Important Amendments in the Construction Sector
SIMPLIFIED FORMALITIES TO SOFTEN THE BUREAUCRATIC PATH OF INVESTORS
Daniel Vlasceanu – Partner, Vlasceanu & Partners
Mihaela Farin – Senior Associate Vlasceanu & Partners
The construction sector’s legal framework has been repeatedly amended in the last couple of years with the obvious intention to simplify formalities and ease up the bumpy bureaucratic path of investors. Looking holistically at the energy sector, one could actually say that this is one of the very few legal streams (if not the only one) where the numerous legal amendments caused positive results for investors.
The last amendments are introduced under the Law no 7/2020 for amending Law no 10/1995 regarding the quality of constructions and the Law no 50/1991 regarding the authorization of the construction works (the ‘Law no 7/2020’). Said amendments were published in the Romanian Official Gazette on 8 January 2020 and become effective at different moments in time (as below detailed).
At a general level, the amendments relate primarily to:
- the introduction of new obligations on the building owners to connect the building to the public utilities;
- clearer obligations on the authorities to organize (at local level) the commission for obtaining the single agreement (i.e. such commission is to obtain, upon request, all endorsements required for the building permit);
- extremely useful additions regarding land book registration of constructions erected without a building permit;
- the amendment of the value(s) of the fines.
Main amendments to the Law no 10/1995 regarding quality in constructions (‘Law no 10/1995’)
The amendments mainly relate to the obligation to complete connection to the power network and to public utilities. It is obvious that the lawmaker intended to avoid situations where reception is given for buildings unconnected to such public utilities. Additional requirements are imposed (primarily under Article 22 of Law no 10/1995):
- in case of the residential housing developments, of public utility constructions and of the access roads, the reception upon completion of the works must be granted only upon completion of the works for connection to public utilities;
- the use of the construction is allowed only after the reception of the construction works is granted and after having put into operation the connections to the public utilities;
Note: The above-mentioned amendments will enter into force upon 7 February 2020
Main amendments to the Law no 50/1991 regarding the authorization of the construction works
Law no 50/1991 was last amended two months ago. However, the last previous amendment did not address two essential aspects (regulated now under Law no 7/2020) posing significant problems in practice:
- remediation means of the legal status of buildings erected without a construction permit; and
- clarification that prosumers do not need a building permit for their solar panels. Let us detail each of these aspects.
The amendments entered into force on 11 January 2020. They refer also to other elements, but for the purpose of the present material we will focus only on the above mentioned two aspects.
Buildings without corresponding permits
In practice, there are numerous cases of buildings (both residential, but also – to a less extend though – industrial) partially erected (usually supplemented) without a building permit. In such cases, as long as the owner that performed the unpermitted works uses the respective construction, the de facto situation carries on in a tacit manner. But when said owner intends to transfer either the ownership right or only the use on the respective building, the legal status comes to surface and creates problems.
The amendments introduced by Law no 7/2020 provide for the first time a viable solution for registering such constructions with the land book. Let us examine the conditions that must be met:
- the expiry of the 3-year statute of limitation period (stipulated under Art 31 of Law no 50/1991); in such circumstances, the application of a sanction is not possible anymore;
- a cadastral documentation and a technical expertise must be carried out. The technical expertise must certify compliance with the rules regarding the quality in constructions as well as compliance with the planning regulations.
Therefore, if the above are fulfilled, based on cadastral documentation and the technical expertise, an ascertaining certificate (Romanian: certificat de atestare) is obtained. With said ascertaining certificate, the owner can apply for land book registration.
Solar panels installed by prosumers or for domestic use
Prosumer’s definition was regulated for the first time under the Romanian legal framework mid 2018 (more specifically, since Law no 220/2008 regarding the system for promoting renewable energy was amended by Law no 184/2018). In simple terms, the prosumer is defined as the final client that generates energy from renewable sources, but without the energy production being his commercial/professional object of activity. Following the last amendment of Law no 50/1991, it is now clearly stipulated under art 11 para 7 letter f ) that no building permit is required neither for installing photovoltaic systems by prosumers nor for installing solar panels for water heating for domestic consumption. It is also stipulated that such installations may be completed only on the basis of prior notice submitted to the local administrative authorities (however, without being mentioned what the content of such notice should be).
Usually, there is reluctance to purchase a building that is not (entirely) registered with the land book. Sophisticated tenants are not eager to lease a building where their usage right cannot be protected by registration with the land book. As such, the amendment brought by Law no 7/2020 should reduce the number of unclear land book situations and facilitate economic transactions with buildings erected/ supplemented without a building permit but observing all applicable regulations.
At the same time, we welcome the clarification brought with respect to the prosumer’s possibility to install solar panels without a building permit – this is a reasonable solution that saves time, costs and energy for the persons intending to produce renewable energy. This is nowadays particularly important within the context of the Green House Programme (re)opened in September 2019 by the Environment Fund Administration aiming to provide non-refundable financial support (up to RON 20.000) for prosumers installing solar panels on their homes.
Following the last amendment of Law no 50/1991, it is now clearly stipulated under art 11 para 7 letter f) that no building permit is required neither for installing photovoltaic systems by prosumers nor for installing solar panels for water heating for domestic consumption.