In brief
The central tool in real estate due diligence in Romania is the Extract CF, an extract of the registration from the land book (Cartea Funciară), the equivalent of a tabu extract. But a clean registration does not guarantee a clean property: you must also check building permits, the zoning plan, unregistered debts and infrastructure. The check must be legal as well as planning and technical, and must be carried out before signing.
Key takeaways
- 1The Extract CF consists of three parts: the property description, the registered owner, and mortgages and encumbrances. The third part is the most critical.
- 2A clean registration in the land registry is not a clean property: construction without a permit, a change of designated use, municipal tax and management fee debts and lease agreements do not necessarily appear in the registration.
- 3You must check that the registered area matches the actual area, and that all the registered owners are party to the transaction.
- 4The check includes a current Extract CF, ownership history, tax clearance certificates, a building permit, an occupancy certificate and a technical report.
- 5Intabulare registration should be a material condition in the contract and not a technical clause that can be waived.
Almost every Israeli investor considering a real estate purchase in Romania reaches, at some point, the same question: how do you know that the property is really clean, with no debts, encumbrances or legal problems that will surface later?
In Israel most buyers know how to check this: a tabu extract, the betterment levy, building-and-urban-planning schemes. In Romania the documents are different and the language is different, and most Israelis simply do not know where to start. Below is what is actually checked, and why a clean registration in the land registry is only half the picture.
What is an Extract CF and how do you read it?
The most important document in a real estate check in Romania is called the Extract de Carte Funciară, in short the Extract CF: an extract of the registration from the Romanian land book (Cartea Funciară), the Romanian equivalent of a tabu extract. It is a government document that can be obtained within a short time through the land registry offices (ANCPI) or online, and it is divided into three parts.
| Part | What it contains | What to check |
|---|---|---|
| Part A | Property description: address, area, cadastral number | That the data matches the situation on the ground |
| Part B | The registered owner | That the seller holds the rights and that all the owners are party to the transaction |
| Part C | Mortgages and encumbrances, caveats, third-party rights, attachments and contractual restrictions | That there are no rights or debts burdening the property |
Part A describes the property itself. Our rule: take the document, go to the site and check with your own eyes. If the property is registered as 180 sq m and in practice it is 220 sq m, there is a planning problem here that can blow up in the future.
Part B shows who the registered owner is. This is the place to verify that the seller sitting across from you is indeed the rights holder, and that if there is more than one owner, all of them are party to the transaction. Israeli investors sometimes arrive at negotiations with one person, without knowing that a spouse or a hidden partner must also sign.
Part C is the most critical of all: existing mortgages and encumbrances, caveats, third-party rights, attachments and contractual restrictions. This is the part where transactions close or fall apart. A property that looks perfect in the photographs can be legally “occupied”, and only this document will reveal it.
A clean registration in the land registry is not a clean property: construction without a permit, a change of designated use, municipal tax and management fee debts and lease agreements do not necessarily appear in the registration.
Does a clean registration in the land registry mean the property is clean?
No. There are quite a few properties in Romania whose Extract CF looks entirely clean, and nevertheless there are problems behind the scenes that will not surface in a land registry check alone:
- A villa built without a valid building permit.
- A property designated under the zoning plan (PUG/PUZ) for a change of use.
- Municipal tax and management fee debts that burden the apartment but are not registered in the land registry.
- A long-term lease agreement that continues to bind you after the purchase.
- Infrastructure problems (water, electricity, sewage) that do not appear in the land registration.
Due diligence in Romania must be both legal and planning-related, not only a land registry check.
An example from the field: what did due diligence reveal before the purchase of a villa?
About a year ago an Israeli investor approached us, let us call him David (identifying details changed), who was considering buying a villa in a suburb of Bucharest from a private seller. The price looked excellent, the villa was beautiful and the seller was pressing to close quickly. We recommended that he order a full due diligence before signing any document.
The check revealed two findings. The Extract CF showed a caveat by a Romanian bank that had not been removed, even though the seller claimed that the loan had been repaid. And the planning check discovered that an entire floor of the villa had been built without a permit. David gave up the transaction, and the difference in the amount of the risk avoided is estimated at tens of thousands of euros.
What must be checked before signing a contract in Romania?
The check is divided into three sides:
| Area | What is checked |
|---|---|
| Legal | Current Extract CF (up to 30 days old); ownership history over the last decade; tax clearance certificate (Certificat de atestare fiscală); certificate of no debts to the owners' association (house committee) |
| Planning | Valid building permit; occupancy certificate (Proces-verbal de recepție); conformity with the regional zoning plan |
| Technical | Technical report on the property; infrastructure check; for villas with land - a physical boundary check against what is registered |
A shortened version for ticking off appears in the checklist “6 checks before signing” on the firm's website.
How do we approach due diligence in Romania?
When we accompany an investor in a purchase in Romania, the buyer receives the Extract CF before signing, not after. We demand to see all licensing and permit documents, translate what is necessary and carry out an independent check against the registry office even when the seller or the broker presents “ready” documents on their behalf. The contract is drafted so that Intabulare registration is a material condition of the transaction, not a technical clause that can be waived. What must appear in the contract itself for the check to protect you is detailed in the guide to the preliminary contract in Romania on the firm's website.
A smart investor does not skip checks to save time. He or she checks so as not to pay for it twice, later.
What is stated in this article is general information only and does not constitute legal advice, tax advice or an investment recommendation. Registration laws and procedures in Romania may change. Before any decision or legal action, it is advisable to obtain individual advice tailored to your circumstances.
Frequently asked questions
What is an Extract CF in Romania?
Extract de Carte Funciară is an extract of the registration from the Romanian land book, the equivalent of a tabu extract. It can be obtained within a short time through the land registry offices (ANCPI) or online, and it is divided into three parts: the property description, the registered owner, and mortgages and encumbrances.
Does a clean registration in the Romanian land registry guarantee that the property is clean?
No. There may be construction without a permit, a change of designated use under the zoning plan, municipal tax and management fee debts that are not registered, a long-term lease agreement and infrastructure problems. The check must therefore be legal and planning-related, not only a land registry check.
Which documents should be demanded from the seller in Romania?
A current Extract CF (up to 30 days old), a tax clearance certificate (Certificat de atestare fiscală), a certificate of no debts to the owners' association, a valid building permit and an occupancy certificate (Proces-verbal de recepție), as well as the ownership history over the last decade.
When do you receive the Extract CF - before signing or after?
Before signing. When we accompany an investor, he or she receives the Extract CF before signing, and the check is carried out independently against the registry office even when the seller or the broker presents documents on their behalf.
Why is it important that Intabulare registration be a condition in the contract?
Because it is a material condition of the transaction and not a technical clause that can be waived. Accordingly, the contract is drafted so that registration is a material condition.
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