Lawyer’s analysis. The Romanian Constitutional Court has ruled: appeals suspend construction

What legal solutions are available to contractors and beneficiaries?

In November 2024, the Romanian Constitutional Court issued a highly significant decision regarding the construction and real estate sector. The subject of the constitutional challenge was the legal provision stating: “Upon filing a lawsuit, the court may be requested to suspend the construction or demolition permit and halt the execution of works until a final decision is reached on the merits of the case,” as per Article 12, paragraph (2) of Law 50/1991. Decision no. 643/2024 came into effect in January 2025, making this measure mandatory rather than optional. As a result, if a construction permit in Romania is contested, the building construction in Romania will be suspended until a final ruling is issued. This ruling will have a major impact on the construction sector, as projects may be halted for extended periods due to legal disputes. This article explores legal solutions available to contractors and beneficiaries, recommended contractual clauses in Romania to mitigate risks, legislative recommendations, risk allocation in a contract for construction work in Romania, civil liability in Romania, etc. The Romanian law firm Pavel, Mărgărit and Associates, with extensive experience in real estate and construction law, is internationally recognized for handling high-profile real estate disputes in Romania. A real estate lawyer in Romania can be a crucial partner in navigating challenges of construction authorization in Romania, providing top-tier legal assistance and representation in construction disputes in Romania.

Property lawyer in Romania. How can contractors recover losses during work suspension?

To protect the financial interests of contractors and avoid significant risks in public procurement contracts, it is recommended to include contractual clauses in Romania that provide for compensation in case of losses, price adjustments in unforeseen circumstances, recovery of damages from bad-faith challengers, and the suspension of building construction in Romania. Incorporating contractual clauses in Romania covering force majeure events or disputes of construction authorization in Romania is essential to mitigate risks that could significantly impact project execution. A real estate lawyer in Romania can provide essential support to contractors and beneficiaries in navigating the legal risks associated with construction disputes in Romania. It is advisable to have a contract for construction work in Romania with solid guarantees against legal obstacles and without abusive clauses that could trigger claims for civil liability in Romania.

Construction lawyer in Romania. What are contractors’ options if a contract becomes unenforceable?

In cases where a construction permit in Romania is contested and the challengers prevail, the building work contract in Romania may become unenforceable. In such scenarios, contractors have several legal remedies to protect their interests. One option is seeking compensation for incurred losses. Based on contractual provisions, contractors may pursue claims against the beneficiary to recover costs incurred before the dispute resolution. They may also file a lawsuit for civil liability in Romania if the construction permit in Romania was not lawfully obtained. Additionally, contractors may file a damages claim against the challenger if they can prove the challenger acted in bad faith. A real estate lawyer in Romania can assist in all real estate and construction-related legal matters, including obtaining building approvals, preparing construction permit documents, drafting building work contract in Romania, and pursuing claims for civil liability in Romania.

Real estate litigation lawyer in Romania. Current legislative gaps

As legal practitioners, we have extensive experience with cases where a construction authorization in Romania are contested. We believe that the current legislation, specifically Law 50/1991, could be adapted, as there are still situations that create difficulties for the parties involved in a contract for construction work in Romania. Due to these legislative gaps, various work stoppages occur, leading to significant financial losses. To mitigate the risk of financial loss, we believe that construction projects would proceed more smoothly if there were provisions for sanctioning abusive challenges, clearly defining a deadline for resolving disputes to prevent excessive project delays, clarifying the procedures for contractors to claim compensation, and explicitly regulating the right to continue executing essential projects, such as hospitals or schools.

Real estate lawyer in Romania. What legal remedies are available for unjustified permit challenges?

As noted earlier, some construction permits in Romania are challenged solely to delay execution and obstruct work for a period of time. In such cases, contractors and beneficiaries should defend themselves by demonstrating the challenger’s lack of legitimate interest and the absence of valid grounds for contestation. Additionally, they may file a damages lawsuit, proving the financial harm caused by an abusive challenge. If successful, the affected party can recover losses from the bad-faith challenger. A property lawyer in Romania can be a valuable partner in managing construction projects by providing expert assistance, from obtaining a construction authorization in Romania and drafting execution contracts to representing clients in legal disputes.

Construction lawyer in Romania. How long do real estate and construction disputes in Romania take?

The duration of real estate disputes in Romania and construction disputes in Romania cannot be precisely estimated, as timelines vary depending on the complexity of the case. There are situations where the litigation process lasts only a few months, but also cases where disputes can extend over several years. Additionally, the court’s workload and the type of legal action taken also influence the duration. A real estate litigation lawyer in Romania can assist you throughout the litigation process, acting as a key factor in maximizing the chances of success. They can guide you from the early stages of obtaining building approvals to conflict situations, such as filing a claim for civil liability in Romania.

“It is essential to introduce legal protection measures for the parties involved in a contract for construction work in Romania, so that the right to challenge construction permits in Romania does not become an abusive tool that hinders the development of real estate projects,” stated Dr. Radu Pavel, Managing Partner of the Romanian law firm Pavel, Mărgărit and Associates.

In conclusion, although filing a challenge against a construction authorization in Romania represents an essential public right, the current legislation does not provide clear measures to sanction illicit behaviors, such as abusive challenges. As a result, the suspension of construction work can have negative consequences for real estate projects, potentially causing significant delays in their completion and financial losses. The Romanian law firm Pavel, Mărgărit and Associates recommends consulting a property lawyer in Romania or a real estate litigation lawyer in Romania to assist in any real estate and construction-related legal matters, such as obtaining construction permits, filing claims for civil liability in Romania, initiating damages claims, drafting execution contracts, and providing top-quality legal representation in real estate disputes in Romania.

Pavel, Margarit and Associates Law Firm is one of the top law firms in Romania, providing high-quality legal services. The firm’s clients include multinational and domestic companies of great magnitude. In 2024, the law firm’s success stories brought it international recognition from the most prestigious international guides and publications in the field. As a result, Pavel, Margarit and Associates Law Firm ranked 3rd in Romania in the Legal 500’s ranking of business law firms with the most relevant expertise. The law firm is internationally recognized by the IFLR 1000 Financial and Corporate 2024 guide. Additionally, Pavel, Margarit and Associates Law Firm is the only law firm in Romania recommended by the international director of Global Law Experts in London in the Dispute Resolution practice area. All relevant information about Pavel, Margarit and Associates Law Firm can be found on the website www.avocatpavel.com.