Romania’s real estate market continues to draw investor interest, but legal uncertainty remains a defining feature, especially in Bucharest. In this CIJ EUROPE Q&A, Ioana Grigoriu, Co-Head of Real Estate and Counsel at KPMG Legal, discusses the persistence of permitting risk, the legal fallout from zoning litigation, the implications of the Nordis law, the evolution of refinancing pressures, and the readiness of Romania’s framework for newer asset classes.
CIJ EUROPE: Over the past few years, permitting delays and the suspension or cancellation of zoning plans have created uncertainty for developers in Bucharest. From your perspective, has the legal environment around planning approvals improved recently, or does regulatory unpredictability remain one of the main risks for real estate investment in Romania?
Ioana Grigoriu: Over the past few years, Romania has indeed faced planning and permitting concerns as a standalone risk class. Things have not fundamentally changed. We still see pressure in this respect, first because of the cancellation of the sectoral PUZs. Out of the six district PUZs, only one is still standing. Bucharest still functions based on a general urban plan dating from 2000. It was extended until 2026, but it remains an outdated plan.
Because of that, the issue of building permits has become more severe. I read recently that the number of building permits decreased by 45 percent between 2021 and 2024, which is a very significant drop and a direct consequence of this situation. So, the risk is clearly still on the table. There is however a high degree of unpredictability, although less than during the peak years of suspensions and cancellations. I believe it is better understood now by investors and authorities alike, and better managed, because investors have started to factor and price this risk into their business plans and project timelines, so delays are less of a “black swan” and more of a modelled risk.
That said, in Romania this has been a major risk and, until Bucharest has a new PUG, probably not before 2027, I do not think the changes will be significant. We need a real reform, and a coherent one, that properly correlates the relevant documentation. Otherwise, permitting risk will remain a continuous issue.
CIJ EUROPE: Should the market be doing more collectively, whether through direct dialogue with government or broader lobbying, to push for change?
Ioana Grigoriu: The first step came, in a way, in 2025 when the government issued GEO 31/2025 which represents a genuine step forward aiming to reduce delays by introducing deadlines for issuance of certain endorsements and a form of tacit approval mechanism. So there has been an attempt to speed things up procedurally. However, in my view this is not enough unless the fundamentals of the urbanism sector are in place. You cannot properly issue a building permit unless the urbanism documentation is there, and that starts with the PUG.
As to what can be done, I believe efforts need to be combined. We need a reality check, both from the legal side and from the investors’ side. Even where there may be a legal basis to move forward, if the supporting documentation is not approved by the city hall, concerns remain. So yes, the efforts need to be consolidated.
CIJ EUROPE: Several court decisions related to the annulment of zonal urban plans have raised concern about the stability of development rights. How significant has this issue been for investors and lenders, and do you believe the legal framework now provides sufficient certainty for long-term projects?
Ioana Grigoriu: This has been a very significant issue. Starting from around 2015, we had a series of court cases and a key ruling from the High Court which effectively said that if the PUZ governing a project was cancelled, the building permits issued under it could also fall automatically. That created a major disruption for investors and lenders in a legal environment that was already poorly correlated. The basic market assumption had been that once you obtained your building permit, the legal life of the project was supposed to be secured. After those court decisions, that assumption could no longer be upheld.
A pivotal change came in April 2025 by way with Constitutional Court decision no. 208/2025, which in my view was a very good one which held that building permits cannot be automatically invalidated by the subsequent annulment of their underlying Zonal Urban Plan — therefore, the so called domino effect which affected most of the projects’ outcome has now been settled by the courts, who must now balance legality against legal certainty on a case-by-case basis..
That decision has helped restore a degree of stability. Combined with a proper legal framework, meaning a new Urbanism Code and a new PUG, it could create a much better level of certainty for investors. Long-standing market participants understand this as a country risk, but for new investors entering Romania, it remains difficult to explain why the legislation is still so unclear.
CIJ EUROPE: In the context of the recently introduced Nordis law and the legislator’s stated objective of enhancing protection for off-plan buyers, how do you assess the balance between regulatory intent and practical implementation? From your experience advising developers and investors, where are the main legal or transactional challenges emerging, and does the current framework risk affecting projects, financing or delivery timelines?
Ioana Grigoriu: The context matters. Romania had no dedicated framework for off-plan transactions until recently and the law itself is a good idea, but unfortunately the implementation falls short. It was introduced in response to a crisis case in which buyers paid the full purchase price under promissory agreements without receiving ownership as in most cases, the same units were effectively promised to multiple buyers. Where construction was unfinished, those buyers often had very limited legal protection.
The law correctly addresses the most egregious of the standing concerns: the pre-division (in Romanian “pre-apartamentare”) mechanism, which creates individual cadastral records for future units before construction, is genuinely innovative and represents a step forward, but it is still not enough. The two crucial issues remain related to how much of the advance a developer can collect and how that advance can be secured.
