Latest regulatory changes and their impacts on operational real estate

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Keeping up with constant change in a rapidly transforming market is difficult at the best of times. In Romania, new amendments to real estate regulatory provisions look set to have a significant impact on business strategies, including the operational real estate sector.

Romania recently saw amendments to Law no. 10/1995 covering quality in construction as well as Law no. 50/1991 on the authorization of construction works performance, and the Methodological Norms for Applying Law no. 50/1991.

Quality in construction

The changes to Law no. 10/1995 focused on the obligations and liabilities of investors, and of owners of construction sites, mainly on obligations regarding branching and connections for utility networks. The new obligations for investors covered the following:

  • Obtaining agreement/ authorization from the road administrator to make connections to utility networks in the urban infrastructure, with payment of connection fees corresponding to the branching.
  • An inspection upon completion of works (Recepție la terminarea lucrărilor) and an inspection on completion of connections to public services and technical infrastructure, corresponding to the groups of individual and collective housing units, public utility constructions and access routes.
  • Performing a final inspection on expiration of the guarantee period (Recepția finală la expirarea perioadei de garanție).
  • Alteration of building installations/ networks relating to the construction work, subject to an expert examination on the basis of detailed technical documentation approved in line with appropriate legal provisions.
  • Handover to the owner only takes place following admission of the inspection on completion of works and after putting into service the authorized and final connections to the public utilities networks of the urban infrastructure, both in the case of new investments and interventions on existing constructions that were not used during execution of the construction works.

With the obligations and liabilities for owners, amendments to Law no. 10/1995 included:

  • Commissioning of the construction shall take place only after admission of the inspection at completion of works and after putting into service the authorized and final connections to the public utilities networks of the urban infrastructure and obtaining the authorizations provided by law. This applies both in the case of new investments and interventions on existing constructions that were not used during execution of the construction works.
  • Utilization of the construction can only be permitted after admission of the inspection at completion of the works and after handover of the construction. At the handover, all connections to the urban utilities should be put into service and accepted by the investor owner/initial owner, in accordance with the notices of the utilities providers that are annexed to the building permit.

One noteworthy amendment states that if a construction is built without a building permit and following expiry of the limitation period (three years, as of the date the offence was committed), the attestation certificate for the construction will be issued based on a technical report that evidences compliance with applicable quality requirements. If the report shows non-compliance, the certificate will not be issued.

List of works

A modification to Law no. 50/1991 covers the list of works that can be executed without a building permit. This has been extended with three new categories:

  • Aerial branching works in areas where they are not prohibited by local urban planning regulations.
  • Connection and branching works to the technical urban infrastructure already existing in the area; for this to be applicable, works should be performed in the public domain, subject to the road administrator’s approval/authorization.
  • Installation of photovoltaic systems for electricity production by prosumers and/or installation of solar panels for heating or hot water for domestic consumption, with prior notification to the local public administration authorities and compliance with the law in force. The PV systems and/or solar panels will be supported by a structure capable of ensuring stability of the entire assembly.

With the amended version of Law 50/1991, gaining the necessary endorsements and approvals can be carried out directly by the applicant or their proxies, prior to submission of technical documentation for the building permit, or through the Committee for Single Approval (CSA) at the request of the applicant.

The competent public authorities at county and city level are obliged to organize within specialized CSA structures so that against payment, according to the law and at the request of the applicant, the necessary endorsements and approvals to authorize construction works can be obtained. These will be based on documentation to authorize the construction or demolition works and specific technical approval documentation submitted electronically.

Methodological Norms: Law no. 50/1991

The Norms provide further details regarding the CSA and approvals/ endorsements from suppliers and administrators of utilities. To prepare documentation to authorize construction works, it’s necessary to obtain the approvals/endorsements of the suppliers and administrators of urban utilities for insurance and for connection/branching to the urban infrastructure. These approvals/endorsements are subject to certain conditions and restrictions regarding operational safety, imposed by the characteristics and location of the energy and technical transport/distribution networks in the area.

“New amendments to real estate regulatory provisions in Romania look set to have a significant impact on business strategies, including the operational real estate sector.”

If the applicant chooses to obtain the approvals and endorsements through the CSA, the fees and charges for issuing them are borne by the applicant. The fee amounts are determined by the issuers according to the legal regulations specific to each approval area and are communicated to the issuers of building or demolition permits.

A new provision in the Norms states that the urban planning certificate should include the regime for updating/modifying urban planning documents and related local regulations in a specific situation if the applicant’s objective is not covered by the approved urban planning documentation. In this case, the applicant will be informed whether:

  • The provisions of the approved documentation cannot be modified.
  • An opportunity approval should be obtained subject to the conditions of Law no. 350/2001 regarding the planning of the territory and urban planning, with the subsequent modifications and completions.
  • It is possible to elaborate a modified urban planning documentation without obtaining an opportunity approval according to Law no. 350/2001 regarding the planning of the territory and urban planning, with the subsequent modifications and completions.

In summary, this article doesn’t seek to provide a comprehensive list of the regulatory changes. Given the extent of the amendments, their various impacts and consequences for different players in the real estate sector should be carefully considered, and may lead to further developments.

“Given the extent of these amendments, their various impacts and consequences for different players in the real estate sector should be carefully considered.”