BUCHAREST REAL ESTATE CLUB

Tatiana Fiodorov, Real Estate Lawyer, Fiodorov & Partners

DTP No. 1113/2023 regulates the functioning of the Bucharest Municipality’s Technical Traffic Commission (the “Traffic Commission”). Generally, the Commission’s responsibilities involve regulating traffic on public and private roads open to the public, creating road infrastructure, placing installations and temporary structures near public roads, enforcing traffic restrictions and detours, determining public transport routes and station locations, urban planning, street network development, categorizing streets or public parking areas, and setting traffic restrictions for public gatherings.

It is important to note that DTP No. 1113/2023 distinguishes between a “preliminary agreement,” issued during the development of zoning (“PUZ”) and detailed urban plans (“PUD”), and an “endorsement,” issued for technical construction permit documentation (“DTAC”).

The proposed amendments aim to ensure that preliminary and traffic permits issued by the Traffic Commission fully consider the legal and urban planning context, aligning with “the legal position of the mayor and the municipality.” Specifically, the amendments include clarifying that the Traffic Commission is a technical body with an “advisory role,” which was not previously stipulated. Regarding the signing of permits, the amendment suggests that these will be signed by each attending member involved in the decision-making, unlike the previous rule, which required only the signature of the chairperson or vice-chairperson.

The most significant change concerns the issuance and signing process for preliminary agreements and permits. Preparation of these documents will remain under the Traffic Management Service.
However, signing will now fall under the executive director of the Transportation Department, with an exception for preliminary agreements and endorsements for PUZ, PUD, and DTAC, which will be signed by the General Mayor of Bucharest.

In this context, one may ask to what extent the Mayor’s failure to sign these preliminary agreements and endorsements could block the urban planning documentation and construction permitting processes. Is this amendment a true threat, without available remedies, for good-faith real estate developers in Bucharest?

Initially, it must be noted that the Traffic Commission’s permit is not always required. According to Article 5 of Law No. 50/1991, the Traffic Commission’s permit is unnecessary for single-family dwellings located on category II and III streets that are not in the vicinity of a roundabout intersection.

Specifically, it is essential to analyze the impact of this change on the centralization of signing preliminary agreements/permits for PUZ, PUD, and DTAC under the direct authority of the General Mayor. The signature represents a prerequisite for the existence of an administrative act; without it, the document is merely a draft (even if adopted by the necessary majority). Therefore, the lack of the Mayor’s signature renders the preliminary agreements/permits for PUZ, PUD, and DTAC nonexistent.

Moreover, under Article 5, paragraph 3 of Law No. 50/1991 on construction permitting, which stipulates that permits and agreements established by the urban certificate, along with the environmental authorities’ opinion, must be attached to and become part of the construction permit, it may be argued that the absence of the Traffic Commission’s permit could lead to the annulment of the construction permit. Similarly, according to Article 64, paragraph 2 of Law No. 350/2001 on territorial and urban planning, “Territorial and urban planning documentation approved without the permits provided by applicable regulations is void.”

However, considering the advisory role of the Traffic Commission, it may be argued that as long as this body has been consulted, the preliminary agreement/endorsement should not constitute a procedural defect severe enough to annul the documents, provided that there is evidence of its involvement in issuing the administrative act in question.

Finally, there has been discussion in practice about the potential application of tacit approval if the Traffic Commission fails to issue the required permit within a reasonable timeframe. Until November 2019, according to Article 7, paragraph 2, letter b) of Law No. 50/1991, the tacit approval sanction applied to endorsement not issued within 15 days of registration, without further procedures. This provision was amended in 2019 (by Law No. 193/2019), with the current sanction being a fine imposed by the ISC. Consequently, tacit approval no longer applies to endorsements.

Affected parties may refer to the provisions of Administrative Litigation Law No. 554/2004, as amended, regarding unjustified refusals to resolve a request. This law applies when there is explicit evidence of an authority’s intent to refuse a request based on an abuse of power. According to the law, abuse of power implies exercising discretionary authority in violation of the legally established limits or infringing on citizens’ rights and freedoms. In this context, General Council Decision No. 66/06.04.2006 of the Bucharest General Council (“GCD No. 66/2006”) may also be invoked, which regulates the minimum parking space requirements for new constructions in Bucharest. According to this, failing to meet the minimum parking requirement by up to 20% obligates the applicant to pay a fee of EUR 10,000 per parking space not provided on their lot (the “Exemption Fee”). Thus, GCD No. 66/2006 itself provides a remedy that may be specified in the Traffic Commission’s permit.

