(P) Tax Flash: Sale and purchase of agricultural land located outside city limits

Law no. 17/2014 on certain regulatory measures regarding the sale and purchase of agricultural land located outside city limits (the “Law”) was published in Official Gazette no. 178 of 12th of March 2014. It will enter into force in 30 days from its publication in the Official Gazette while the methodological norms should be published within 7 days from the entering into force. Scope of application The Law applies to the following persons who want to sell or buy agricultural land located outside city limits in Romania: • Romanian citizens and legal entities; • Citizens and legal entities from European Union member states, Norway, Liechtenstein, Iceland or Switzerland, as well as stateless persons domiciled in these states. Preemption right When selling agricultural land located outside city limits, the preemption right of the co-owners, land tenants, neighboring owners and of the Romanian state (through the Agency of State Domain), in that order, at the same price and in the same conditions must be observed. Moreover, the sale must observe the usual conditions regarding the substance and the formalities for valid conclusion of contracts (e.g. the notarized form). The sale procedure, with observance of the preemption right The seller has the obligation to register a request accompanied by a sale offer with the mayor’s office corresponding to the location of land in question, by which he requests the publication of the sale offer in order for the preemptors to be informed regarding this offer. Within a working day, the mayor’s office has the obligation to post the sale offer at its headquarters and, as the case may be, on its internet page. The offer must be kept posted for 30 days. The mayor’s office also has the obligation, within 3 working days of the date of the registration of the request, to submit a file containing the list of preemptors, copies of the documents and the request to post the sale offer to the central, or the territorial structure of the Ministry of Agriculture. The central structure or, respectively, the territorial structures of the Ministry of Agriculture have the obligation to post on their websites the sale offer for 15 days. The holder of the preemption right must manifest in writing its intention to buy within the 30 days term, communicate the acceptance of the seller’s offer and register it with the mayor’s office where the offer was posted. The mayor’s office will post, within 24 hours of the registration of the acceptance of the sale offer, the data provided in the methodological norms for the application of the Law and will send them to the central structure, respectively the territorial structure of the Ministry of Agriculture to be posted on its website. Cases of accepting preemptors a) Different ranking preemptors (e.g. land tenant and neighboring owner) manifest their intention to buy in writing, at the same price and in the same conditions. In this case, the seller will communicate the name of the preemptor to the mayor’s office (while respecting the order of preemption rights). b) More than one preemptor of the same rank (e.g. land tenants) manifest their intention to buy in writing at the same price and in the same conditions (e.g. co-owner) and no other preemptor of superior ranking accepted the offer. In this case the seller will choose between them and will communicate to the mayor’s office the chosen preemptor’s name. c) An inferior ranking preemptor (e.g. neighboring owner) offers a higher price to the one in the sale offer or to the one offered by the other superior ranking preemptors that accept the offer (e.g. co-owners).