Under Article 2345 of Romania's Civil Code, a mortgage stays on the property into whatever hands it passes, including yours.
A mortgage is indivisible. When the developer's plot is divided, it covers every new lot unless the bank releases that lot.
The notary's extract for authentication is valid for 10 working days, and no other entry is made during that time (Law 7/1996, Art. 35).
The developer's mortgage: the short answer
Many developers in Romania finance construction with a bank loan, and the bank takes a mortgage (ipotecă) on the land and on the buildings that will stand on it. This is common and legal. The risk is not the mortgage itself. The risk is that it stays on your villa after you have paid.
Romanian law is clear on two points. A mortgage follows the property "into whatever hands it passes" (Civil Code, Art. 2345), and a real estate mortgage ends only when it is removed (radiated) from the land book (Art. 2428(1)). The developer repaying the loan does not, on its own, clean the register. Someone has to radiate the entry, with the bank's consent in a notarial document (Art. 885(2)).
In plain words: a developer mortgage is acceptable only if there is a written plan, agreed with the bank, that removes it from your villa before or at the moment you pay for it.
Our guide to the land register extract covers the whole document. This article focuses on one entry, and on what to demand in the contract.
Where the mortgage appears: Part III of the extract
Under Article 23 of Law 7/1996 on cadastre and land registration, every land book (carte funciară) has three parts:
| Part | What it contains (Law 7/1996, Art. 23) | What to look for |
|---|---|---|
| Part I (A) | The property: cadastral number, area, use, buildings | That the plot and the villa match what you are buying |
| Part II (B) | Ownership and its basis, plus prohibitions on sale or encumbrance and other restrictions | That the seller is the registered owner. Look here too for bans on sale (interdicție de înstrăinare) |
| Part III (C) | Dismemberments of ownership, security rights and charges: superficies, usufruct, servitudes, mortgages, leases, seizures, enforcement | Every mortgage, seizure or note of proceedings |
Entries in Part III are usually numbered C1, C2 and so on. When there is nothing registered, the extract shows "NU SUNT" (there are none).
A mortgage entry typically tells you:
- The registration number and date (încheiere), which sets the order of rank.
- The document behind it: a notarised mortgage contract, with its number and date.
- The type of entry: intabulare of a mortgage right (drept de ipotecă).
- The amount secured and the currency.
- The creditor: the name of the bank.
Look at the same time at Part II. Under Article 23(B)(h), prohibitions on sale, encumbrance or construction are recorded there. Banks often register such a ban together with the mortgage, so a sale may need the bank's consent even before you reach Part III.
Why one plot is not the same as one villa
A project often starts as one large plot with one land book and one mortgage. Later the developer divides it into lots (dezlipire), one for each villa or pair of villas. The division is done by an authentic notarial act and a cadastral survey (Law 7/1996, Art. 25(2)), and each new lot is transcribed into a new land book (Civil Code, Art. 880).
Here a rule many buyers miss becomes important. A mortgage is indivisible: it covers "all the encumbered assets, each of them and every part of them", even when the property is divided (Civil Code, Art. 2344). In practice, a mortgage on the original plot is carried onto every new lot, unless the bank agrees to release a specific lot.
So the question is not "is there a mortgage on the project?" The question is: "Is there a mortgage on the land book of my villa, and what will remove it?"
A developer mortgage is a financing tool, not a scandal. What matters is the land book of your villa.
For a future home, Law 169/2026 (the Planning and Construction Code) adds a useful step. A preliminary contract for a future individual home can only be signed in notarial form, after the building permit has been noted in the land book and after an extract has been obtained for that future home (Art. 422(7)). The notary then notes the promise in the land book on the same day or the next working day (Art. 422(8)). We cover those rules in our checklist after the Nordis law.
How the mortgage is released: three common routes
| Route | How it works | What to ask for |
|---|---|---|
| Release before the preliminary contract | The developer repays the part of the loan linked to your lot, and the bank consents to radiation | A new extract in which Part III no longer shows the mortgage on your lot |
| Release at the final sale | Part of your price is paid directly to the bank, and the bank's consent to radiation is signed at or before the notary | The bank's written letter naming your lot and the amount it will accept, before you sign |
| No release, the mortgage stays | You buy a property still mortgaged to the developer's bank | Do not agree to this without the advice of an independent lawyer. The mortgage would follow the property into your hands (Art. 2345) |
At the final signing the notary orders an extract for authentication. It is valid for 10 working days, and during that period the registrar makes no other entry except the one it was issued for (Law 7/1996, Art. 35). This protects the moment of signing. It does not protect the months of payments before it.
