In an effort to ensure a more responsible, sustainable and ecologically-friendly approach to building projects and construction works, the Romanian Parliament recently enacted a new law to amend the existing construction quality law. The new provisions will come into effect on 31 August 2015.
The new law provides additional responsibilities and sanctions for building designers, building project appraisers, technical experts and other specialised personnel and imposes different construction taxes for the construction of new buildings and work on existing buildings as well as additional fines. The law also introduces the concept of sustainable utilisation of natural resources in regard to construction quality. The stricter conditions regarding the quality of the projects and related sanctions, along with the creation of a more environmentally-friendly approach to construction works are meant to improve the quality of the construction market in Romania.
The following are notable amendments to existing law:
- Reduction of the construction tax from 0.7% of construction expenses to 0.5% of the authorized value of the construction work. (This construction tax is payable to the Romanian State Inspectorate for Construction (“ISC”), excludes VAT and is not due for works ordered by investors/owners for structurally vulnerable buildings labelled as a class I seismic risk).
- The addition of an obligation for building designers to technically assist on all building execution stages that are performed based on the building project they have designed and to ensure that they are physically present at every relevant execution stage; building designers’ obligations to observe and assist, if the case, also extend to the period after the execution of the construction work and include post-utilisation of the construction works/building.
- Project designers and the specialised building project appraisers, to the extent of their actual involvement in the project, will be liable for supplementary expenses for additional construction work needed as a result of errors in project design.
- Building designers and other authorized specialists must have professional liability insurance policies in force for the entire period of their professional activity.
- New fines have been added, mainly with respect to the above-mentioned professionals, for failure to fulfil their professional obligations and for acting beyond their professional competencies.
- The concept of sustainable utilisation of natural resources in regard to construction quality will become effective on 31 August 2016, and must be observed for all construction works.
The new, lower construction tax to be paid to the ISC should encourage investment and is expected to support the growth of the construction market in Romania. Also, the new law should increase awareness and responsibility of the specialists involved in the design and execution of construction works because the amendments increase the extent to which such specialists could be held responsible for their professional activity.
The new law was enacted as Law no. 177/2015 and it amends Law no. 10/1995.