In brief
Article 131 of the Romanian insolvency law (Law 85/2014) allows the buyer to require the judicial administrator to complete a sale that the developer undertook before the proceedings were opened, but only if four conditions are met together, including the registration of the undertaking in the land book and possession of the property. During construction, therefore, the practical protection lies mainly in the payment structure and in the project's dedicated account. Everything is checked before the advance payment, not after.
Key takeaways
- 1Article 131(1) of Law 85/2014 requires the judicial administrator to perform a promise of sale made before the proceedings, at the buyer's request, only when all four conditions are met.
- 2One of the conditions is the noting of the promise in the land book. Under Article 422(8) of Law 169/2026, the notary requests the registration on the signing day or on the next business day.
- 3A further condition is possession of the property, so a buyer at the start of construction will usually not benefit from Article 131 on its own.
- 4During construction the advance payments go into a dedicated account, and the developer may spend from them up to 25% of the price on the structure and then up to 20% on the installations.
- 5Creditors with a right of preference registered before your promise retain their rights (Article 131(2)), so the third part of the land book extract is checked.
The question “and what if the developer collapses?” sounds pessimistic, but it is the right question to ask before transferring an advance payment for a house that does not yet exist. In Romania it has a defined legal answer, with clear conditions, and most of the conditions are already determined on the day the preliminary contract is signed.
What does Romanian law provide when a developer becomes insolvent?
Law 85/2014, the Romanian law on insolvency prevention procedures and insolvency, includes a provision written specifically for buyers: Article 131. It applies to a bilateral promise of sale - in practice, the preliminary contract (antecontract) - that has a certain date and was signed before the proceedings were opened. In such a case the judicial administrator or the liquidator must perform the promise, at the buyer's request, if four cumulative conditions are met.
| Condition under Article 131(1) | The practical meaning | What can be done in advance |
|---|---|---|
| The price has been paid in full or can be paid on the date of the request, and the property is in the buyer's possession | Two elements are required: money and possession | Check in the contract when possession passes to you |
| The price is not lower than the market value of the property | A price far below the market may block the way | Make sure the price in the contract reflects market value |
| The property is not of decisive importance for the success of a reorganisation plan | A determination made within the proceedings | There is nothing to check in advance; the lawyer will argue it if required |
| The promise is noted in the land book (Cartea Funciară) | Without a registered notation, the article does not apply | Check in the land book extract that your preliminary contract appears |
The conditions are cumulative. If one of them is missing, Article 131 is not your route, and your position will be determined within the insolvency proceedings according to the circumstances of the case.
One of the conditions is the noting of the promise in the land book. Under Article 422(8) of Law 169/2026, the notary requests the registration on the signing day or on the next business day.
Why is registering the preliminary contract in the land book the threshold condition?
Because it is the only condition that can be verified immediately, and without it everything else is irrelevant. In the past registration depended on the initiative of the parties. Today it is part of the ordinary course: Law 207/2025, known as the “Nordis Law”, whose rules have appeared since 25.8.2026 in Articles 422(6)-(11) of the Planning and Construction Code (Law 169/2026), requires the preliminary contract in an off-plan project to be signed before a notary. A notarial contract also has a certain date.
Under Article 422(8), the notary requests the registration of the contract in the land book on the signing day, or at the latest on the next business day. Even so, do not assume that it has happened: order a new land book extract a few days after signing and check that the notation appears.
Does Article 131 protect someone buying at the shell stage?
Usually not on its own. The first condition requires the property to be in your possession, and a house still under construction has not been handed over to you. The article is therefore relevant mainly to a buyer who is close to handover, and less to a buyer who signed at the start of the process.
The implication: during the construction period the real protection is not Article 131, but the question of how much of your money is exposed at any given moment, and where it goes.
What protects the advance payments before handover?
Under Article 422(10), the advance payments made under the preliminary contract go into a separate bank account of the developer, dedicated to that project. The developer may spend from it only on the project, and only with a “bun de plată” (“approved for payment”) confirmation from the site supervisor:
- Up to 25% of the price on the structure.
- After completion of the structure, up to 20% of the price on the installations.