The next steps will include the mayor’s approval of the proposed amendments to DTP No. 1113/2023. This may significantly impact the approval process for new projects, from urban planning documentation to technical construction permit documentation. We strongly recommend that stakeholders in the real estate and construction sectors closely monitor these developments and, if necessary, propose
additional amendments to protect their interests.

The Romanian Diversity Chamber of Commerce (RDCC) and The British Romanian Chamber of Commerce (BRCC) are excited to announce the successful completion of the Real Estate Conference 2024, held at The Marmorosch Hotel in Bucharest. The event brought together top industry professionals, legal experts, and design innovators to discuss the future of real estate with a strong focus on sustainability, accessibility, and inclusive design. Attendees included developers, architects, and other stakeholders invested in a more inclusive approach to real estate development.

”The European Green Deal brings with it a blend of responsibilities, challenges, and opportunities for Romania’s market and its citizens. These current realities reshape how we build and invest, transforming energy use in buildings as well as the technologies that power them. To support this transition, both EU and national funding are available, encouraging innovative, sustainable solutions in new projects. These initiatives provide a pathway for Romania to embrace energy-efficient buildings and make meaningful progress on the journey toward our long-term commitment to energy responsibility.” states Ramona Moldovan – Deputy Secretary General – Ministry of Energy.

Casiana Fometescu, President Romanian Carbon Association and Founder of Carbon Expert affirmed: “If we want to build sustainably, we should build honestly. And this means building for people and in harmony with nature.”

“We took on the role of pioneers of the renovation/redevelopment segment, focusing on old buildings with historical value. A niche market towards which we have dedicated a significant amount of our investments. Now, taking into account that the deep renovation and retrofitting of an existing building can result in 50-75% less carbon and green gas emissions, it is safe to say that our projects bring a valuable contribution to the environment, supporting the European Commission’s carbon-neutrality objectives, while also introducing to the local market new exciting concepts that revive and renew the urban landscape.” said  Andreea Dumitru, Chief Marketing Officer, Hagag Development Europe.

Key Highlights from the Conference:

1. Sustainability as the New Norm – Speakers emphasized that energy-efficient and sustainable practices should be central to all new and existing real estate projects. The adoption of advanced technologies like photovoltaics and smart building management systems was discussed as necessary for reducing energy consumption and carbon emissions. Panelists referenced projects utilizing smart sensors and automation to monitor and manage energy use, showcasing tangible benefits like lower operational costs and reduced carbon footprints.

2. Challenges of Retrofitting and Modernization – Retrofitting older buildings, particularly in historic and densely populated areas, remains a significant challenge due to structural and regulatory constraints. Experts highlighted the importance of partnering with local authorities and using innovative energy sources such as geothermal and biomass systems, which are still underutilized in Romania. A case study of a retrofitted historical building in Bucharest demonstrated how the integration of energy-efficient systems and modern management tools can bring heritage structures up to contemporary standards.

3. Emphasizing Inclusivity and Universal Design – The conference stressed the importance of creating spaces that are truly inclusive, going beyond compliance to meet the needs of all users. Discussions focused on how universal design can ensure accessibility for people with disabilities, families, and various user groups. Featured projects included those with thoughtful additions like baby rooms, pet-friendly zones, and emergency pull cords positioned for easier access. These elements make spaces safer and more accommodating for everyone.

4. The Concept of the Office as a Dynamic Space – Panelists introduced the idea of the office as a versatile environment, likening it to a toolbox that provides different areas suited to specific work needs. This approach supports varied tasks and promotes better employee well-being. A showcase office in Bucharest featured adaptable workstations, ergonomic furniture at adjustable heights, and multipurpose meeting rooms to cater to both neurodiverse employees and those needing comfortable, flexible spaces.

