Securing property transactions
Real estate acquisitions, whether residential or commercial, represent some of the most significant financial investments made by companies or individuals. Romania's real estate market, while dynamic, conceals numerous legal risks. A mistake during verification or negotiation can lead to losing the down payment, inheriting hidden debts, or worst case, costly property litigation.
TGZ Legal's role is to ensure transaction security. We don't allow our clients to sign until we are absolutely certain of the property's legal validity and the contractual protection of their interests.
Real Estate Due Diligence is a thorough legal analysis of a property prior to acquisition, development, investment or financing. Unlike a standard Land Register check, real estate due diligence provides a complete and realistic view of the property's legal status and of the risks associated with the transaction.
When due diligence is recommended
What we ensure through due diligence
Our real estate due diligence process is structured, comprehensive and fully documented, addressing all legal elements relevant to transaction security and investor protection.
We validate the complete ownership history and the legality of all transfers from the first registered owner to the present.
We identify all elements that may affect the transfer or full use of the property.
We establish the applicable legal and planning framework, including all construction and use restrictions.
We assess all statutory restrictions imposed by public authorities that may affect the value or use of the property.
We transform legal analysis into a decision-making tool, providing concrete recommendations for optimal transaction structuring.
Real Estate Due Diligence is not a formal exercise, but a key legal risk-management instrument. Incomplete or superficial reviews can result in ownership disputes, restrictions on use, costly litigation or inability to secure financing or complete a future sale.
The sale-purchase promise
The pre-contract myth
Many clients mistakenly believe the promise is merely a "reservation". According to the Civil Code, a bilateral promise is a contract in itself, creating binding obligations for both parties.
Legal deadline
If one party unjustifiably refuses to conclude the final contract, the other party has 6 months to request the court to issue a judgment in lieu of contract.
Maximum protection
The most important legal aspect: once the promise is signed at the notary, we immediately request its notation in Part III of the Land Registry.
Given the binding force of the promise, clause negotiation is essential. Our experience leads us to insist on critical protection clauses.
We clearly define the fate of the down payment based on the cause of transaction failure.
Probably the most important clause for financed buyers.
We include binding contractual clauses requiring the seller to remove, at their own expense, all encumbrances registered in the Land Register, ensuring delivery of a legally unburdened property.
The supreme protection securing the right to purchase.
“Noting the promise in the Land Registry is the strongest guarantee that the client's down payment and purchase right are secured. The seller can no longer sell the property to anyone else.”
TGZ Legal · Real Estate Advisory
The Land Registry is the official public register, maintained by ANCPI, containing the legal record of all properties in Romania. Verifying a Land Registry extract is essential to confirm who is the real owner, the exact surface area, and most importantly, whether the property has debts (mortgages) or noted litigation.
Although the Civil Code doesn't always require authentic form for the promise's validity itself, notary signing is strongly recommended and becomes mandatory if you want the supreme protection: notation of the promise in the Land Registry. Additionally, authentic form facilitates forced execution of obligations.
If the promise is validly concluded, you have two options: 1) Request return of the agreed penalties (usually double the down payment); or 2) Appeal to the court within 6 months from the date the final contract was supposed to be signed and request a court judgment in lieu of contract.
Registration in the Land Registry is an entry in the public register (in Part III) that makes your promise enforceable against everyone. This legally prevents the seller from selling the property to anyone else while your promise is valid. It's the best insurance that you won't be defrauded.
It depends on what you negotiated in the promise. If there's no specific clause, you risk losing the down payment. That's why our experience leads us to always include a 'suspensive condition clause' (credit clause) providing that if financing is refused for reasons not attributable to you, the promise is cancelled and you receive the full down payment back.
Send us your transaction details and book a call with our team to review the deal in due time, define the audit scope, and protect you from potential risks