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The Revendication Claims Issues Faced by Companies Investing and Expanding in Romania

June 2008 - Real Estate & Property. Legal Developments by STOICA & Asociatii Attorneys at Law.

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The years following the collapse of the communist regime in Romania and the last period of time coinciding with Romania joining the European Union expressed a rapid increase trend of the real estate market, along with the economical development of the country.

One of the main issues faced by the real estate developers concerns the real estate titles and the risk that the real estate are claimed by the former landlords, abusively dispossessed during the communist regime.

The concrete factual context, highlighting this issue is represented by a company willing to invest in a certain industrial, agricultural or economical area, purchasing real estates in good faith, and facing revendication claims concerning the real estate acquisitions afterwards. 

Therefore, among other legal or birocratical problems, yet to be solved, hindering the natural investments flow, coming from Romanian or foreign companies, the revendication claims issue is one of the most common ones and, nevertheless, one of the most delicate obstacles, considering that the revendication claim is not submitted to the status of limitation, it can be filed anytime, circumstance that endangers the security of the civil circuit. 

In the verge of the desired fast transition from communism to democracy, from an in-region economy to the open-market economy, based on free competition, the Romanian legal system indulged every citizen that once was the owner of a real estate, illegally or immorally taken away by the communist regime, to claim his right in justice.

Currently, the Romanian legislative decided to give birth to a special law, dedicated to regulating the legal regime of the real estates abusively taken over by the state during the communist period, Law no. 10/2001, being the legal frame for the persons claiming to have been unrightfully dispossessed by their real estates within the prior mentioned period.

Law no.10/2001 provides a special procedure that is to be followed by the former landlords within a certain term, in order to benefit of reparatory measures. This law supplies the real estate developers with an advantage, enhancing their possibility to find out if the real estate they are interested in is or is not claimed by the former landlord, and, consequently, if any notification has been filed. Moreover, if the former landlord has not filed a notification grounded on Law no.10/2001, within the term provided by the law, which expired on the 14th of August 2002, he is decayed from the right of filing any notification in this matter.   

Unfortunately, the courts of law do not share a unique perspective, regarding the possibility of filing a revendication claim subsequent to the enforcement of law no.10/2001. Undoubtedly, the common law for the revendication claims, in general, is art. 480 of the Civil Code, but, a basic principle within the entire continental legal system states: specialia generalibus derogant.

Law no.10/2001 constitutes a special provision in relation with article 480 of the Civil Code, the aim of this law beings precisely to regulate the entire procedure to be followed by the person that claims the ownership of a real estate, presumably taken over by the communist regime, with the help of an abusive procedure and to establish the reparatory measures corresponding to these real estates.

In spite of the enforcement of the special law, the Romanian courts continue to deliver a controversial and contradictory jurisprudence in this matter, a large number of judges still considering that the special procedure provided in law no. 10/2001 does not exclude the common law revendication claim possibility, whereas other courts of law firmly rule in favor of restricting the applicability of art. 480 to any revendication claim, except the ones based on the claim of abusive dispossession of real estate owners by the communist regime.

Even the High Court of Cassation and Justice has a contradictory jurisprudence - some courts have ruled in favor of the special procedure imposed by law no. 10/2001, as constituting the only procedural option for the person that claims the ownership of a real estate, presumably taken over by the communist regime, with the help of an abusive procedure, whereas some other courts considered that filing a revendication claim based on art. 480 is still possible.

The controversial and contradictory jurisprudence regarding this issue determined the Chief Prosecutor of The Prosecution Office near the High Court of Cassation and Justice to file an appeal in the interest of law in this matter, in order to establish a uniform juridprudence.

The appeal in the interest of law regarding the admissibility of the revendication claims legally grounded on art.480 following the enforcement of the Law no. 10/2001 has been filed in September 2007, the High Court of Cassation and Justice reunited in Joint Sections postponing the ruling twice, the next hearing in this file being the 2nd of June 2008.

Anyway, this matter should be given a final resolution, stating that the former landlords should follow the procedure provided within the special law, without having the possibility of filing a common law revendication claim, as the real estate market must enter a stable period, the expected economical development needing both legislative and judicial uniformity.

To conclude, the acknowledging of the former owners rights over the abusive dispossessed real estates should not result into another flow of abusive claims hindering the real estate development in Romania.

CńÉtńÉlina Dicu                                              Mircea Constantin Sinescu

Senior Partner                                            Assistant Lawyer

                       

Litigation Department

STOICA & ASOCIATII ATTORNEYS AT LAW

www.stoica-asociatii.ro