Green lease law and regulation in Romania

A building owner is required to obtain an energy performance certificate for the construction, sale or rental of all buildings with the exception of protected monuments, religious buildings, temporary buildings, industrial sites, workshops and non-residential agricultural buildings with low energy demands (Law 372/2005 regarding the energy performance of buildings).

For the renovation of old buildings where the useful area exceeds 1,000 square metres the owner is obliged to take measures to improve, to the extent possible, the energy performance of the building.

An owner must obtain an energy performance certificate for all new buildings and this will be included in the documentation for the reception (i.e. occupancy permit) upon termination of construction works (Methodological Norms regarding energy performance of buildings dated 1 October 2007). The Certificate is valid for 10 years from issuance.

In the case of old building, a certificate should be obtained, but only for the purpose of sale, rental or renovation of a buildings in the case mentioned in a) above.

New buildings (with the exceptions mentioned at item a) above must have an energy performance certificate. Obtaining a certificate has been compulsory since 1 January 2007 for all buildings, except for the sale/rental of apartments occupied by a single family in a block of flats for which the regulations became applicable from 1 January 2011.

Law 372/2005 was adopted on 19 December 2005 in order to implement EC Directive 2002/91/CE and was scheduled to enter into force on 1 January 2007.

Initially, motivated by the shortage of authorised auditors who could issue such certificates, the entry into force of some of the provisions (i.e. the mandatory obligation to obtain a certificate for the purpose of the sale or renting of sale/rental of apartments occupied by a single family in a block of flats) was postponed until 1 January 2010 and then until 1 January 2011.

Due to divergent interests in the market, it has long been disputed as to whether the certificate was mandatory. With this in mind, the National Union of the Romanian Public Notaries issued decision no. 335/2010 with the purpose to create a single practice. When public notaries are called to authenticate the agreements for sale/rental transactions they must proceed with the authentication of the transaction documents only after the seller has declared that he provided the certificate to the purchaser, who will in turn confirm receipt. If the certificate has not been transferred, the public notary may only authenticate the transaction documents if after explaining to the parties the provisions of Law 372/2005, the parties then state that they acknowledge the obligation of the owner to provide such a certificate and that the purchaser/ lessee understands and agrees to conclude the transaction bearing the risk and undertaking any possible consequences.

The certification of buildings is becoming increasingly popular in Romania. BREEAM Accreditation Services has started to gain the attention of investors. Some buildings have received LEED/ BREEAM accreditation since 2009.

In the case of residential buildings rent for the flats should cover: the administration; maintenance and repair costs; taxes on buildings and land; and the recovery of investment and a profit as negotiated by the parties (Article 31 of Law 114/1996 regarding flats). Nevertheless, the parties may also agree within the lease contract that the tenant shall pay separately from the rent all costs related to the use of the premises.

In the case of the lease of office, commercial or industrial space the parties have to agree upon the services that the landlord will provide and the costs that the tenant will pay. Generally, the tenant pays the service charges in advance and each year this amount will be settled against the actual incurred costs. Utilities are usually paid separately based on the exact consumption of the tenant; upon receipt of the invoice from the utility provider the landlord will recharge the tenant on a non-profit basis.

In the case of residential premises the owner has the obligation to consolidate and modernise the building, perform energy rehabilitation and enhance the energy efficiency of the building (Article 16 of Law 230/2007 regarding owners’ associations). However, a landlord must take care to ensure that a tenant continues to makes use of the leased premises without any hindrance (Article 1420 (3) of the Civil Code). Therefore, (whether in residential or in office, commercial or industrial leases) a landlord may perform the works required to improve the energy efficiency of the building provided that such works do not hinder the use of the leased space by the tenant. Unless the parties expressly agreed in the lease contract, the landlord cannot modify the rent due until the expiration of the contract term following the performance of such improvements.

There are no similar provisions with respect to other types of premises (office, commercial etc.), therefore, it will be a matter of contractual agreement.

If not previously agreed with the tenant, the landlord of residential premises cannot charge the costs for the measures under (b) by increasing the rent. Upon the expiry of the term of the contract, it can request the current tenant or the new tenant to pay an increased rent to take into consideration the added value following the energy efficiency measures that was performed.

In the case of an office/commercial lease such costs may be included and therefore reimbursed from the service charges based on specific contractual provisions.

No such standard exists in Romania however the allocation of costs and incentives to improve sustainability of buildings or its use can be regulated in a “green paragraph” which is part of the contract.

Council Directive 75/442/EEC on waste, Council Directive 91/689/EEC on hazardous waste and Directive 2006/12/CE on waste were transposed into Romanian law through Emergency Ordinance no. 78/2000 approved by Law no. 426/2001. However, EU Directive 2008/98/EC on waste repealed the aforementioned Directives and the Romanian Environmental Ministry published a draft law in April 2011 in response as a means to implement EU Directive 2008/98/EC into Romanian law.

No such standard exists in Romania. However, as a typical regulation, the use and sale of products containing asbestos are forbidden according to Government Decision no. 124/2003 on prevention, reduction and control of asbestos environmental pollution.

In the case of residential premises, there are a series of programmes meant to improve sustainability of buildings or their use by allocation of different categories of funds for the benefit and use of the owners of such buildings. As such, the costs for the works for the increase of energy performance of the buildings may be either partially or totally reimbursed to the owners by local councils from the budgets of the territorial and administrative units (Article 12 of the Emergency Ordinance no. 18/2009); paid by the owner with the help of a bank loan secured by a the Government’s guarantee (Article 8 of the Emergency Ordinance no. 69/2010); or the programme “Green House” (through the Environmental Fund) provides RON 6,000 (apprx. EUR 1,425) for the acquisition of solar panels and RON 8,000 (apprx. EUR 1,895) for heat pumps.

In the case of office/commercial buildings, there are no such programmes. Therefore, the allocation of costs should be established within the lease contract between landlord and tenant in a “green paragraph”.