In brief
Law 207/2025, whose rules have moved to article 422 of the Code of Spatial Planning, Urbanism and Construction, limits the exposure of a buyer from a developer in Romania: a reservation fee of up to 5%, a preliminary contract only before a notary and after the building permit has been registered, and advance payments in a dedicated account with spending caps according to the construction stages. The law does not require a guarantee for completion of construction, and in insolvency the preliminary contract is performed only under cumulative conditions. The practical protection is therefore to pay as little as possible before construction progresses, and to check the developer itself.
Key takeaways
- 1Reservation fees are limited to 5% of the price and to a period of up to 60 days, and are returned in full within 30 days if the preliminary contract is not signed through the sole fault of the developer.
- 2A preliminary contract is signed only before a notary and only after the building permit has been registered in the land book, and the notary applies to register it immediately.
- 3From the dedicated account the developer may spend up to 25% of the price on the structure, and only after it up to 20% on the building systems, with the approval of the site supervisor.
- 4Romanian law does not require a bank guarantee or insurance for buyers' money, unlike the Sale Law in Israel.
- 5In insolvency, under article 131 of Law 85/2014, the preliminary contract is performed only under cumulative conditions, including that the property is in the buyer's possession.
Behind most of the questions about the payment schedule and the bank stands one question that buyers do not always say out loud: what will happen to the money if the developer disappears? In Romania the question has gained added weight after the Nordis affair, in which, according to the investigation by the Romanian prosecution, the same apartments were sold more than once.
It is permissible and proper to put the question to every developer, and anyone who works seriously will answer it in writing. But it is worth sharpening it: instead of asking whether the developer can be trusted, ask what part of your payments is at risk at each stage, and what will remain registered in your favour if the company collapses. That is what we analyse here, under Romanian law.
How much of your money is exposed at each stage?
The protection in Law 207/2025 is graduated according to the progress of the transaction. From 25 August 2026 the same provisions, without any change in wording, are found in article 422 of the Code of Spatial Planning, Urbanism and Construction (Law 169/2026):
| Stage | What the law provides | What protects you |
|---|---|---|
| Reservation agreement | Up to 5% of the price, for a period of up to 60 days | If the preliminary contract is not signed through the sole fault of the developer, the money is returned in full within 30 days |
| Preliminary contract | Only before a notary, and only after the building permit has been registered in the land book | The notary applies to register the contract on the same day, or at the latest on the next business day |
| Structure stage | Up to 25% of the price may be spent from the advance payments | Every expenditure requires an "approved for payment" confirmation from the site supervisor |
| Building systems stage | Only after the structure, up to 20% of the price | The same confirmation, and only for this project |
The developer may not direct the advance payments to any other use, not even to another project of its own. A developer who does so faces a fine of 1% of its turnover in the preceding year. And something worth understanding: the special account is in the developer's name, and it does not have the status of an escrow account.
A preliminary contract is signed only before a notary and only after the building permit has been registered in the land book, and the notary applies to register it immediately.
Who finances the construction, if not you?
This is the question worth asking every developer. The spending caps in the law narrow the possibility of building at the expense of buyers' funds, so a project needs its own source of financing: the developers' equity, bank financing, or a combination. A developer without such a source may get stuck even before collecting money from buyers, and in this sense the law does its job: the risk is stopped before it reaches the buyers' money.
Every source of financing has a side that needs checking. Where construction is financed by equity alone, it does not depend on a bank's credit decision, but the stability of the project depends on the stability of the developers. Where a bank finances, it checks the project and releases money according to progress, but it has a charge that ranks ahead of you. Ask the developer for a written explanation of the financing structure, and check what stage your unit is at, not only the project as a whole.
What does Romanian law not solve?
| Gap | The legal position | What to do |
|---|---|---|
| No security requirement | Under the Code the developer is responsible for completing construction, but is not required to provide a guarantee or policy protecting the advance payments. In Israel, the Sale Law (Assurance of Investments) requires security, such as a bank guarantee, as soon as the seller has collected more than 7% of the price, but it does not apply in Romania | Ask the developer for a written answer: what additional protection, beyond Romanian law, is there for my funds? |
| Insolvency | The annotation of the preliminary contract in the land book guarantees nothing. Article 131 of Law 85/2014 allows the insolvency administrator to perform such a contract only when several conditions are met together: the price has been paid or can be paid, the buyer is in possession of the property, and the price is not below market value. A unit still under construction is not in your possession, and the law is silent on the money in the special account | Ask your lawyer, and keep payments low until construction progresses |
| The ten-year insurance | Mandatory for the developer and the contractor, but it covers defects discovered after acceptance, not a developer who disappears during construction | Do not regard it as protection against collapse |
Because the protection of the preliminary contract in insolvency is limited, the most effective tool is the amount. The less you have paid before the structure and the building systems actually exist, the smaller your exposure.
