Real estate developers to be able to request a maximum 10% deposit when signing a pre-contract – Draft Law

On 9 October 2024, a draft law was submitted for debate in the Romanian Senate that would complement Law no. 10/1995 on quality in construction, such that upon signing the promissory sales agreement, the real estate developer is allowed to request a maximum deposit of 10% of the total price of the real estate under transaction.

Under the draft law, the following will pertain upon conclusion of the promissory sales agreement:

• the real estate developer may request a maximum deposit of 10% of the total price of the real estate under transaction.
• the amount of deposit requested may in fact be higher than this, up to a maximum of 40% of the total price of the real estate, if the real estate developer has taken out an insurance policy to protect the investment with an insurance company.
• the amounts paid by way of a deposit shall be paid into a special account belonging to the company dedicated to the real estate in question and may only be spent by the real estate developer for the purposes of developing the project.

The draft law brings the following benefits:

• reducing buyers’ financial exposure to risks associated with the construction of property and ensuring fairer contractual terms, thereby reducing the risk of losing large sums of money if the property is not delivered as contracted.
• building confidence in real estate transactions and facilitating a more secure and predictable trading environment for all parties.
• encouraging real estate developers to adopt more transparent business practices and to work with insurance companies to guarantee the delivery of buildings on their terms.

Source: Draft Law (Senate registration no. B519/2024) supplementing Law no.10/1995 on quality in construction, as republished.