Real estate transactions in Romania are rarely lost at the negotiation stage.
They are lost — or become problematic — after signing, when issues that should have been identified in due diligence surface too late.
In this context, due diligence is not a formality.
It is the decision-making phase of the transaction.
What due diligence actually means
In practice, due diligence is often misunderstood as a checklist exercise.
It is not.
It is a legal risk assessment process, designed to answer a simple question: Can this property be used, transferred and exploited as intended, without legal exposure?
The core layers of due diligence
A proper due diligence process typically operates across several layers.
Title and ownership
The first step is confirming that the seller has a valid and transferable ownership right, based on:
land book extracts;
ownership history;
authority to sell.
This is not a formality. Title issues remain one of the most common sources of disputes.
Encumbrances and litigation
The property must be verified for:
mortgages;
seizures or precautionary measures;
easements;
pending litigation.
Any of these can materially affect both usability and value.
Urban planning and intended use
One of the most underestimated risks is zoning incompatibility.
Due diligence must confirm:
urban planning status (PUZ / PUG);
permitted uses;
development restrictions.
A mismatch between intended use and zoning can make the transaction economically irrelevant.
Construction legality
For developed assets, it is essential to verify:
building permits;
compliance with authorisations;
final acceptance of works.
Non-compliant constructions may expose the buyer to fines or even demolition risk.
Transaction structure and contractual framework
Due diligence also extends to:
pre-sale agreements;
contractual obligations;
payment structures.
This is particularly relevant in residential developments, where contractual imbalance is frequent.
What has changed recently (and why it matters)
Recent legislative developments in Romania — particularly regarding residential developments — have introduced stricter rules on:
pre-sale agreements;
advance payments;
cadastral structuring of future units.
These changes are aimed at increasing transparency and reducing abuse, but they also make due diligence more technical and more relevant.
Where most transactions go wrong
In practice, the issues are rarely exotic.
They are usually:
incomplete verification of ownership;
ignoring urban planning constraints;
relying on developer representations;
treating due diligence as a timing exercise, not a decision tool.
Conclusion
Due diligence is not about identifying every theoretical risk.
It is about identifying the risks that matter for the transaction.
A properly conducted due diligence process does not delay a deal.
It defines whether the deal should happen at all.