The New Nordis Law Transforms the Real Estate Market: Safer for Buyers, More Selective and More Costly for Developers
The law introducing major changes regarding the responsibility of real estate developers and the protection of buyers, known as the “Nordis Law”, recently adopted unanimously by the Chamber of Deputies and sent for promulgation, is transforming the real estate market: buyers benefit from unprecedented protection, real guarantees, and mechanisms that reduce the risk of losing advance payments. Developers, however, will need to recalibrate their projects, manage capital more strictly, and bear higher administrative costs, which will slow down project launches and increase housing prices — amplified by the recent VAT increases, according to specialists from TPA Romania, a leading company in Central and Eastern Europe specialized in audit, accounting, tax advisory, and legal consulting.
“The new law offers the strongest protection buyers have ever had. From their perspective, it is a step forward: more clarity, real guarantees, and mechanisms that reduce the risk of losing advances. For developers, however, a period of restructuring is coming, where capitalization becomes essential, projects will be harder to launch, cash flow will no longer be supported exclusively by advance payments, and administrative costs will increase significantly. The market will professionalize, but also filter itself. Additionally, the increased documentation volume, stricter controls, new rules on the use of funds, and the capital locked for longer within projects will increase construction costs. All these changes may, in the medium term, lead to higher housing prices. To this we add the recent VAT increase for residential units, which places additional pressure on the final price paid by buyers,” explains Alexandra Cohuțiu, attorney at TPA Romania.
Thus, the new law brings the real estate market to the edge of one of the most extensive legislative reforms of recent years: it seeks to remedy well-known vulnerabilities — overlapping promises for the same unit, advances not correlated with construction progress, non-transparent use of funds, and the lack of real guarantees for buyers during the project stage.
Clarification and Consolidation of Developers’ Obligations
The law expressly defines the term “developer” — investors who develop real estate projects consisting of individual dwellings or condominiums for the purpose of transfer of ownership — and consolidates the developer’s responsibilities into a coherent framework covering the entire lifecycle of the project: from obtaining permits and the building authorization and ensuring design and execution quality, to verifying works through certified specialists, supervising construction through site supervisors, remedying non-conformities, conducting receptions, and preparing the technical building documentation.
“This is undoubtedly a structured set of obligations aimed at increasing buyer safety, strengthening their protection, and raising quality standards in construction. However, for many small developers — those working with small teams and limited cash flow — these requirements will represent a real burden. Full implementation of all obligations will generate additional costs, longer timelines, and a greater need for available capital,” says Alexandra Cohuțiu.
Notarial Form Requirements and Mandatory Pre-Apartmentation
One of the most important changes is the introduction of a strict mechanism for sale promises concluded before completion: they can be signed only in notarial form, only after pre-apartmentation has been completed and after the opening of land books for all future units, and only based on a land-book extract corresponding to the future unit.
Pre-apartmentation involves specific cadastral documentation and the prior opening of the land book for the condominium as well as for all future units, with the express mention that these are future assets.
“This system reduces the risk of multiple promises for the same property and offers real legal protection to the buyer. For developers, however, it means that the sale can no longer start in very early stages. Without pre-apartmentation (which will likely be costly and relatively complex), no advance payment can be collected, making it significantly more difficult to finance projects through advances. Pre-apartmentation and the updating of land books are coherent but challenging mechanisms,” explains the TPA attorney.
Regulation of Reservation Agreements
The law explicitly regulates reservation agreements: they may be concluded for a maximum of 60 days, must be followed by either a notarized promise or a sale contract, and allow an advance payment deductible from the final price of no more than 5%, under penalty of absolute nullity. The developer is also required to return the sum in full within 30 days if the promise or sale contract is not signed within the agreed period, when the delay is exclusively the developer’s fault.
Capped Advances and Dedicated Bank Accounts: Financial Flexibility Disappears
The law introduces a staggered cap on advances according to actual construction progress (maximum 25% of the price for the structural phase and, after its completion, maximum 20% for the installation phase) and requires that advances be deposited into a dedicated bank account, usable exclusively for that project and only with the “payment approved” stamp of the responsible engineer/site supervisor. Misuse of these funds is prohibited and sanctioned with a fine of 1% of the previous year’s turnover (if the act does not constitute a criminal offence).
“This is for sure a concrete mechanism protecting buyers, but also a significant restriction for developers, who will no longer be able to use collected funds for other phases or other projects. Financial flows will need to be far more transparent and carefully planned,” says Alexandra Cohuțiu.
