Three Ways a Real Estate Deal Abroad Fails, and the Check That Would Have Stopped Each One

When a real estate deal abroad falls apart, it is easy to point to the event that exposed the problem: the municipality that refused, the developer who disappeared, the bank that pulled out. But in most cases the problem was there from the start. It was created on the day of signing, when one check was not done, or was not done by the right party.

In this guide we go through three patterns that recur in deals by Israelis abroad. The scenarios here are hypothetical examples built to illustrate the pattern, not a description of a particular case or client. For each we ask two questions: at what moment did the deal go wrong, and which check would have stopped it. At the end we look at what this means in Romania today.

1Which checks should every deal pass before signing?

Three, in order, and you move to the next check only if the deal passed the previous one:

1. An economic check. A business plan with all the expenses and all the income, on conservative assumptions, that also includes the sources of money and a scenario in which something is delayed.
2. A planning and physical check. A visit to the property, the building rights, the permit conditions, meetings with an architect and a contractor, and realistic timetables.
3. A legal check. Ownership, registration, charges, debts and agreements, by a lawyer who represents only you.

Each filter catches a different kind of problem. In the three patterns below, each time a different filter is the one that would have saved the deal.

2Pattern one: why does a building conversion get stuck without occupancy approval?

Suppose an experienced investor buys a private house in order to convert it into several apartments. The business plan looks good, the works are completed and the apartments have already been sold. Then it turns out that the local authority will not grant occupancy approval, because the permit required parking spaces that were not provided. No one on the team pointed out the requirement at the start, and a solution that depended on part of a neighbour's plot was never finalised.

The problem was not in the construction. It was written in the permit all along. The deal went wrong on the day the team was chosen: if the professionals are chosen by someone with an interest in the deal, for example an agent who is also a partner, and if they are chosen on price alone, no one is obliged to tell you what the permit requires.

In Romania, the document that sets out the planning requirements for a plot is the urban planning certificate (certificat de urbanism), and the permit itself is called autorizație de construire. And anyone buying a unit from a developer should know: under Article 422(5)(k) of Law 169/2026, the developer may hand over the home only after acceptance of the works and with permanent utility connections. The question of occupancy is part of your deal.

3Pattern two: what is dangerous about buying off-plan before there is a permit?

Suppose an Israeli couple buys an off-plan apartment from a developer building abroad. The contract states explicitly that there is no permit yet. The developer undertakes to obtain it within a year, with extensions of a year each time up to three years. Handover is set for 24 months from receipt of the permit, and the right to cancel arises only 18 months after the last date for handover. The buyers do not have a lawyer of their own read the contract, and the money is deposited with the developer's lawyer.

Each condition sounds reasonable on its own. Together: up to three years for the permit, plus 24 months to handover, plus 18 months until cancellation is possible. On paper, the buyers may wait six and a half years before they have a clear right to exit. The contract did not lie. No one on their side added up the deadlines.

In Romania today such a deal cannot be signed in the same form. Under Article 422 of Law 169/2026, a preliminary contract for a future unit is signed only before a notary and only after the building permit has been registered in the land book and there is a land book extract for the unit (Article 422(7)). A reservation agreement is valid for up to 60 days and the reservation fee does not exceed 5% of the price (Article 422(9)). Down payments go into a separate project account, and the developer spends from them only up to caps by construction stage and with a site supervisor's approval (Article 422(10)).

4Pattern three: what happens when you sign a purchase before the financing is secured?

Suppose a developer signs a preliminary agreement to buy a building under construction, pays a down payment and undertakes to complete payment within a few months. The plan: sell apartments off-plan and raise financing from a bank or a private lender. Demand weakens, sales stop, the lenders slow down or pull out, and a private investor refuses to fund the completion of construction as well. After an extension or two, the sellers cancel the agreement and forfeit the down payment.

It is easy to blame the market or events. But the deal went wrong on the day the agreement was signed, when the whole plan rested on three sources, none of which was secured: pre-sales, negotiations with lenders, and a single investor who in the end was also counted on for the money to complete construction.

In Romania there is a further reason to secure financing in advance. Since a preliminary contract is signed only after the permit has been registered, and from down payments only up to 25% of the price may be spent on the structure and then up to 20% on building services, the developer funds the land, the design and the permit alone. And a local bank that agreed in principle at an introductory meeting is not bound by it. Ask it in writing, before buying the land, what it is willing to finance and on what terms.

5Which check would have stopped each pattern?

6A combined checklist before signing

• Read the whole permit, including the conditions: parking, green areas, height and number of units.
• If a solution depends on a neighbour, settle it in a signed agreement before buying.
• Choose professionals who work only for you, based on experience with the local authority and not only on price.
• Add up all the deadlines in the contract and write down the latest date on which you can exit.
• Check who holds the money, and in Romania make sure the down payments go into the project's separate account.
• Map sources and uses: how much for the purchase, how much to complete construction, and where each amount comes from.
• Do not rely on a single source of financing, and decide in advance at what stage you stop and walk away.
• Visit the site. Up-to-date photos from the ground are worth more than any presentation.

7What to do before signing?

Before any signing, ask which of the three filters has not yet been completed. If the answer is "one of them", it is too early to sign. We accompany Israelis in checking the deal and reading the contract and the planning documents, together with lawyers and notaries licensed in Romania, who carry out the register checks, the signing and the registration under local law.

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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.