5. Certifications Reflecting True Commitment – Certification programs were discussed as important indicators of a building’s dedication to sustainability and accessibility. Access4You was specifically mentioned as a certification that goes beyond basic requirements to ensure spaces are user-friendly for everyone. A highlighted project from Hungary demonstrated how Access4You certification ensured inclusivity by providing comprehensive access features for wheelchair users, parents with strollers, and others with mobility challenges.

6. Education and Financing for Sustainable Solutions – Experts underlined the need for educational initiatives for tenants and investors to recognize the long-term value of sustainable practices. Financing options for renewable energy projects, like on-site photovoltaics and modular designs that adapt to future needs, were also explored. A Romanian developer shared insights on green lease agreements that incentivize tenants to adopt energy-saving measures, combined with educational programs to support sustainable habits.

The event concluded with a call for stronger collaboration among developers, government bodies, and local communities. Real estate, as a significant source of emissions, must transition from competitive practices to cooperative strategies to meet EU carbon reduction targets and contribute to a resilient and inclusive future.

Industry Leaders in Attendance: Speakers and representatives from organizations including 4ENVIGO, ADP Green Building, AFI Europe Romania, Ask Wire, BRCC, CBRE Romania, CPI Romania, Dentons, Globalworth, Grupo Demetra, Hagag Development Europe, Hotspot Workhub, Phoenix Environmental Romania, Skanska, and Steelcase shared their expertise on creating accessible and sustainable real estate.

Event Partners: Dentons, CPI Property Group, Ambasada Sustenabilitatii in Romania, Bucharest Real Estate Club, Romania Property Club, Jurnal de Sustenabilitate, Nine O’Clock, Business Review.

• Nearly three-quarters of study respondents plan to expand their portfolio of bricks and mortar stores.
• Retailers primarily target Retail Parks for expansion plans.
• 72% of retailers aim to increase their store space, compared to 26% in 2022, with physical stores remaining a key element in the overall strategy.

The preference for larger stores is one of the key trends observed in the market, particularly among fashion and athleisure brands in capital cities and major urban areas. A trend specific to the luxury sector is owning stores instead of leasing them. However, leasing remains the predominant strategy for the mass market, with 84% of respondents stating they have no plans to purchase stores.

„Improved consumer confidence is starting to translate into higher spending, which is giving retailers confidence to commit to stores both in markets familiar to them, and new markets altogether. Brand loyalty is often enhanced through in-store experience, and this is where we see retailers really committing to store investments and using bricks and mortar to truly showcase their brand identity”, highlighted Chris Gardner, Head of European Retail, CBRE.

In terms of preferred formats, Retail Parks are dominant, with 45% of respondents favouring them as locations for future stores. The popularity of this format is also supported by factors such as: 1. High foot traffic generated by residents in the area, 2. Access to free parking, and 3. Similar retailer profile within the same retail park—all three criteria being identified as influential factors for store performance.

Overall, bricks and mortar stores remain an essential component of strategy, with 97% of respondents acknowledging their importance. Additionally, there is a shared belief on the effectiveness of physical stores, which outperform online retail in terms of consumer engagement, cross-selling, overall sales strategy effectiveness, introducing new products, and attracting new customers.

The Romanian Diversity Chamber of Commerce (RDCC) and The British Romanian Chamber of Commerce (BRCC) are pleased to announce the Real Estate Conference 2024, set to take place on November 5th, 2024 at The Marmorosch Hotel in Bucharest.

“The Real Estate Conference 2024 is a pivotal platform for fostering dialogue on the importance of accessible and inclusive design,” said Lestat Monroe, founder of the Romanian Diversity Chamber of Commerce. “As we look towards the future, it’s important that our real estate developments reflect the diverse needs of all community members. This conference will highlight the strategies, legal frameworks, and innovative designs necessary to create truly inclusive spaces.”

“This conference will serve as a key platform to explore new innovations shaping the real estate and construction industries, while also highlighting the critical importance of inclusivity. Attending the conference offers a great opportunity for industry professionals to come together, share expertise, and collaborate on building a more accessible and inclusive future.”, said Madalina Ciinaru – Head of British Romanian Chamber of Commerce, Bucharest Office

The key panel “Building the Future: Accessibility and Inclusive Design in Real Estate” will delve into the critical aspects of making real estate developments accessible for everyone.