Law restricting land transactions comes into force today. Check its main provisions!

The law restricting the sale of farmland in Romania becomes today effective after its publication in the Official Gazette of Romania last month, on March 12, President Traian Basescu promulgating its revised version a week earlier.

Hence, from today onwards any EU or Swiss citizens, citizens of states that are part of the Agreement on the European Economic Area (Norway, Liechtenstein and Iceland) and stateless persons who reside in any of the mentioned countries, as well as legal persons having any of the above nationalities will be able to buy farmland in Romania, but only under the new regulation.

Therefore, for any transaction, there must be respected the right of preemption of the following (in this order): co-owners, landholders, neighboring land owners and the Romanian state through the State Domains Agency. That means that before possibly selling any land outside urban areas, those ones must be offered the opportunity to acquire it themselves, instead of any other citizen of EU Member States, including Romania, or of the states already enumerated.

So, according to the sale procedure set by the respective law, a land owner has to register a request for displaying the offer to the local authorities, namely the town hall which administrates the area where the land to be sold is located. In maximum one day, the respective offer must be put on view at the town hall and if possible, it must be displayed on its website, too, a 30-day period being allocated to pre-emptors for taking advantage of their rights and accept the offer, not without informing the authorities. In case there is more than one pre-emptor interested in acquiring the land put up for sale and the price criteria cannot be considered for selecting a buyer, the decision is subject to seller’s choice.

Also, if lower ranked pre-emptors come up with a better offer than the price requested by the seller and the offer proposed by other better ranked pre-emptors, the seller can resume the sale proposing a new offer for the highest price, but only within 10 days after the 30-day period expires. If the sale is not carried out, then the land owner is free to sell it to whomever he wishes, however, a transaction cannot be concluded for a lower price than that specified by the initial offer.

Apart from these prerequisites, there are some restrictions concerning lands located at 30 km from borders or the Black Sea which require approvals from the Ministry of Defence before selling, likewise those situated near special targets (at 2.4 km). Similar conditions apply for lands in archeological heritage area which for being sold need authorization from the Ministry of Culture.

For breaching these conditions, as well as for selling properties for lower prices than those offered to pre-emptors, the law stipulates fines ranging from 50.000 lei to 100.000 lei.

The law in question is meant to limit land transaction with foreign citizens, as according to the EU directive compelling Romania to liberalize the land market, EU citizens can purchase lands outside urban areas in the country starting 2014.