Although Law No. 50/1991 on the authorisation of construction works (“Construction Law”) and Law No. 350/2001 on Territorial and Urban Planning (“Urban Planning Law”) recently underwent significant amendments in November 2016 due to the enactment of Law No. 197/2016, they have once more been substantially amended by Government Emergency Ordinance No. 100/2016 (“GEO 100”), which was published and entered into force on 27 December 2016.
Please allow us to briefly point out the most important amendments introduced by GEO 100 in the Romanian Construction Law and Romanian Urban Planning Law:
- Initiating an urban zone plan (Plan Urbanistic Zonal or “PUZ”) for an investment project located within the city limits of a specific locality (either on an individual plot of land or on several plots) will be allowed only if the area to be regulated by the PUZ is “defined/bordered by at least three public roads or by limits imposed by natural elements stable in time”. Consequently, should the land affected by the investment project not be delimited in the manner described above, a PUZ for that particular project taken separately cannot be initiated (i.e. drafted and enacted); instead, the neighbouring land plots have to be included in the PUZ-regulated area for the delimitation requirement to be fulfilled. This procedure will also require the consent of the owners of the additional plots of land included in the PUZ-regulated area. Therefore, in view of the new regulation, drafting and enacting such urban planning documentation might prove to be more difficult in the future;
- Introducing real estate from the outside the city limits area (extravilan) into the area within the city limits (intravilan) by drafting and enacting a PUZ is allowed only if the relevant land area cumulatively meets the following conditions: (i) the land has a minimum area of 5,000m2 and (ii) is adjacent to an area already situated within the city limits area of that locality. As an exception, the creation of isolated intramural areas is allowed only if the access and utility infrastructure required for the investment project already exists or if the PUZ provides that the required infrastructure must be built at the same time as the investment project;
- Obtaining a new town planning certificate once a PUZ has been approved is a mandatory requirement for issuing the future building permit. In the case of a detailed urban plan (“PUD”), the same town planning certificate used for initiating the PUD can also be used for requesting the building permit;
- The “opportunity endorsement” necessary for drafting and enacting a PUZ has been renamed as “initiation endorsement”, although the general regulatory framework of this deed remains largely unchanged;
- The urban planning documentation will now have to be published on the websites of the mayor’s offices and the local/county councils and in the National Territorial Observer, with anyone being allowed to request copies of these. Furthermore, public authorities have the various obligations to provide information and to send documents (urban planning documentation, building permits, town planning certificates, acceptance reports upon completion of construction works, etc.) to each other. Moreover, GEO 100 provides for the creation of a national construction registry which is to document all the construction projects for which the start of construction works is communicated to the Construction Supervision Authority (ISC);
- In order to increase the transparency of the decision-making process and fight corruption, when voting on urban planning documents the local/county councillors will have to document their option (“for”, “against”, “abstention”) as well as the reasons for it in writing; these documents will also have to be attached to the minutes of the meeting during which the urban planning documentation was voted on;
- The procedure of tacit approval in the case of endorsements necessary for issuing of building permits has been eliminated. At the same time, GEO 100 provides the possibility to create a “one-stop-shop” committee to which only one copy of the documentation necessary for obtaining the building permit is to be submitted. All notices, approvals and endorsements requested by the town planning certificate (except for the environmental permit) will then be issued based on this single set of documentation;
- By abrogating the provision by which a permit from the Environmental Protection Authority was not necessary when obtaining a demolition permit, from now on such prior approval will once again be necessary for demolition permits as well;
- Both the Construction Law and the Urban Planning Law contain new regulations increasing liability in the event of failure to observe their provisions, especially an increased number of regulatory offences and higher fines where regulatory offences are committed. The statute of limitation applicable to these sanctions has been extended from three years to five years from the date when the offence is committed, and the ascertaining of irregularities by the Construction Supervision Authority will lead to the mandatory suspension of the construction works (suspension being an optional measure up to now). Furthermore, it is now expressly stipulated that the Construction Supervision Authority can request the cancellation of building permits in court;
- The validity period for building permits (i.e. the deadline by which the beneficiary has to start the construction works) can be fixed up to 24 months. Furthermore, it has been clarified that the validity period for urban planning documents is extended until the investment project has been completed, provided that the town planning certificate for the building permit is obtained within the validity period of the relevant urban planning documents. The urban planning documents for which no validity period was expressly stipulated will be valid until approval of new urban planning documentation, replacing or amending the previous documentation as appropriate;
- Public authorities are obliged to take measures to facilitate the electronic receipt of the documents involved in the permission procedure within the next three years;
- The standards for implementing the Construction Law and the Urban Planning Law are to be updated in the near future; thus, further amendments to the legal regulations in the fields of construction and urban planning are expected to follow.
To sum up, the Construction Law and Urban Planning Law have been significantly amended. General trends towards making the planning permission procedure for construction work stricter in Romania are visible, as well as a greater concern of the legislator to adopt measures to eliminate bureaucracy, increase transparency and step up the fight against corruption.
We would like to stress that the individual amendments indicated above are presented merely as examples. A thorough study of the newly introduced legal amendments is highly recommended in order to determine what impact these amendments will have on each specific real estate development project. Although the amendments introduced by GEO 100 do clarify certain aspects which have proved to be unclear in the past, they are neither entirely clear, nor complete. Therefore, specialised technical and legal advice may prove necessary in the current legal context in order for an investment project to be smoothly implemented.