What to demand in the contract
These clauses are worth discussing with your own lawyer before you sign a preliminary contract:
- A clear statement of the current charges. The contract lists every entry in Parts II and III of your lot's extract, by number.
- An obligation to deliver the property free of charges at the final sale, except those you accepted in writing.
- The bank's consent in writing. A letter from the bank, before you pay large sums, saying it will release your lot and on what condition.
- Payment to the bank where needed. If the release depends on a payment, that part of the price goes directly to the bank's account, against the release document.
- A deadline and a remedy. If the mortgage is not released by the final sale, you can terminate and receive back what you paid, with the penalty agreed in the contract.
- A fresh extract before every significant payment. Something can be registered between your check and your transfer.
Our company lawyer represents the company only. Every buyer should have an independent lawyer who reads the extract and the bank's letter on the buyer's behalf. We explain why in our article on who protects the buyer.
The Cyprus lesson: buyers who paid in full
Cyprus shows what happens when developer mortgages are left on homes that have been sold. According to a July 2024 report in the Cyprus Mail, buyers had paid in full but could not receive title deeds because developers' bank mortgages remained on the buildings. Under a 2015 law meant to help these "trapped buyers", the Department of Lands and Surveys received 21,495 applications and transferred titles in 11,158 cases. In June 2024, the appeals court found that law unconstitutional in a case brought by a bank, because the mortgage is the bank's property right.
In late June 2025 the Cypriot parliament amended the rules: now a court can replace a lender's consent if the lender refuses it unfairly. A borrowers' association quoted by the Cyprus Mail put the number of affected buyers at 9,497, of whom 5,417 were still waiting.
The Romanian system is different: ownership passes when the sale is registered in the land book (Civil Code, Art. 1676 and 885). The lesson is the same in both countries, though. The mortgage has to be dealt with before your money is gone, not after.
Your check, step by step
- Ask the developer for the land book number of your lot or future villa.
- Order an extract for information online from ANCPI's ePay service (20 lei for a property you do not own).
- Read Part II for bans on sale, and Part III for mortgages, seizures and notes of proceedings.
- If there is a mortgage, ask for the bank's name, the loan agreement number and the bank's release letter for your lot.
- Have your own lawyer write the release mechanism into the contract.
- Order a new extract before each significant payment and before the final signing.
As an example of the other case: Compass on the Lake in Balotești is financed by its developers' own money, with no bank loan, so there is no developer mortgage to release. Even so, every buyer should read Part III of their own villa's extract.
Frequently asked questions
Is a developer mortgage on the land a red flag?
Not on its own. Bank-financed construction is normal. It becomes a red flag when there is no written plan for releasing your lot, or when the developer will not show you the bank's letter.
Does the mortgage disappear when the developer repays the loan?
Not automatically. Under Article 2428 of the Civil Code, a real estate mortgage ends by radiation from the land book. Radiation requires the bank's consent in a notarial document (Art. 885(2)). Until then, the entry remains.
If the plot is divided, does the mortgage stay on my lot?
As a rule, yes. A mortgage is indivisible and covers every part of the encumbered property (Art. 2344). A specific lot is freed only if the bank agrees to release it.
What protects me on the day of the final signing?
The notary's extract for authentication, valid for 10 working days. During that time the registrar makes no other entry in the land book except the one for your sale (Law 7/1996, Art. 35).
The bottom line
A developer mortgage is a financing tool, not a scandal. What matters is the land book of your villa, and a written plan that clears Part III before your money is gone.
If you have an extract with a mortgage in Part III and want to understand it, with us or with any other developer, book a half-hour call with me. We will go through it together, entry by entry.
Moti Azulay, Compass Group Romania
Sources: Law 7/1996 on cadastre and land registration, consolidated (legislatie.just.ro), Art. 23, 25, 26 and 35 · Civil Code, Law 287/2009 (legislatie.just.ro), Art. 880, 885, 1676, 2344, 2345 and 2428 · Law 169/2026, Planning and Construction Code, Monitorul Oficial no. 661 of 10.08.2026, Art. 422 · ANCPI ePay · Cyprus Mail, "Trapped buyers may never get proper titles", 17.07.2024 · Cyprus Mail, "New law clears path to title deeds for trapped buyers", 15.07.2025
This article is for general information only and is not legal, tax or financial advice. The rules are correct as of 22 October 2026. Reading a land book extract for a specific deal should be done by an independent lawyer.
Now you know more.
This article is general information, not legal, tax or financial advice. Consult local professionals before any transaction.
