Social Democrats draft bill to cap front payment to real estate developers in Romania

The senior ruling Social Democratic Party (PSD) drafted and submitted to the Parliament a bill that stipulates the limitation of the front payment made by a buyer for the purchase of real estate built by developers to 10% of the property’s price.

The bill also stipulates that the front payment is paid in a special account that can only be used for developing that particular project.

The front payment can rise to 40% of the property’s value if the deposition is subject to an insurance contract.

The bill was drafted in response to the scandal related to real estate developer Nordis, where buyers paid in full but have not received their properties.

However, the real estate developers quoted by Ziarul Financiar argue that overnight enforcement of such a bill would push several real estate developers into bankruptcy.

Such an insurance product does not exist at this moment on the market, and some developers are financing their projects with the money paid by the customers, explains Antoanela Comşa, deputy general manager for Meta Estate and president of the Gran Via developer.

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