In brief
When buying in instalments directly from the developer, the time at which ownership passes depends on the structure of the contract, not on the amount paid. In a sale with retention of title, ownership passes only on the last instalment, under article 1755 of the Romanian Civil Code, even though the risk to the property already passes on delivery. For a home still under construction, Law 207/2025 limits the reservation deposit and requires a dedicated account for advance payments, but your main protection is a notarised contract registered in the land book.
Key takeaways
- 1"Developer instalments" can be a preliminary contract during construction, a sale with retention of title or an immediate sale with a mortgage in favour of the developer, and each one transfers ownership at a different time.
- 2In a sale with retention of title, ownership passes on the last instalment, but the risk to the property passes to you on the day of delivery (article 1755).
- 3Law 207/2025 limits a reservation deposit to 5% of the price and to 60 days, and advance payments go into a dedicated account from which the developer draws according to construction stages.
- 4Non-payment of a single instalment that does not exceed one eighth of the price does not allow termination, unless otherwise agreed in the contract (article 1756).
- 5"Interest-free" is tested by comparing the cash price with the instalment price: the difference is the cost of financing.
When is the home really yours when you pay the developer in instalments?
The answer is determined by the legal structure of the contract. You can pay 80% of the price and still not be the registered owner, and you can be the owner on the day of signing and owe the developer most of the price.
An offer of "pay us directly, no bank and no interest" can be a genuine solution, especially for someone whom the bank is reluctant to approve for a mortgage. To assess it, the first question is not the size of the monthly payment but what happens to your money if something goes wrong with the developer.
In a sale with retention of title, ownership passes on the last instalment, but the risk to the property passes to you on the day of delivery (article 1755).
Which legal structures lie behind "developer instalments"?
| Structure | When ownership passes | The main protection | The central risk |
|---|---|---|---|
| Instalments during construction under a preliminary contract | On the final sale contract, after construction is completed | Law 207/2025, dedicated account, registration of the preliminary contract in the land book | The developer gets stuck before completion |
| Sale in instalments with retention of title | On the last instalment | Notarised contract, registration in the land book, articles 1755-1757 of the Civil Code | You live in a home still registered in the developer's name |
| Immediate sale with a mortgage in favour of the developer | On the day of signing | Ownership is already yours; the developer has a mortgage over the balance | Non-payment may lead to enforcement of the mortgage |
Ask for the structure to be written expressly in the contract. A general heading such as "payment agreement" is not enough to know what your legal position is.
What does Law 207/2025 provide for payments during construction?
Law 207/2025, known as the "Nordis law", entered into force on 11 December 2025. Since 25 August 2026 its rules appear in article 422(6) to 422(11) of the Planning and Construction Code (Law 169/2026). Its main points, according to a summary published by Europa Liberă:
- Reservation: up to 5% of the price and up to 60 days, on pain of absolute nullity. If the transaction does not go ahead through the sole fault of the developer, the money is returned within 30 days.
- Dedicated account: advance payments are deposited in a bank account of the project only and are used only for its construction.
- Drawdown by stages: the developer may draw from the advance payments up to 25% of the price for the structural frame, and after its completion up to 20% for the building systems, each drawdown stamped by the site supervisor.
- Preliminary contract: signed before a notary only after the building permit has been registered in the land book, and the notary must register the contract there.
The law limits what the developer draws from the account, not your payment schedule. The schedule is checked in the contract. A request for a reservation deposit of more than 5%, or for a payment that does not go into the project's dedicated account, is a first warning sign.
Instalments after delivery: what does the Civil Code say?
Most of what is called rate la dezvoltator (developer instalments) in Romania is a finished home that you move into, with a balance paid to the developer over several years. Three articles of the Romanian Civil Code govern this situation:
- Article 1755: where the sale is made with retention of title to secure payment, ownership passes on the last instalment, but the risk to the property, for example damage, passes to you already on delivery.
- Article 1756: non-payment of a single instalment that does not exceed one eighth of the price does not allow the developer to terminate the contract, unless otherwise agreed. The contract can alter this protection, so the clause on late payments must be read.
