In brief
An investor buys a property that someone else designs, builds and undertakes to finish, so their main risk is the developer. A developer is the one who designs, builds and sells, and every failure along the way falls on them. In Romania this shift turns the law from a tool that protects you into a list of duties: under Article 422 of Law 169/2026, you may not sign a preliminary contract with buyers before the building permit has been registered in the land book.
Key takeaways
- 1As investors, your main risk is the developer. As developers, the risk is you, and there is no developer above you to sue.
- 2A developer checks one layer deeper: the land, the permit, the contractor, the market and the financing, not just a property and a contract.
- 3In Romania, under Article 422(6) of Law 169/2026, a preliminary contract with a buyer is signed only after the building permit has been noted in the land book.
- 4The rules that protected you as buyers, such as a reservation of up to 60 days and up to 5% of the price (Article 422(9)), become your duties as sellers.
- 5A developer needs a complete local team, and before every deal three filters: economic, planning and physical, and legal.
Many Israelis who have bought one or several apartments abroad reach the next question at some point: why not build ourselves? The thought is natural. You have seen how developers work, you have understood the contracts, and the next step seems to be simply a bigger deal.
Legally, that is not the case. Moving from buying to developing changes your side of the transaction. This guide explains exactly what passes to you, at which points the risk grows, and what is worth checking before committing to land. The examples are taken from Romania, but the logic is similar in every country.
What is the legal difference between an investor and a developer?
An investor buys a finished product, or a product that someone else undertakes to finish. A developer produces the product: finds land, designs, obtains a permit, builds and sells. The difference sounds technical, but it determines who bears responsibility when something goes wrong.
When you buy, you have a contract and a counterparty you can make demands of. When you develop, you are that party. The decisions on design, contractor, materials and pace are yours, and every mistake costs you directly.
A developer checks one layer deeper: the land, the permit, the contractor, the market and the financing, not just a property and a contract.
How does the risk map change when you switch sides?
| Issue | When you buy | When you develop |
|---|---|---|
| Control and exposure | Little control, exposure to one property | Full control, exposure to the whole project |
| What you check | The property, the developer and the contract | The land, the permit, the contractor, the market and the financing |
| Capital and financing | Equity and sometimes a mortgage on one property | Equity for land and design, financing for construction |
| Timetable | From signing to handover | From finding the land to selling the last unit |
| Team | An independent lawyer, sometimes an agent | Lawyer, architect, engineer, contractor, accountant, agent |
| Regulation | Law that protects you | Law that imposes duties on you |
| Exit | You sell one property when it suits you | You sell a project on a timetable the market sets |
The row that surprises people most is regulation. Anyone who bought an off-plan apartment in Romania knows the rules as a shield. As developers, the same rules define what you may do and when.
The exit changes too. An investor decides when to sell one property. A developer has to sell a whole project, at the pace the market sets, and often even before construction is finished. And there is a side that does not appear in the business plan: an investor receives an update, while a developer receives an early-morning phone call about a problem on site, and has to decide immediately, from another country and in another language.
Which new duties apply to you as developers in Romania?
Since 25 August 2026, the sale of future units has been governed by Article 422 of the Planning and Construction Code, Law 169/2026. Two of its rules change the plan of every new developer:
- No sale before a registered permit. A preliminary contract with a buyer is signed only after the building permit has been noted in the land book (Cartea Funciară) (Article 422(6)). The whole stage before that is funded without buyers' money.
- A limited reservation. A reservation agreement with a buyer lasts 60 days at most, and the reservation fee does not exceed 5% of the price (Article 422(9)). As buyers this is a protection; as sellers it is a limit on the pace at which you can close deals.
A developer who does not know these rules before buying land will discover them midway, when the cash flow has already been built on them. We wrote about their effect on the financing plan in a separate guide on developer cash flow and pre-sales.
Why do the timetable and financing become a legal question?
Because a developer funds stages, not a property. First the land and the design, where there is usually no income yet, and then construction, where sources must be available even when something is delayed. So the first question is not "how much does it cost", but "what happens to the cash flow if the timetable stretches".
A developer's clock starts long before signing: finding land, checks, design, the permit procedure, construction, marketing and handover. Most stages depend on authorities and on other people. A developer's timetable needs to include a margin for delays, not just target dates.
Who needs to be on the team, and to whom are they loyal?
A careful investor manages mainly with an independent lawyer. A developer needs a complete team in a foreign country: a local lawyer, an architect, an engineer, a contractor, an accountant or tax adviser, and an agent who knows the buyers.
Two rules save a lot of headaches. The first: choose the professionals based on experience with the local authority, not on the lowest quote. The second: someone with an interest in the deal, for example an agent who is also a partner, should not be the one who chooses the architect or the lawyer. The team must work for you.
In a foreign country, gaps in language, culture and familiarity with regulation increase the pressure on every decision. The ability to rely on a trustworthy local team is an essential part of the work, not a luxury.
How do you filter a deal before committing?
Every deal goes through three filters in order, and a deal that fails one of them is rejected before anyone boards a plane:
- Economic feasibility. A conservative business plan that includes every expense, and a delay scenario.
- A planning and physical check. What may be built on the land, what the local authority will actually require, and who will build.
- A legal check. The land, the registration and the charges.
Checklist: are you ready to switch sides?
- You have already bought properties abroad, and you know how to read a contract, a land book extract and a permit.
- You have equity that can stay tied up for several years without changing your life.
- You are willing to come to the site, more than once, and not rely only on what you are shown.
- You have a local lawyer who works only for you, even before you have chosen land.
- Your timetable leaves room for delay.
- You are able to walk away from a deal you love when one of the checks fails.
If most of the items do not apply, or you are looking at development because it sounds like a faster route, it is probably still too early. You can keep investing, and examine the developers in front of you through a developer's eyes.
What to do before signing for your first land?
Choose one country and one segment, assemble the local team before you look for land, and pass every deal through the three filters. We accompany Israeli developers in building the transaction structure, reviewing the documents and preparing the questions for the team, together with lawyers and notaries licensed in the country where the property is located, who carry out the actions under local law.
This article is general information as of October 2026 and is not legal or investment advice for a specific case. Before any decision on a project, it is worth consulting a lawyer and a tax adviser who work only for you.
Frequently asked questions
What is the difference between a real estate investor and a real estate developer?
An investor buys a property that someone else has designed and built, or undertakes to build. A developer finds land, designs, builds and sells, and bears responsibility for all the stages. So they check more, finance in stages and are more exposed to delays and regulation.
Can a developer in Romania sell apartments before there is a permit?
No. Under Article 422(6) of Law 169/2026, in force since 25 August 2026, a preliminary contract with a buyer is signed only after the building permit has been noted in the land book.
Can you develop a project abroad without living there?
Yes, but not without visiting. The local team does the day-to-day work, and you make the decisions. It is worth seeing the land with your own eyes and not settling for what you are shown.
Is experience as an investor enough to start developing?
It helps, because anyone who has bought property abroad knows the contracts, the registration and how developers work. But it does not replace experience in design and construction, so the local team is essential.
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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.