Significant changes to the Law no. 7/1996 regarding Cadastre and Real Estate Publicity (the “Cadastre Law”) came into effect on 27 July 2012 as enacted under Law no. 133/2012 (the “Amendment Law”) published with the Official Gazette no. 506 of 24 July 2012.
The changes aim to synchronize the provisions of the Cadastre Law with the New Civil Code which entered into force on 1 October 2011 and to implement further measures for accelerating the process of organization and implementation of a unitary cadastre and land book registration system for real estate properties in Romania.
The objectives of the Cadastre Law, as recently amended, refer to enhanced security of real estate transactions, supporting the mortgage lending industry and the public taxation systems, providing economical, technical and legal information regarding real estate property and ensuring the publicity of rights thereon.
The most important changes brought under the Amendment Law are the following:
1. Synchronization with the New Civil Code
In order to be in line with the provisions of the New Civil Code, the amended Cadastre Law now includes more detailed provisions on the types of registrations than can be made with the Land Book with respect to in rem rights as well as personal rights and other circumstances that may be reflected in a Land Book, and clarifies the types of documents required for such registration.
A new element compared to the provisions of the New Civil Code and the previous legislation issued for its application refers to the documents required for the de-registration of in rem rights following the enforcement of termination clauses (Romanian: “pacte comisorii”). The de- registration can be made based on (i) authentic statements of the parties; or (ii) authentic ruling issued by a public notary for ascertaining that the termination clause became applicable; or (iii) irrevocable court decision. The involvement of the public notary as entity certifying the applicability of a termination clause was not an option prior to the Amendment Law.
2. Online access to Land Book services
Under the recent amendments of the Cadastre Law, public institutions as well as the public notaries must be granted direct and permanent access, either in hard-copy or online, to the electronic land books and the National Agency for Cadastre and Real Estate Publicity (the “National Agency”) must implement these provisions by the end of 2012. These provisions could represent an important step towards a future simplification of various formalities with public institutions which require submission by the applicant of land book excerpts (e.g. fiscal registration, applications for building permits, etc).
With respect to the possibility for all interested persons to access online the Land Book services, which was initially inserted in the Cadastre Law in 2010 but is not yet implemented, an order of the National Agency’s general manager is expected in order to establish the procedure and the limits of such access.
3. Further measures for the implementation of the National Programme for registration of real estate properties
The National Programme for registration of real estate properties was established since 2010 and its purpose is the creation of a unitary cadastre and land book registration containing all real estate properties in Romania. The implementation of this programme faced various challenges, some of which relate to practical situations such as lack of title documentation of various plots which precluded their registration with the land book, complicated procedures for rectification of inaccuracies in existing documentation, etc.
The recent amendments to the Cadastre Law include a series of measures which address this type of practical situations, such as:
- The possibility to register plots for which no ownership documents can be presented, based on a notarial procedure which includes a 30 days opposition period during which third parties may claim legal rights over the relevant property. In case no opposition is filed, the good-faith possessor will be registered with the Land Book as possessor, and will have the right to further obtain registration as full owner after the lapsing of a 5 years period. A similar procedure will apply for areas of land which in practice exceed the area mentioned in the title deeds by more than 5% for extra-muros land (Romanian “extravilan”) and 10% for intra-muros land (Romanian “intravilan”).
- In case the measurements indicate that certain properties, which have been previously registered with the Land Book, are not correctly reflected (i.e. with regards to their location) in the existing cadastral documentation, the rectification will be done without the consent of the registered owners of such
- After the cadastral works are finalized for each cadastral sector, the relevant technical documents will be made public by the local municipality and rectification requests may be filed within 30 days as of publication. Separately, the land book registration ruling(s) issued based on these cadastral measurements may be challenged within 15 days from the date they were communicated to the interested
After all challenges are ruled upon, the delimitation of each property will be clearly and definitively determined and future disputes on borders of the plots should be precluded.