- Article 1757: if the contract is terminated for non-payment, the developer returns what has been paid, but may deduct fair compensation for the use of the home. The court can reduce an excessive deduction.
The practical meaning: throughout the instalment period you live in and invest in a home registered in someone else's name. If the developer has creditors, tax debts or insolvency proceedings, the question of what will become of the home turns into a legal question that is not always simple.
What should be checked before signing a developer instalment plan?
- The legal structure. A preliminary contract, a sale with retention of title or an immediate sale with a mortgage, written expressly.
- Notarised contract and registration. Registration in the land book (notare, an annotation in the register) gives notice to any third party of your right in the property and protects against a double sale.
- What is registered against the property today. The land book extract (extras de carte funciară) will show whether there is a mortgage of the bank financing the developer, and you must find out what will become of it when you pay.
- Late payment. Default interest, the number of missed instalments before termination, and how much will be deducted from your money on termination.
- Early repayment and switching to a mortgage. A bank will find it difficult to finance a home still registered in the developer's name, because it must take a mortgage over an asset of the borrower. It is advisable to agree in advance what such a switch will look like and to write it into the contract.
Is an "interest-free" instalment plan really free?
Not necessarily. The way to check is to ask the developer for two prices in writing: a price for full payment and a price for instalments. If there is a difference between them, it is the cost of financing, even if it is not called interest.
Compare the difference with the cost of a bank mortgage on the same amount, and ask whether it applies to the entire period or only to part of it.
Why should an Israeli buyer be particularly careful?
In Israel, the Sale (Apartments) (Assurance of Investments of Persons Acquiring Apartments) Law requires a developer to provide security for buyers' money in a project under construction, and most buyers are familiar with the bank guarantee. In Romania, protection during construction arrived only in December 2025, and it is structured differently: caps on the developer's drawdowns by stage and a dedicated account, not a guarantee for each payment.
An instalment plan with retention of title after delivery has no familiar Israeli equivalent. It is therefore important that an independent Romanian lawyer, who represents you and not the developer, reads the contract before signing.
Who is a developer instalment plan suitable for?
It can suit someone whom the bank will not finance, for example because of age or type of income, provided that ownership passes early or that there is a registered notarised contract with clear protections. It is less suitable when you are asked to pay most of the price while the home is registered in the developer's name, with no registration and no security.
What to do before signing and how we assist
Before committing to an instalment plan, it is advisable to identify the legal structure, obtain an up-to-date extract, compare the cash price with the instalment price and make sure that the contract is notarised and registered. We review the offer against the Civil Code and Law 207/2025, mark the sensitive clauses and prepare the list of requested changes. The notarial signing and registration in the land book are carried out in Romania by notaries and lawyers holding a local licence.
What is stated here is general information as of October 2026 and is not legal advice for a specific case. The description of the law and the Civil Code is a summary; the binding text is the one published in the Monitorul Oficial. Every contract is different and must be examined on its own merits.
Frequently asked questions
When is the home transferred to my name when I pay the developer in instalments?
In a sale with retention of title, on the last instalment under article 1755 of the Civil Code. For a home under construction, on the final sale contract after construction is completed. In an immediate sale with a mortgage in favour of the developer, on the day of signing.
What happens if I missed one instalment?
Under article 1756, non-payment of a single instalment that does not exceed one eighth of the price does not allow the contract to be terminated, unless otherwise agreed. You should therefore check what the contract provides regarding late payments.
If the contract is terminated, will I get my money back?
Under article 1757, the developer must return what has been paid but may deduct fair compensation for the use of the home, and the court can reduce an excessive deduction. The actual amount depends on the contract and the circumstances.
Can I switch to a bank mortgage in the middle of the instalment plan?
Sometimes, but it is complicated when the home is still registered in the developer's name, because the bank needs to take a mortgage over an asset of the borrower. It is advisable to find out in advance from the developer and the bank what such a transfer will look like and to write the process into the contract.
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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.