The initial version of the law capped the amount developers could collect from buyers, which was actually the mechanism that is already being implemented for a long time in other civil law jurisdictions such as Italy, France, Belgium. But the final form of the law, as approved in the Deputy Chamber, no longer imposes a true cap on advances. In theory, buyers can still pay 100 percent of the price. The law only limits how those funds may be used, hence we are witnessing a control over fund spending, but which is rather weak in definitions and correlations. It does not clearly define what a project is, what infrastructure means, what utilities mean, or how these categories should be tied to construction documentation. That creates a large grey area and operational misfunctions with all of the other players of the development of a project (contractors and suppliers).
The sanction for misusing funds is also problematic. The law provides for a penalty of 1 percent of the previous year’s turnover, but many developers operate through SPVs with little or no prior turnover, which means the sanction can be effectively meaningless. There is also still uncertainty around the recording and enforcement of legal mortgages for promissory buyers.
So yes, this creates pressure on implementation and on financing. Developers without pre-financing or equity in place face greater strain, and that is likely to push up apartment prices. There is demand for new apartments, but the risk is increasingly shifting to the end buyer, while developers are becoming more cautious about launching and selling projects. Until implementation rules are issued, many will continue to take the safest interpretation of the law.
CIJ EUROPE: Across Europe, many assets financed during the low-interest rate period are approaching financing deadlines. Are you beginning to see more structuring discussions or distressed scenarios in the Romanian market, and how are legal strategies evolving to address the new environment?
Ioana Grigoriu: This refinancing and restructuring wave has hit the more leveraged Western European markets harder than Romania so far, but the pressure is clearly building. We have seen more discussions around pre-financing, refinancing and restructuring, which is a signal that this trend is coming into the Romanian market as well.
There is not a lack of financing available, but the downside is that new debt is far more expensive than it used to be. That creates an equity gap and puts pressure on developers and investors. They need to be more creative, whether through prepayment schemes, extended deadlines, new equity stakeholders or mezzanine financing, to avoid falling into the worst-case scenario.
Romania does not have the same volume of heavily leveraged portfolios as some Western markets, which is why the distress here is more asset-specific than systemic. It tends to affect projects with weak fundamentals, such as secondary locations, outdated assets, higher vacancy or significant cost overruns. For projects with strong income and solid fundamentals, financing remains available.
There is also a real opportunity for foreign investors, particularly in mezzanine financing, but it depends heavily on the product and the investor’s familiarity with it. Institutional investors tend to favour sectors and structures they know well.
CIJ EUROPE: Investors are increasingly exploring sectors such as student housing, co-living, data centers and logistics. From a legal standpoint, does Romania’s regulatory framework adequately accommodate these newer asset classes, or will legislative adjustments be needed to support their growth?
Ioana Grigoriu: Romania’s legal framework is flexible enough to accommodate these sectors to some extent, but it was not designed with them in mind. What we are doing in practice is applying existing rules, permits and strategies to products that are not clearly regulated as distinct asset classes.
Logistics is probably the most comfortable of these sectors from a legislative standpoint, because it is generally treated as industrial and the legal route is relatively clear. For student housing, however, projects may be treated as residential or mixed-use and therefore carry the burden of residential permitting rules. For co-living there is a real regulatory vacuum. It shares some features with rental services and some with hotel accommodation, but there is no clear distinction in the law about what rules apply and when.
Data centers probably carry the heaviest burden of all. They are not clearly placed within any one category and there are no tailored rules accommodating their specific needs around energy, cooling, height, occupancy, IT, fire safety and data protection. This means developers and authorities often must improvise, and that creates delays and uncertainty in the permitting process.
Some of these issues may improve under the draft PUG or the new Urbanism Code. But reducing procedural delays is not the same as creating clear legal rules for each product type. Emerging sectors such as data centers need targeted regulation and clearer incentives.
CIJ EUROPE: Looking ahead 12 months, how do you see the Romanian real estate market evolving?
Ioana Grigoriu: Despite the overall economic and political context, I remain optimistic, so I think the next 12 months will keep a positive outcome, even if in a cautious way. Projects are still moving. We continue to speak with major companies and large players that want to do business in Romania. Retail remains a strong sector and continues to attract capital. Industrial and logistics are also functioning relatively well from a permitting perspective because the rules are more standardized.
So, I do not see a full stop in the market. There are still active sectors, clients remain interested, products are coming to market, and there are also a few large transactions that may be completed next year. Romania remains attractive.
Romania’s market continues to offer opportunity, but Grigoriu’s assessment underlines that legal clarity remains central to execution. Across planning, buyer protection, financing and emerging asset classes, the core issue is no longer simply identifying the gaps, but whether regulation and implementation can finally move in step. That, more than anything else, will determine how much of the market’s potential can be converted into long-term investment confidence.
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