- Using the money for another purpose entails a fine of 1% of the developer's turnover in the previous year (Article 422(11)).
The caps apply to what the developer spends from the account, not to what you pay and when. The payment schedule is set by the contract. It is therefore worth linking each payment to a construction stage that can be verified, so that at every moment your exposure is as small as possible.
Who else may stand ahead of you in the queue?
Article 131(2) adds a layer: before the sale to the buyer is signed, the judicial administrator must respect the rights of creditors with a right of preference in the property, such as a bank that registered a mortgage, if they registered their right before the promise to the buyer was signed. Depending on the case, they may be paid first from the sale proceeds or receive another protective measure provided by law.
The land book extract is therefore read twice: once to see that your notation is registered, and once to see what was registered before you in the third part, where the encumbrances are listed.
What is checked before paying an advance?
- A land book extract for the specific unit, not for the project. Under Articles 422(6)-(7), the developer may promise a sale only after the building permit has been noted in the land book, after a preliminary division into units (preapartamentare) in a future condominium building, and after a separate land book sheet has been opened for each future unit.
- A notarial preliminary contract. A private document such as a “memorandum of understanding” is not a promise of sale under these rules.
- A new land book extract after signing, showing that your contract has been registered.
- The third part of the land book extract: which mortgages or encumbrances were registered on the land before you, and in whose favour.
- The insolvency register: a search for the company by its exact name and tax number (CUI) in the insolvency registers through ONRC, the Romanian trade register. The basic search is free of charge. Then check the owners, claims and track record.
- A lawyer who represents only you. The notary is neutral, and the developer's lawyer represents the developer. Ask your lawyer in writing: “What happens to my contract if the company becomes insolvent?”
A project sold before there is a registered permit, with a contract that repeatedly extends the developer's deadline for obtaining a permit and restricts the buyer's right of cancellation, is exactly the situation in which none of the protections described here exist yet. Protection is determined on the signing day.
What should you do if proceedings have already been opened against the developer?
Do not wait. Insolvency proceedings have deadlines, and whoever misses them may lose claims. As soon as you learn that proceedings have been opened, contact an independent lawyer in Romania who specialises in insolvency, and bring the preliminary contract, the land book extracts and the payment confirmations. If all four conditions are met, the judicial administrator or the liquidator can be asked to perform the promise and sign the sale with you.
What to do before signing, and how we accompany you
Article 131 is not a guarantee; it is a list of conditions, and some of them depend on what you do today: a registered notarial contract, a land book extract checked before and after, and a payment schedule linked to stages. We review the preliminary contract and the land book extracts, analyse the payment structure and coordinate with lawyers and notaries licensed in Romania, who are the ones authorised to act under local law and to represent you in insolvency proceedings.
What is stated here is general information, as of October 2026, and is not legal advice for any particular case. Every insolvency proceeding is decided on its own facts and documents.
Frequently asked questions
What happens to the advance payment if a developer in Romania goes bankrupt?
Under Article 131 of Law 85/2014, the judicial administrator can be asked to complete the sale promised before the proceedings, if four conditions are met together: the price has been paid or can be paid and the property is in your possession, the price is not lower than market value, the property is not of decisive importance for a reorganisation plan, and the promise is registered in the land book. If a condition is missing, your position is determined within the proceedings.
How do you check that the preliminary contract has been registered in the land book?
Order a current land book extract for the unit a few days after signing and look for the notation of the contract in it. Under Article 422(8) of Law 169/2026, the notary requests the registration on the signing day or on the next business day.
Where do you check whether a Romanian company is in insolvency proceedings?
In the insolvency registers through ONRC, the Romanian trade register. Search by the exact name of the company and by its tax number (CUI); the basic search is free of charge.
Does a bank mortgage on the land affect my right?
Under Article 131(2), a creditor with a right of preference who registered its right before your promise retains it when the sale to you is signed. The third part of the land book extract is therefore checked before signing, and the lawyer is asked how a registered encumbrance affects the transaction.
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The information in this guide is general in nature and does not constitute legal or tax advice on any specific transaction. Every transaction is assessed on its own facts.