New Provisions On The Sale Of Farmland Located Outside Buildable Areas

• Published date: 27 July 2020
• Subject Matter: Corporate/Commercial Law, Real Estate and Construction, Corporate and Company Law, Real Estate, Landlord & Tenant - Leases, Shareholders
• Law Firm: Schoenherr Attorneys at Law
• Author: Ms Simona Chirică, M?d?lina Mitan, Mona Banu and Steliana Garofil

The Romanian legislation on the sale of farmland has been significantly amended. The new provisions were enacted with the declared aim of consolidating the Romanian agricultural real estate market and increasing the use of farmland for agriculture instead of speculative investment. It is expected that the new regulation will mainly lead to restrictions on the access of foreigners to Romanian agricultural real estate, which could raise concerns about its compatibility with EU legislation.

The new provisions were introduced by the draft law ("Draft") for the amendment and completion of Law No. 17/2014 on the regulations regarding the sale and purchase of agricultural land outside buildable areas and for the amendment of Law No. 268/2001 on the privatisation of companies administering the State's publicly and privately owned agricultural land and for the creation of the Agency for the State's Domain ("Law 17"), which was approved by both chambers of the Parliament. On 9 June 2020, the Draft was sent for promulgation to the President of Romania and was subsequently examined by the Constitutional Court, following a notification of unconstitutionality. The exception of unconstitutionality was recently rejected. Now the Draft is to be promulgated by the President of Romania and published in the Official Gazette.

What is changing in terms of the sale of farmland?

The most important changes introduced to Law 17 by the Draft are the following:

1. Increase in the number of pre-emptors and restrictive measures for some pre-emptors
The list of pre-emptors has been completely changed. Where the current form of Law 17 provides only four categories of pre-emptors (co-owners, tenants, neighbours, the Agency for the State's Domain, in this order, at equal price and conditions) the Draft extends the number of pre-emptors, setting forth no less than seven categories: owners of agricultural investments over agricultural land, tenants of neighbouring lands, young farmers research and development units in the field of agriculture, the forestry and food industry, agricultural educational institutions individuals domiciled or residing where the land is located or in neighbouring localities.

The Draft also imposes tighter conditions to be met by certain pre-emptors. Tenants will qualify as pre-emptors only if their lease agreements were registered with the competent town halls at least one year prior to the display of the sale offer. In addition tenants must prove the...