The material below aims to present, as completely as possible, the legal aspects that must be analyzed before buying land for real-estate development. Of course, at the appropriate time, the lawyer’s work will be complemented by input from specialists in fields related to law—architects, surveyors, construction or geodesy engineers, etc.
Step 1 – Checking the Land Registry Extract
The land registry extract is the document issued by the land registry office having jurisdiction over the targeted land, for which the cadastral technical works have been carried out and recorded. It contains data regarding the holder of the ownership right as well as any encumbrances burdening the property in question.
Ideally, the land should have a cadastral number in addition to the topographical number. Assigning a cadastral number means registering the property in the integrated cadastre and land registry system (digital and geometric information received into the OCPI database), and not merely entering it in the land book based on an analog or paper plan. Thus, the existence of a cadastral number should guarantee fixing the location without deviations. See Step 4 on this point.
Step 2 – Checking the Legal Status
Verifying the land registry extract allows you to rule out the possible existence of encumbrances or notations regarding the property (mortgages, real-estate enforcement, opening of insolvency proceedings, lawsuits, etc.). However, the existence of a dispute concerning the land you intend to buy does not always appear from a simple review of the land registry extract.
In the absence of a land-book notation made at the initiative of the interested party, the attempt to exclude disputes will be done by carefully searching the court portal.
Such a search starts from the seller’s name and can extend to all other persons who might claim a right over the land. These could be the land’s previous owners, who can be identified by obtaining a full copy of the land book held in the OCPI archive. The land book is opened from the time a property is created and includes all transactions and all owners that property has had.
Additionally, the buyer can approach local authorities to exclude the existence of any restitution claim over the land in question. It must be borne in mind that a favorable result of such an inquiry is not a guarantee that no dispute or third-party claim exists regarding the property. Still, the seller is liable for all of this based on the warranty against eviction.
Step 3 – Obtaining and Analyzing the Urbanism Certificate for Building
Under Articles 28 and 29 of Law no. 350/2001, the urbanism certificate is a mandatory information act by which the public administration authority makes known the legal, economic, and technical regime of properties and the conditions necessary for carrying out the targeted real-estate operation. The application of territorial planning and urbanism documentation is ensured by issuing the urbanism certificate.
A distinction must be made between the urbanism certificate for information purposes and the urbanism certificate for building purposes. To have a complete picture of the land’s building regime, our recommendation is to request an urbanism certificate for building, stating precisely the desired investment.
The information-purpose certificate contains only data regarding the zone’s restrictions according to the urban plans, whereas the building-purpose certificate—being the first step before obtaining the building permit—will include, besides local restrictions, the approvals and consents necessary for construction.
What information do you get from the urbanism certificate issued for building?
- the location of the property: land intended for construction located intravilan (inside the built-up area) or non-buildable land extravilan (outside the built-up area);
- public-utility servitudes burdening the land;
- provisions of urbanism documentation establishing a special building regime—protected areas, permanent or temporary building bans;
- excerpts from the urbanism regulations regarding permitted or prohibited economic functions, as well as specific fiscal regulations;
- excerpts from the urbanism regulations regarding land coverage ratio (POT), floor-area ratio (CUT), minimum and maximum plot sizes, utility provision, what may be built on the plot, pedestrian and vehicle circulation and access, required parking, alignment of the land and constructions relative to streets adjoining the land, minimum and maximum permitted heights;
- information on the validity period of the urbanism documentation and how it is updated;
- the holder’s obligations and the approvals/consents required for building.
In practice, the usefulness of issuing a building-purpose urbanism certificate has been confirmed in numerous situations:
- it often happens that the local authority claims the nature of the investment requires drawing up and approving a detailed urban plan (PUD) or even a zonal urban plan (PUZ) for the plot concerned. Preparing this documentation requires time and money that substantially affects the land’s value;
- the elements regarding the property’s economic regime will show the permitted use of the area. Thus, although you intended to buy land to build an office building or a duplex, the zone function may allow only a single-family dwelling with a low height regime;
- the certificate will highlight whether the land falls within a protected green area or a protected built area, which involves a special building regime or even a ban on building. Under Article 18 of Law no. 24/2007, changing the destination of lands recorded in the local registry of green spaces is prohibited, except for public-utility works under certain conditions;
- other restrictions may concern a certain street-front width, a minimum number of parking spaces, obligations regarding planted area, exterior appearance, or fencing;
- the land’s value and usability will be strongly affected if there is a public-utility servitude burdening it (e.g., aeronautical servitude, utility-infrastructure servitude, right of way, etc.) or if it is located within the protection zone of a historical monument or an archaeological site.
Further, special attention must be paid to vehicle and pedestrian access to the plot. Building will be permitted only if there is access to public roads, directly or via servitude, according to the construction’s destination and the rules in the urbanism regulation for that territorial unit.
If the access road to the plot does not have the width required by the urbanism rules, the local authority will condition building on splitting off a strip from the plot parallel to the road and registering it as road, to ensure the necessary access width. Of course, the strip allocated to the access road can no longer be used for building; consequently, the investment’s value decreases.
Another, rarer situation—but which can cause major practical issues—is the expiry of the validity period of the urban plan governing the targeted land’s regime. Under Law no. 350/2001, the general urban plan (PUG)—the main operational planning instrument at the local level—has a validity of 10 years, with the possibility of extension for another 10 years.
Thus, if the time between purchase and the start of the investment process is long, you might find that new urban rules adversely affect the building regime on the purchased plot. In these circumstances, you should check whether the PUG is being updated locally and, if so, make sure the new rules—or at least the transitional regulations—are favorable to you.
Step 4 – On-Site Analysis
As mentioned in Step 1, the existence of a cadastral number for the land should serve as a guarantee of correct boundary demarcation. Nevertheless, situations have been encountered where, for various reasons, incorrect records existed even for properties that already had assigned cadastral numbers. To avoid such situations, a topographic check of the land is required to confirm that the written records match reality.
At this stage, if the land is not already fenced, a staking-out can also be performed, finalized with a staking-out and handover report for the site, signed by the owner, the surveyor, and possibly the neighbors. Such a step is useful to properly demarcate property boundaries and exclude potential neighbor claims.
As a rule, the geotechnical study is prepared for issuing the building permit, forming part of the written pieces required for the project. However, it is useful to carry out such a study before purchasing the land, especially since you will be able to use it later in the building-permit file.
This way, you eliminate the risk that land with unsuitable soil structure does not allow the intended investment or requires unforeseen costs for foundation works.
Step 5 – Concluding the Sale Contract
The sale contract for land must be concluded in authenticated form under penalty of absolute nullity, since it involves transferring real rights to be registered in the land book. The notary public is the only one competent to take the steps ensuring valid conclusion of the contract, but a specialized lawyer can draft or review it so that you are truly protected from a legal standpoint.
Among the clauses specific to a sale contract for land intended for building, you can include: a series of seller representations reiterating the aspects already reviewed according to the analysis above; extended warranties by the seller against eviction, defects of the property, and lack of agreed qualities; or other provisions tailored to the specific situation.