Essential Verification and Security Strategies for Real Estate Ventures in Romania: Key Steps to Compliance
When diving into Romania's real estate market, it's vital to perform due diligence checks on the developer to ensure their legitimacy and financial stability. Here's what investors should look out for:
- Legal and Financial Audit: Analyze the legal and financial situaion of the developer, check their legal docs like building permits, property rights history, and land registry extracts. Assume the role of Sherlock Holmes as you investigate the developer's reputation in carrying out similar projects and seek any pending litigation or insolvency requests.
- Background Check: Consult the Trade Registry for insight into the developer's business activities, ownership structure, and financial statements submitted to the Ministry of Finance. Also, scrutinize the land registry extract to confirm the developer has legal rights to the land or owns the property upon which they're building.
- Urbanism Certificate: This document provides valuable details about the land's status and existing buildings in accordance with urban planning regulations and guidelines. It also establishes the requirements for granting the building permit.
- Assess Quality and Completion Rates: Delve into the developer's portfolio to evaluate the quality of construction and project delivery times, and check other projects the developer has completed. Review feedback from other investors or property owners to gauge the developer's relationship with their clients.
- Collaborate with a Legal Eagle: Teaming up with a real estate lawyer is a smart move when performing these checks and negotiating the agreement's terms. Their expertise helps navigate the Romanian legal system and protect your investment.
Let's say you're in the market for a historic property in Bucharest. The ONV LAW team recently helped close an 8 million Euro deal involving the acquisition of the entire share package of Bluehouse Investiții, who owned the Eva store. While that's just one example, the lessons learned can help you in your dealings with developers in Romania.
Stay tuned for more tips, as we cover how to verify the financial health of developers and their project history, identify red flags in promotional materials, and navigate the terms of a pre-construction property acquisition contract.
- Assessing Developer's Financial Health: While considering the acquisition of an historic property from a developer like Bluehouse Investiții, investigate their financial health by reviewing their financial statements submitted to the Ministry of Finance, and check their track record of completing projects on time and maintaining high construction quality.
- Real-estate Law Professional Consultation: To ensure a smooth transaction and protect your investment, collaborate with a real estate lawyer to help review legal documents, such as building permits, property rights history, and land registry extracts, and to negotiate the pre-construction property acquisition contract terms in accordance with Romanian law.
