The National Authority for Consumer Protection (ANPC) recently organized thematic controls of real estate developers of residential projects to verify their compliance with the legal provisions on consumer protection.
The ANPC incorrectly assessed that developers do not comply with certain legal provisions on consumer protection. Consequently, it requested the implementation of measures that, in addition to being imposed in relation to breaches of law that have no legal basis, are likely to cause substantial damage to developers. They’ll also lead to additional costs that were not and could not have been taken into account when establishing the budgets of the residential projects.
One of the issues raised by the ANPC is related to developers’ alleged non-compliance with the minimum areas of the apartments, as regulated in Housing Law no. 114/1996 (Housing Law). The ANPC requested developers to (a) stipulate in the sales promises/contracts that clients have been informed about such non-compliance and (b) provide fair compensation to their clients covering the alleged damage caused thereto.
However, the control of apartments’ minimum requirements takes place at the issuance of the building permits. According to the methodological norms for the implementation of the Housing Law (as approved by GD no. 1275/2000), the issuance of building permits must be made with observance of the minimum requirements regarding the areas and the equipment level of the rooms of apartments contained in Annex 1 of the Housing Law. Also, according to the Housing Law, the municipalities (the issuers of building permits), and not the ANPC, verify compliance with the minimum areas contained in Annex 1 of the Housing Law.
Therefore, if (i) construction works were carried out in compliance with the building permit and the technical project, (ii) the apartments’ areas comply exactly with the areas from the technical project; (iii) the municipality issued a building permit for the construction of the residential project; and (iv) the building permit has been in force throughout its validity term, has never been challenged, suspended, or annulled (according to the law, the building permit is presumed to be legal), it means that the municipality considered that the mandatory requirements for apartments contained in the Housing Law are met with respect to the authorized project.
Failure to comply with the minimum areas required by the Housing Law could be the subject of an offense punishable by the ANPC only if it has influenced or is likely to influence in an essential way the clients’ decision to purchase the apartments. Given that, by means of sales promises/sales contracts, developers inform clients with respect to apartment areas, and it cannot be held that developers have used unfair commercial practices with the goal of distorting their clients’ economic behavior.
At the same time, the ANPC requires developers to include in sales promises/contracts provisions on the guarantee for hidden defects granted by contractors to developers under the terms of Law no. 10/1995 on quality in construction (Law 10/1995) despite this obligation not being provided by law for developers but only for their contractors.
There already is a three-year guarantee in place for buildings classified in the category of importance C (the category in which residential buildings are included), a guarantee of 10 years for hidden defects, and a guarantee for the entire life span of the construction of the structure. The law (Civil Code) expressly regulates a guarantee for hidden defects which is indeed related to the legal relationship between developers and their clients arising from the conclusion of sales promises/contracts. This is the guarantee of three years from the date of handover or final acceptance of the construction, except if the defect was discovered earlier, in which case the guarantee period will begin to run from the discovery date of the defect.
It seems that ANPC representatives are abusively forcing developers to grant their clients the guarantee periods regulated by Law 10/1995, although these do not concern the legal relationship between developers and their clients but the legal relationship between contractors and developers. It is absurd to require a developer to grant their clients a 10-year guarantee period for hidden defects when, according to the Civil Code, the guarantee period they are obliged to grant is of a maximum of three years. Such an obligation undertaken in addition to the obligation provided by law is likely to bring additional costs to developers compared to the budget prepared for the residential project and, therefore, unforeseen losses.
By Oana Albota, Partner, and Ana-Maria Mincu, Senior Associate, Albota Law
This article was originally published in Issue 11.5 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
