Changes concerning the purchase of agricultural land from 1 January 2014

The measures provided for restrictions on the purchase of agricultural land by (EU) foreigners in the Treaty of Accession of Romania to the European Union will be ceased from 1 January 2014.

This allows citizen of an EU Member State, with effect from 1 January 2014 to acquire agricultural land in Romania, even if they are not domiciled in Romania.

So far, the only possibility to purchase agricultural land by foreigners was trough Romanian legal persons. This means that foreigners had to set up a Romanian legal entity, which was allowed to buy agricultural land in Romania. In practice, this indirect land acquisition has been established. However, further effort is obliged not only with the establishment, but also with the "operation" of a legal person. On the other hand, this type of land purchases also has advantages, such as the limit of liability which is mediated by the legal persons.

In the meantime, significant impediments for foreigners were announced in regard to the acquisition of agricultural land in Romania by politicians of all parties. However, a number of arrangements announced raised significant concerns to the EU Commission. All that remained of this discussion is the imminent introduction of pre-emptive rights in connection with the acquisition of land.

As of 1 January 2014 the seller must, after receiving an offer for the purchase of agricultural land by an (EU) foreigner or a Romanian citizen, submit this offer to the town hall and request the notification of the pre-emptor. The notification request must be accompanied by the offer that must include at least the name of the seller, the address, the location and the area of ​​the affected land including the land documents, land type, as well as the purchase price. As time limit for the exercise of the pre-emptive rights, a period of 30 days from application is scheduled. The town hall is responsible for notifying the pre-emptor.

Pre-emptors are:

• Natural persons, the co-owner or tenant of the land concerned,
• Natural persons who owe land in the immediate neighborhood as well as
• Natural persons with an age of up to 40 years who are resident in the area, which the parcel of land is allocated to and operates agricultural.

Finally, pre-emptive rights are provided in favor of the State, represented by the new authority for the regulation of the property market.

The new rules mean de facto a complication and additional formalism in connection with the acquisition of agricultural land for both Romanian citizens as well as for (EU) foreigners. It remains to be seen how these regulations will impact the practice.

Contact Person:

Dr. Heinrich Nerlich, Osnabrück

Helge Schirkonyer, Bukarest