In brief
A transparent sales mechanism for Israeli buyers is not a translated contract but a decision, made before the first sale, about the entire process: which documents are presented, at what stage and at what level of transparency. It relies on a Hebrew-speaking party throughout the process, the buyer's ability to check the rights independently, and a payment schedule tied to construction progress.
Key takeaways
- 1Translating a standard sale contract, Israeli or Romanian, into the other language does not solve the problem.
- 2An Israeli buyer is deterred by uncertainty and not by Romania itself.
- 3Three foundations build confidence: a Hebrew-speaking party throughout the process, an independent check of the rights, and a payment schedule tied to proven construction progress.
- 4The notary is a neutral party and does not draft the developer's protective clauses, so the developer's lawyer must draft them before the meeting at the notary.
- 5The sales mechanism is built once, before the first contract, and is not fixed retroactively.
What does an Israeli developer selling units to Israelis in a project in Romania need?
The developer needs a mechanism that makes it possible to sell units to Israelis without opening a legal front in two countries at once. An Israeli developer developing a project in Romania reaches the same point at some stage: there is land, there is a permit, there is a marketing plan, and one central thing is missing. The answer is not found in a sale contract translated from language to language, but in a decision made before the first sale about the full process: which documents are presented, at what stage and at what level of transparency, so that the buyer gets enough confidence to transfer money for a property he sees for the first time in photographs.
An Israeli buyer is deterred by uncertainty and not by Romania itself.
Why doesn't translating an Israeli or Romanian contract solve the problem?
The most common mistake at this stage is taking a standard sale text, Israeli or Romanian, and translating it into the other language. The document was originally written for one legal reality, and suddenly it is required to serve two.
An Israeli buyer usually does not know the Romanian mechanisms protecting his money, and does not know how to read a Romanian land registry extract (Cartea Funciară) in order to verify that the rights in the property are clean. When the contract is all he receives, in dense legal language and without explanation, he usually does not stop to try to understand - he moves on to the next project on the list, even if your project is better.
What are the three foundations that build confidence in an Israeli buyer?
From accumulated experience accompanying such transactions, an Israeli buyer is almost never deterred by Romania itself - he is deterred by uncertainty. Three foundations change this in practice:
- A Hebrew-speaking party who is present throughout the process and not only at the signing stage.
- The buyer's ability to check independently, even partially, the status of the rights in the property before transferring money.
- A payment schedule in which not the entire amount is paid in advance, but according to construction progress that can be proven.
Alongside this, it is worth preparing in advance a uniform document package for every buyer:
- A current land registry extract
- Confirmation that the development company is registered and authorized to sell
- The status of the building permit as it is, including an indication of whether it is a final permit or an interim stage
A developer who prepares this package once saves himself many persuasion conversations later on.
What is the role of the notary and what is the role of the developer's lawyer?
The Romanian notary is a neutral and non-representative party: their role is to verify identity, register the transaction lawfully and make sure the documents are formally in order. A point that many developers miss is the assumption that once the transaction passes through a notary it is protected.
The notary does not draft for the developer the protective clauses, the cancellation terms or the allocation of responsibility toward the buyer. These are drafted by the developer's lawyer, even before reaching the notary's table. A developer who arrives there without the documents having already been formulated with legal accompaniment, in effect gives up the protection he thinks he is getting.
What happens when the sales mechanism is built on the move?
The most common failure is not a lack of good intentions but timing. Many developers build the sales mechanism on the move - a first transaction, a second, and only then does it become clear that the documents are inconsistent, that one buyer received a promise that another buyer did not, and that there is no uniform record of who was approved and when.
The moment a scrutinizing party arrives - a Romanian authority, a lending bank or a buyer who begins to ask hard questions - this inconsistency turns an innocent transaction into a real legal problem. Sometimes the exposure does not stay in Romania either: a disappointed Israeli buyer knows very well how to approach a lawyer in Israel, and even if the dispute is eventually resolved as a Romanian one under the applicable law, dealing with such an approach costs time and reputation.
How do you draft a payment schedule that the Israeli buyer understands?
It should be drafted so that it explains in advance, in plain Hebrew, what happens at each construction stage. One of the common sources of friction between a developer and an Israeli buyer is the payment schedule itself. A typical Romanian financing structure for a project under construction is built around defined progress stages - foundations, structure, finishing - and not around dates fixed in advance. An Israeli buyer, by contrast, is used to a more rigid timetable than the local market, and therefore tends to interpret every delay as a warning sign, even when it is a completely routine delay in a construction project.
The gap closes when the payment schedule explains in advance what happens at each construction stage, what the expected amount of the payment is and what happens if a particular stage is delayed. A developer who presents this as a clear table, and not as a legal clause inside a long contract, saves himself most of the tense conversations that come later. In projects sold off-plan, the Nordis Law ties the release of buyers' funds to the construction stages.
When do you build the sales mechanism, and what is worth doing before the first contract?
A good sales mechanism is built once, before the first contract with a buyer, and is not fixed retroactively after a problem has been discovered. It includes the text of the contract, the order of actions at the notary, the documents presented to the buyer and the protection of his money until delivery. A developer who invests in this in advance not only reduces legal risk - he gains a sales tool. Sophisticated Israeli buyers already know how to ask about all of this, and when the answer is ready and organized in advance, it is what closes the deal.
Disclosure: Adv. Ilan Leibovitch is also a real estate developer and a partner in Compass Group, the developer of Compass on the Lake in Romania. The firm does not represent buyers or investors in transactions with Compass Group or in its projects, and refers them to independent counsel.
The content of this article is general information only and does not constitute legal advice, tax advice or an investment recommendation. Laws in foreign countries may change, and specific circumstances may affect their application to a given case. Before any investment decision or legal action, it is advisable to seek individual advice.
Frequently asked questions
Is it enough to translate a Romanian sale contract into Hebrew in order to sell to Israelis?
No. The document was written for one legal reality and is required to serve two. An Israeli buyer usually does not know the Romanian protective mechanisms and does not know how to read a Romanian land registry extract, so a full process is required and not only a translation.
What builds confidence in an Israeli buyer in a project in Romania?
Three foundations: a Hebrew-speaking party throughout the process, the ability to check independently the status of the rights before transferring money, and a payment schedule tied to proven construction progress. It is worth adding a uniform document package for every buyer.
Does the Romanian notary protect the developer and the buyer?
The notary is a neutral party who verifies identity, registers the transaction and checks formal correctness. The notary does not draft the protective clauses, the cancellation terms or the allocation of responsibility - these are drafted by the developer's lawyer before the meeting at the notary.
When is it worth building the sales mechanism?
Once, before the first contract with a buyer. Building it on the move may create inconsistent documents, different promises to different buyers and non-uniform records.
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