In brief
In Romania, buyers' money cannot fund the start of a project. Under Article 422 of the Planning and Construction Code (Law 169/2026), to which the rules of Law 207/2025 were moved, a preliminary contract is signed only after the permit has been registered in the land book, down payments go into a separate account, and they may be spent only according to the construction stages and with a site supervisor's approval. So the land, the design and the permit are funded from equity, partners or other financing, and sales are planned as a source that arrives late and in instalments.
Key takeaways
- 1There is no preliminary contract for a future unit before the building permit has been registered in the land book and a land book page has been opened for the unit (Article 422(6)-(7)).
- 2A reservation agreement is limited to 60 days and to 5% of the price, otherwise it is void (Article 422(9)).
- 3From the dedicated account you may spend up to 25% of the price on the structure, and only after that up to 20% on building services, each payment with the site supervisor's approval (Article 422(10)).
- 4Using down payments for another purpose carries a fine of 1% of the developer's turnover in the previous year, not of the amount diverted (Article 422(11)).
- 5In the cash flow table, separate money that enters the dedicated account from money you are already allowed to spend.
A developer who has built in Israel is used to thinking of pre-sales as part of the financing structure: the accompanying bank, the guarantees to buyers, and the money that comes in from them and makes building possible. Anyone who arrives in Romania with this template discovers that it does not work there.
This guide is written from the developer's side. It deals with one question: when buyers' money comes into a project in Romania, how much of it can be used, and what has to be funded without it. We wrote about the protections from the buyer's side in separate guides.
Can a project in Romania be funded from buyers' money?
Only in part, and only from a late stage. The rules known in Romania as the "Nordis law" set four things that directly affect your cash flow:
- No sale before a registered permit. You may undertake to sell a future unit only after the building permit has been registered in the land book (Cartea Funciară) and pages have been opened for the units. The preliminary contract is signed only before a notary.
- A short, small reservation. A reservation agreement lasts up to 60 days, and the reservation fee does not exceed 5% of the price.
- A separate account. Down payments go into a developer's bank account dedicated to this project only.
- Staged spending. Money is spent from the account according to the construction stages, up to fixed caps, and each payment is approved by the site supervisor.
The practical result: the land, the design, the consultants, the fees and the start of works are funded without a cent from buyers. A business plan that assumes otherwise will not hold.
A reservation agreement is limited to 60 days and to 5% of the price, otherwise it is void (Article 422(9)).
Which law applies today: Law 207/2025 or Law 169/2026?
Both, in different incarnations. Law 207/2025, published in Monitorul Oficial (the Official Gazette) No. 1133 on 8 December 2025, inserted the rules into Article 22 of Law 10/1995. The new Planning and Construction Code, Law 169/2026, repealed that article (Article 576(3)(c)) and moved the rules, in almost the same wording, to Article 422. The Code has been in force since 25 August 2026 (Article 575(1)).
| Issue | What the rule provides | Article in Law 169/2026 |
|---|---|---|
| When you may undertake to sell | After registration of the permit and the opening of pages for the future units | 422(6) |
| Form of the preliminary contract | A notarial deed, once there is a land book extract for the unit | 422(7) |
| Registration of the contract | The notary files for registration on the day of signing or the next working day | 422(8) |
| Reservation agreement | Up to 60 days and up to 5% of the price. If the contract is not signed solely through the developer's fault, they refund everything within 30 days | 422(9) |
| Account and caps | A separate account for the project; up to 25% for the structure and after that up to 20% for building services, with the supervisor's approval | 422(10) |
| Other use of the money | Prohibited; a fine of 1% of the previous year's turnover, if the act is not a criminal offence | 422(11) |
| Handover to the buyer | Only after acceptance of the works and a permanent connection to utilities | 422(5)(k) |
When does buyers' money come in, and when may it be spent?
The convenient way to plan is to divide the project into stages and ask, at each one, where the money comes from and what may be done with it.
| Stage | Buyers' money | Who funds |
|---|---|---|
| Land, design, permit procedure | None. A preliminary contract cannot be signed | Equity, partners, external financing |
| The permit is registered and the land book pages are open | Preliminary contracts are signed, down payments go into the dedicated account | Still mainly your own sources |
| Structure | Up to 25% of the price, according to the supervisor's approvals | Down payments up to the cap, and the rest from your sources |
| Building services | A further up to 20% of the price, only after the structure is completed | Down payments up to the cap, and the rest from your sources |
| Finishing, acceptance and handover | Article 422 sets no cap for this stage | According to the contract; handover only after acceptance and connections |
The last row needs attention. The law does not specify how the balance of the down payments is handled after the building services stage. That is settled with a local lawyer and in the wording of the contract. In any case, since handover is possible only after acceptance of the works and a permanent connection to water, electricity and sewerage, some of the receipts will arrive only at the end.
