According to the EU accession treaty, as of 1 January 2014, EU citizens are entitled to buy agricultural land in Romania. The Romanian Parliament is expected to enact a new law that aims to set out a more restrictive and regulated framework than currently in force, with respect to the acquisition of extra muros (outside the city borders) agricultural land (the “Draft Law”).
Ranking of Pre-emption Rights
The Draft Law would give pre-emption rights at equal price and conditions to the following categories ranked in the order described below:
- co-owners (individuals only, not companies) of the land that is being sold;
- tenant farmers who have been working on the agricultural land that is being sold for more than a year before the date the relevant piece of land went for sale;
- neighbours (individuals only, not companies) of the land for sale;
- farmers aged less than 40 who perform agricultural activities in the same city/commune where the land for sale is located; and
- the Romanian State.
The Draft Law also provides for the setting up of a new governmental body, namely the Authority for Management and Regulation of Agricultural Land Market (the “Authority”), to oversee the procedures regarding the pre-emption rights and endorse the sales of extra muros agricultural land.
The new pre-emption procedure
The new pre-emption rights involve a procedure conducted by the seller with the relevant City Hall where the land is located and also the Authority.
In current format, the Draft Law does not contain sufficient details about the pre-emption procedure but indicates as follows:
- According to the Draft Law, the seller’s offer to sell must be made publicly at the City Hall and on the Authority’s website.
- The seller’s offer will remain in force for 30 days from its publication at the City Hall, during which all beneficiaries of the pre-emption right must submit their acceptance of the offer to the seller and the Authority.
- Upon expiry of the 30 days term, the seller chooses the buyer in accordance with the pre-emption ranking mentioned above and communicates its choice to the City Hall.
- In turn, the City Hall informs the Authority about the seller’s choice of buyer.
- Ultimately, it is the Authority’s responsibility to check whether the buyers fulfill the conditions under the Draft Law, and whether it (the Authority) should endorse the sale.
We expect that, shortly after the enactment of the Draft Law by the Parliament, the Government will issue guidelines for the application of the new law.
The Draft Law is in the public debate stage until the end of 2013. It is expected that no major amendments will be made to this draft since the law should be in force starting 1st January 2014, at the latest.