How do you check a Romanian developer before paying?
| What to check | Where | What to look at |
|---|---|---|
| The signing company | The ONRC trade register, by full name and registration number (CUI) | That it is active, and who owns it |
| Insolvency | The insolvency register, where a basic search is free of charge | That there are no open proceedings |
| Lawsuits | portal.just.ro, the courts portal | Many claims by buyers are a red flag, a single supplier claim less so |
| Registration of the plot | An extract from ANCPI ePay, for 20 lei | That the company is registered as owner, what appears in Part III, and that the permit has been registered |
| The special account | Written confirmation from the bank before the preliminary contract | That the account exists, is in the company's name, and that its number matches the one in the contract |
| The site supervisor (diriginte de șantier) | The register of authorised supervisors of the State Construction Inspectorate, ISC | Who signs off the expenditure, and whether they are authorised |
Two rules of conduct complete the check. Transfer money only to the account in the contract, and if an email arrives with "updated account details", stop everything. And have your own lawyer go through the preliminary contract: the company's lawyer owes duties to the company, and the question of what will become of your money and your registered right in a collapse is a question for your own representative.
If the developer does get stuck, what is registered in your name?
As long as the final contract has not been signed, you are not the registered owners. The land book shows an annotation of the preliminary contract, which prevents the developer from selling the same unit to someone else. If insolvency proceedings are opened, the administrator will perform the contract only under the conditions described above. Therefore, after every transfer, make sure that the annotation is still in place and that the payment went into the correct account, and keep every confirmation.
Before the preliminary contract: how we check a developer
We carry out the checks on the list independently, check that the preliminary contract complies with the requirements of article 422, make sure that the details of the dedicated account and the supervisor appear in the contract, and ask the developer in writing about the financing structure and about security beyond the law. The notarial and registration steps are carried out by a notary and a lawyer licensed in Romania.
The information is current as of October 2026 and is not legal, tax or financial advice. The description of the laws is a general summary, and the binding text is the one published in the Monitorul Oficial. Before signing, it is advisable to consult an independent lawyer.
Frequently asked questions
If the developer in Romania goes bankrupt, what happens to my apartment or villa?
Before the final contract the unit is not registered in your name as owner. What is registered is the preliminary contract, which protects against a sale to someone else. In insolvency the administrator performs it only under the conditions set by article 131 of Law 85/2014, including that the property is in your possession.
Is there a bank guarantee in Romania as under the Sale Law in Israel?
No. The Israeli law does not apply to a project in Romania, and Romanian law does not require a guarantee. The protection is built differently: a dedicated account and spending caps for each construction stage.
How will I know that the money went into the dedicated account?
The account details should appear in the contract, and the bank's confirmation that it exists should be in your hands before payment. Transfer only to this account and keep the transfer confirmations.
How much may the developer collect under a reservation agreement?
Up to 5% of the price, for a period of up to 60 days. If the preliminary contract is not signed through the sole fault of the developer, the amount is returned in full within 30 days.
Read next · 7 min readA Will for an Israeli With Property in Romania: Choice of Law, Form of the Will and Coordination With the Will in IsraelHow to write a will that works for property in Romania: Regulation 650/2012 and choice of law, notarial or handwritten wills, reserved shares, the Israeli will.Read the guideSources
- Legea 207/2025 - legislatie.just.ro
- Codul amenajării teritoriului, urbanismului și construcțiilor, Legea 169/2026 - Monitorul Oficial nr. 661/10.8.2026 (PDF)
- ONRC - Oficiul Național al Registrului Comerțului
- ONRC - acces la registrele de insolvență
- Portalul instanțelor de judecată
- ePay ANCPI - extras de carte funciară
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.