- The cadastral and notarial services provided through the National Programme for registration of real estate properties for the first Land Book registration of properties shall be free of charge for the land owners. Also, the VAT exemption applicable to services of the National Agency was extended to the notarial services performed within the National Programme for registration of real estate properties;
- New attributions are given to the local administrative authorities in connection to the implementation of the National Programme for registration of real estate properties such as the verification of the information held by such authorities in connection to a specific real- estate property, the notification of the competent notary public body about the death of a person and information related to the deceased, the identification of the individuals who own/possess a certain real-estate property,
4. New provisions regarding the procedure of re-examination of registration requests
In case a registration request is rejected, the applicant may submit a request for the re- examination of the initial request by the chief registrator of the relevant Land Book office. The decision of the chief registrator may be further challenged in court.
As per the recent amendments to the Cadastre Law, the re-examination request as well as the court action may be filed also by the public notary or by any other interested person. Also, the new legal provision refer to a clear deadline of 20 days for the chief registrator to decide upon the re-examination request, whereas the previous version of the Cadastre Law did not include a deadline. Another amendment refers to the possibility to supplement, during the re-examination procedure, the initial documentation submitted in support of the registration request.
5. Documents needed for authentication by the notary public
Depending on the type of document to be authenticated by the notary public in relation to a right over a real-estate property, the notary shall request either a Land Book excerpt for authentication for the documents through which in rem rights are transferred, modified or created, or a Land Book excerpt for information for the documents through which in rem rights are lost/waived or for the documents drafted within the inheritance procedure.
6. The National Electronic Registry for Street Nomenclature
Certain of the amendments to the Cadastre Law aim at facilitating the implementation of the National Electronic Registry for Street Nomenclature, including new sanctions for the local authorities which fail to observe their obligations in this respect. This registry should have been established since 2010 as per previous provisions of the Cadastre Law and will serve for the assignment of street denomination and administrative numbers to real estate properties. According to public announcements on the website of the National Agency, the programme for the National Electronic Registry for Street Nomenclature was effectively initiated in April 2012 and its implementation is estimated to take 20 months.
The access to the data base shall be free of charge to all public institutions and public notaries, and administrative change of the name or number of a street shall be registered with the Land Book ex officio. However, as an exception from the general rule, the ruling approving the registration of such changes with the Land Book will not be delivered to the interested persons ex officio, but only upon the latter’s request.
7. Other new provisions
- The beneficiaries of encumbrances registered with the old transcriptions-inscriptions registers have to request by 31 December 2020 (i) the opening of new land books for the encumbered real estate, as well as (ii) the renewal of their rights, under the sanction of inopposability thereof to third parties after the expiry of the term. Such registrations shall be made free of
- As already provided by the previous version of the Cadastre Law, the technical specifications contained in the public procurement documentation need to be endorsed by the National Agency prior to the initiation of the public procurement procedure. The new legal provisions institute a sanction for breach of this obligation, consisting in the impossibility to obtain the approval for the beginning of the cadastral works or in the rejection of the reception
- The fines for breach of the provisions of the Cadastre Law were updated, the amounts being established between RON 400 (approximately EUR 90) and RON 4,000 (approximately EUR 900).
8. Future amendments for synchronization with the New Civil Procedure Code
Certain amendments to Cadastre Law are expected to enter into force starting with 1 September 2012, together with the New Civil Procedure Code. These amendments provide that the decisions issued by the courts in relation to Land Book registrations may be challenged only by appeal.
The implementation of the National Programme for registration of real estate properties is expected to have significant positive effects for developers of real estate projects in Romania. Currently, increased costs have been generated in technical due diligence and urbanism planning because of the lack of related information between the registries kept by the various authorities involved in urbanism and real estate development and updated information in the registries.
The creation of transparent and interoperable national registries would prevent such setbacks, and significantly simplify the planning and design stage of a real estate project.
With respect to delimitation of properties, the centralized measurements may bring up existing title flaws and generate a certain amount of litigation in the near future, however the long-term effect should be positive as the final result should be a single integrated cadastral map with clear boundaries for all properties.
1 This information note does not purport to be and should not be construed as legal advice. Professional advice should therefore be sought before any action is undertaken in relation to the matters set out in this information note.