Romanian Legal Update - Amendments to the urbanism and construction legislation

by Allen & Overy LLP

Allen & Overy LLP

New rules have been enacted in order to amend Law No. 350/2001 on urbanism and territorial planning (the Urbanism Law) and Law No. 50/1991 regarding the authorisation of the execution of construction works (the Construction Law). The above mentioned legislation was amended by the Emergency Government Ordinance No. 100/2016 (the Ordinance).

In a nutshell, the Ordinance brings clarifications to some of the previous legal provisions, provides new rules aimed at creating more efficient procedures for issuing urbanism documentation needed for investment projects and also increases the sanctions applicable in case of non-observance of the statutory obligations.

The main amendments brought by the Ordinance are summarised below.

Entering into force

The Ordinance entered into force on 27 December 2016. However, the administrative procedures which were initiated prior to this date in order to obtain various urbanism or administrative documentation will continue to be governed by the previous legal provisions.

Amendments to the Urbanism Law

A series of provisions regarding urbanism and territorial planning have been modified in order to provide more predictable construction regulations and to limit variations between the applicable construction regimes of neighbouring areas.

Restricting the circumstances when a Zonal Urbanism Plan (PUZ) can be prepared by the interested investors

The Ordinance limits the situations when the investors can initiate the elaboration of a PUZ in order to set forth the applicable urbanism parameters, such as the height level, the land use coefficient (CUT) and the land occupation rate (POT).

For areas located intra-muros (Romanian, intravilan), the investors could initiate the drafting of a new PUZ only if the area covered by the PUZ is bordered by at least three (3) public roads or by other natural elements.

Furthermore, in order to avoid the creation of isolated intra-muros areas, the Ordinance provides that a PUZ can be elaborated in order to change the classification of the land from extra-muros (Romanian, extravilan) to intra-muros only if the area covered by the PUZ: (i) has at least 5,000 sq.m. and (ii) is located in the immediate vicinity of the intra-muros area. However, these restrictions are not applicable if the infrastructure needed to access the extra-muros area is already in place or it will be built at the same time with the development of the investment envisaged for the respective area.

Further limitation of the circumstances when the Land Use Coefficient (CUT) can be increased

As a general rule according to the Urbanism Law, the CUT applicable for a given area can be increased only once and with no more than 20%. Before the enactment of the Ordinance, “areas of economic interest” were excepted from this rule, although this concept was not clearly defined by the legislation.

The Ordinance clarifies this matter and expressly provides that the CUT could be increased with more than 20% only in the following limitative circumstances: for industrial, technological or commercial parks, as well as for supermarkets and hypermarkets.

Clarifying the validity term of the urbanism documentation

The Ordinance clarifies what are the consequences when the urbanism documentation does not include a validity term. Although, according to the previous regulation, it could have been argued that in such case the urbanism documentation could be invalidated, the Ordinance now expressly mentions that the urbanism documentation which does not include an express validity term will be deemed valid until new documentation is enacted to replace or to modify the former one.

The current regulation also clarifies another issue which was debated in the past, namely the extension of the urbanism documentation’s validity term for investment projects that were commenced during the initial validity term. As the “commencement date” was not clearly determined or defined under the previous regulation, opinions varied in practice regarding the interpretation of such norm. The Ordinance settles this dispute, providing that, once the urbanism certificate is issued for the purpose of obtaining the building permit, the validity of the existing urbanism documentation is extended for the duration of the authorised works.

Reducing bureaucracy, encouraging e-governing and public access to urbanism documentation

The Ordinance assumes as objective reducing the actual intricate administrative procedures for obtaining urbanism documentations, as well as encouraging public access to building permits, urbanism plans and other urbanism documentation.

Modifications to the actual procedures involves creating single offices (Romanian, ghisee unice) within the administrative units, where the interested persons can submit all requests and file all documents that are necessary for the issuance of the urbanism documentation. As an exception, the requests and the documentation for the issuance of the environmental endorsements must be submitted with the competent environmental authorities.

Currently, single offices have been organised in large cities (Bucharest, Brasov, Sibiu, Timisoara etc.) and organising such single local offices for all administrative units throughout the country will still take time.

Another measure aiming to reduce bureaucracy involves the obligation of the public authorities to create and ensure within the next three (3) years the infrastructure required in order to receive online all requests and the documentation necessary for issuing urbanism certificates and/or building permits.

The public’s participation in the urbanism decisional process is also facilitated by introducing the authorities’ obligation to upload on their websites all the approved urbanism documentation.

Increased fines

The fines for breaching the obligations provided by the Urbanism Law were significantly increased from between RON 1,000 and 10,000 (approximately EUR 220 to 2,200) to between RON 10,000 and 50,000 (approximately EUR 2,200 to 11,100).

Also, the State Inspectorate for Constructions has now the obligation to suspend the construction works if it identifies irregularities, while previously the Inspectorate had only the right, and not the obligation, to suspend the works.

Main amendments to the Construction Law

The amendments regarding the authorisation of the construction works bring clarifications to a series of debatable previous provisions, as well as a significant increase in the limitation period for applying sanctions.

Increased limitation period for applying sanctions

The limitation period for identifying any breaches to the Construction Law and for applying sanctions for such breaches has been increased from three (3) years to five (5) years starting from the moment such breach occurred.

Limitation of the categories of constructions that can be erected on extra-muros areas

According to the Ordinance, building permits for projects located on extra-muros land can be issued only for infrastructure works, such as railroads, roads, electricity lines, gas and oil pipelines, agricultural constructions or other similar constructions. For clarification purposes, the Ordinance expressly provides that, building permits for extra-muros areas will not be issued for residential or touristic buildings, garages or other permanent constructions.

Specific purpose of the urbanism certificates issued for building permits

Given the previous unclear legal provisions, it was a common practice to use the same urbanism certificate that was obtained when elaborating a PUZ, in order to subsequently obtain the building permit.

According to the Ordinance, a separate urbanism certificate must be obtained with the specific purpose of obtaining the building permit, irrespective if a previous urbanism certificate was issued when approving the PUZ for the same project.

However, as an exception from the above, the Ordinance provides that the urbanism certificate used for the elaboration of a Detail Urbanism Plan (PUD) could also be used in order to obtain the building permit.

Source: Emergency Government Ordinance No. 100 of 15 December 2016 was published in the Official Gazette No. 1052 of 27 December 2016


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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