From which sources do you build a lawful funding mix?
From four components, each of which should be planned before buying the land:
- Equity for the pre-permit stage. The land, the design, the consultants and the fees are all paid before the first buyer signs. This is the amount you need to know first.
- Partners. If part of the capital comes from partners, the agreement with them should set out what happens when the permit is delayed and the money is tied up much longer than planned.
- Bank or other construction financing. When you talk to a bank, ask explicitly how it treats the dedicated account and the pre-sales. Do not assume the answer will be the same as what you know from bank-accompanied projects in Israel.
- Staged sales. Down payments are a real source, but a late and limited one. In the plan, they are entered according to the pace of the supervisor's approvals, not the pace of signings.
Alongside the sources, two more things are needed: a margin for delays, because every delay in registering the permit pushes back the start of sales and every delay in the supervisor's approval pushes back money; and a contract with the contractor that fits this pace. A contractor who expects payment before the supervisor has approved creates a gap, and you fund that gap.
How does this differ from a bank-accompanied project in Israel?
In Israel, a buyer of an off-plan apartment usually receives security under the Sale (Apartments) (Assurance of Investments of Persons Acquiring Apartments) Law, most often a bank guarantee, and the developer's cash flow is built around it. In Romania, Article 422 does not require such a guarantee. The buyer's protection comes from three other components: registration of the contract in the land book, a separate account and spending caps by stage.
So the Israeli model cannot simply be copied and translated. If you are considering offering buyers an additional guarantee beyond the law, check with a local lawyer exactly what it will cover and how it fits with the dedicated account.
Which cash flow mistakes should be prevented in advance?
- Opening reservations too early. A reservation expires after 60 days. If by then there is no land book extract for the unit, a preliminary contract cannot be signed, and you may have to refund the money and lose the buyer. Open reservations only when registration of the permit is close.
- Counting down payments as free cash. The money in the dedicated account belongs to the project, but it is available only up to the caps and only with approval. The cash flow sheet should have two separate columns: "entered the account" and "allowed to spend".
- Underestimating the fine. The fine for other use of down payments is measured against the previous year's turnover, not the amount transferred. For a developer with several projects it may be far larger than the mistake itself.
What to prepare for buyers who ask "where is the guarantee"?
Israeli buyers will almost always ask this question. You have no guarantee under the Israeli Sale Law to offer, but there are documents that address the concern. It is worth preparing them in advance and presenting them without being asked:
- A land book extract in which the permit is registered, and an extract for the buyer's unit.
- The details of the dedicated account, and the clause in the contract providing that down payments go into it.
- The supervisor's approvals for every payment made from the account.
- A payment schedule linked to construction stages and not to dates.
What to do before signing for the land?
Start with two numbers: how much money is needed until the permit is registered, and how much until the structure is standing, assuming that no buyer has paid. These are the basis for the conversation with partners and with a bank. We accompany Israeli developers in building the transaction structure and the contracts against the rules of Article 422, together with lawyers and notaries licensed in Romania, who execute the preliminary contracts, the registration in the land book and the actions under local law.
This article is general information as of October 2026 and is not legal, financial or tax advice for a specific case. The binding wording of Article 422 is the one published in Monitorul Oficial. Before building a financing plan for a project, it is worth checking it with a Romanian lawyer and a financial adviser.
Frequently asked questions
When may a developer in Romania start selling off-plan apartments?
Only after the building permit has been registered in the land book and a land book page has been opened for the future unit. The preliminary contract is signed before a notary, and the notary files it for registration on the day of signing or the next working day (Law 169/2026, Article 422(6)-(8)).
How much may a developer collect under a reservation agreement?
Up to 5% of the price, for a period of 60 days at most, otherwise the agreement is void. If the preliminary contract is not signed solely through the developer's fault, they refund the whole amount within 30 days (Article 422(9)).
Can down payments be moved from one project to another?
No. Down payments sit in a separate project account and are used only for that project. Other use is fined at 1% of the developer's turnover in the previous year, if the act is not a criminal offence (Article 422(10)-(11)).
Does Romanian law require the developer to give buyers a bank guarantee?
Article 422 does not require such a guarantee. The protection it provides is registration of the contract in the land book, a separate account and spending caps by stage. A developer offering an additional guarantee should check with a local lawyer what it covers.
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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.