not in line with the Civil Code, which does not require an authenticated form for the conclusion of promises (except for the promise of gift), since there is no transfer of a real right. The notary public must request that the promise be entered in the land register on the day on which it is drawn up or, at the latest, on the following working day.

Financial management undergoes major changes, as the developer must collect the sums paid by the buyer as a down payment into a separate bank account dedicated to the construction of the project for which the down payment has been made, and use them exclusively for the development of the project, only after the responsible person/ site manager has approved the payments by stamping them as "good for payment". The law stipulates that the developer may spend a maximum of 25% of the price for the building resistance part and a maximum of 20% of the price for the installation part after its completion. It is not clear why the lawgiver has set these maximum percentages and there is a gap regarding the remaining sums of money and the precise destination of their use (e.g. finishing, formalities, taxes, architectural services, marketing sales, related expenses, etc.). It is also not clear who is the responsible person (i.e. an internal employee, the director, project manager, independent third party, etc.) and how the powers of approving the spending of received down payments are divided. We can interpret that the site manager oversees all approvals related to the execution of the construction works, while the rest of the expenditure allocated to the development of the project is the responsibility of the person in charge.

The use of the sums paid as down payment for purposes other than those related to the development of the project is prohibited and is punishable by a fine of 1% of the developer's turnover in the previous year, unless the act constitutes an offence. It remains to be seen which authority will be competent to establish and impose the fine. The effectiveness of this fine is questionable, especially in situations where the developer sets up a project company for each project, which usually collects the proceeds when the project is finalised.

Buyer protection: new guarantees and limitations

For buyers of under-construction houses, the "Nordis" Law introduces significant protections designed to strengthen legal protection.

The reservation fee is capped at a maximum of 5% of the price of the dwelling, with breaches resulting in absolute nullity of the reservation agreement. It is not clear whether the absolute nullity is total or partial (for amounts above the 5% threshold). The maximum duration of the reservation agreement is 60 days, at the end of which either the sale promise or contract will be concluded. However, the law does not provide for an express penalty for non-compliance with this obligation, and it is not specified whether new reservation agreements may be concluded immediately after the expiry of the reservation agreement.

If a sale promise or contract is not signed due to the exclusive fault of the developer, the developer must, within 30 days, fully reimburse the amounts received under the reservation agreement. It is unclear in which cases the "exclusive fault" of the developer can be categorised and who will qualify it. It could be interpreted per a contrario that if the authority is late in issuing the building permit or its extension, the developer is no longer “exclusively at fault” and is no longer bound by this repayment deadline.

Transparency and legal certainty are increased by the obligation to note the building permit in the land register for each individual unit before signing the sale promise. Sale promises can only be concluded after the building authorisation has been noted in the land register and the land register extract for the future individual unit has been obtained in advance.

Market impact: uncertainties and grey areas

Contractual flexibility raises questions as the 'Nordis' Law only regulates reservation agreements and sale promises. Contractual forms regulated/ permitted by the Civil Code (such as option agreements, contracts for the sale of future property, contracts of sale subject to conditions precedent/ restrictive conditions, project developments by joint ventures/ partnerships, promises of exchange, building lease, letters of intent, intention to contract) are not covered by the “Nordis” Law. The question arises as to which of the provisions of Act 207 should be considered when concluding legal acts other than those expressly regulated in the new law.

The draft amendments are partially regulated. Thus, if the number of individual units included in the initial building permit changes before the completion of the subdivision operation, the developer must update all the land registers on the basis of a new preliminary subdivision deed, without the prior consent of the promising buyer, except in the case of a change in the total area or the location of the unit subject to the promise of sale.

Several questions remain open, such as what happens if the developer relinquishes elements of the condominium that were intended as common areas (even part of the common and forced ownership)? In that case, is the developer under an obligation to seek the consent of all prospective buyers, given the potential impact on all of them? What happens if a single prospective buyer refuses to consent in such situations, and the land registrars interpret it as imperative to obtain such consent?

ANCPI's decision clarifies that, regardless of whether prior to Law No. 207 the building permit and sale promises were registered in the land registry, it is mandatory for the developer to file an authentic own liability statement, so as to register or update, as the case may be, the existing information (i.e. sale promises concluded before the entry into force of Law No. 207/2025) and to register the building permit separately for each individual unit, in accordance with the applicable legal provisions.

International comparison: the Austrian model

In contrast to the Romanian approach, in Austria, for example, only the payment of down payments is conditional on the commencement of construction works based on a building permit. A minimum content of some clauses of a contract concluded with the developer is indicated, including: description of the property and related facilities, costs of services, costs of finalising the contract, guarantees given to the buyer, trustee, if the development is carried out in an area at risk of floods, avalanches, contaminated areas, payment of down payments depending on the stages of construction works.

Conclusions: progress with grey areas

Law 207 is a step forward in the legislative endeavour to provide end-buyers with a more legally secure framework with the aim of mitigating or eliminating, as far as possible, the risks and problems encountered in the practice of residential real estate development.

Law 207 includes a number of beneficial aspects, such as the implementation of real estate publicity requirements and formalities to reduce/ eliminate the problems encountered in practice (double/ triple promise of the same individual units and corresponding receipt of down payments for the same individual units in the future, use of down payments for purposes other than project development, non-repayment of down payments), the obligation to register the building permit, or the obligation to conclude sale promises in authentic form.

However, the law leaves several extremely important aspects unregulated, such as the definition of real protection mechanisms in the event of developer insolvency, the possibility of obtaining instruments/ guarantees that could be enforced by the prospective buyers, the establishment of fines or obligations without express or effective sanctions.

The obligation to conclude sale promises in authentic form is clearly an advantage for buyers, but this new formal requirement is not in line with the Civil Code, which does not require an authentic instrument for the conclusion of promises (except for promises of gift), since there is no transfer of a real right. Other obligations, such as obtaining the building permit prior to the conclusion of sale promises, would appear to severely restrict the principle of freedom of contract.

At the same time, the question arises whether a developer can receive payment instruments, conditional letters of guarantee, insurance instruments, escrow/ trust account sums from buyers who are interested and willing to contract, but who have other available and legally permissible safeguards and who are not interested in a mere land register entry, as they have other stronger security instruments, i.e. whether various agreements can be concluded on the establishment of prohibitions on alienation, encumbrance.