27.11.2025

Assessment of compensation for unlawfully seized real estate - recent legislative changes

The method for assessing compensation for abusively seized properties has a legal basis that has undergone numerous changes over the years, which shows that, although the restitution process has made significant progress, the redress mechanism is still subject to improvement, as problems related to its efficiency persist.

Thus, pursuant to Article 21(6) If the location or technical specifications of the property could not be established with certainty on the basis of the documents submitted in the compensation file, the assessment took into account the minimum values established by the National Agency for Cadastre and Land Registration (ANCCP) for the year in which the property was expropriated. If the location or technical specifications of the property could not be determined with certainty on the basis of the documents submitted in the compensation file, the assessment took into account the minimum values established in the notarial grid for the respective area and for the similar type of construction; if the total area of the property could not be established with certainty, the assessment took into account the minimum values mentioned, applied to an area of 21 square meters.

By Decision No. 618 of November 4, 2014[1], the Constitutional Court found that the use of the 2013 notarial tables as an assessment tool within the compensation mechanism established by the legislature is a solution in line with the recommendations made by the Strasbourg Court in the pilot judgment Maria Atanasiu and Others v. Romania. The Constitutional Court emphasized that the legislature has a wide margin of discretion in establishing the criteria applicable for calculating and awarding compensation, with the obligation to ensure a fair and proportionate balance between the public interest, on the one hand, and the individual rights of the persons concerned by the restitution process, on the other.

As of May 29, 2017, the assessment of compensation had to be carried out taking into account the location and technical characteristics of the property (including the category of land use and type of construction) relevant at the time of the abusive takeover.

As the compensation process was prolonged, the provisions of Article 21(6) of Law No. 165/2013 were amended several times in 2020, mainly with the aim of establishing a link between the assessment of the amount of compensation and the amount of compensation paid to the claimant. These amendments, in their successive forms, were subject to both a preliminary review and a subsequent review by the Constitutional Court on October 7, 2020. These amendments, in their successive forms, were subject to both a preliminary review and a subsequent review by the Constitutional Court on October 7, 2020[2]and March 18, 2021[3], respectively. The Court's latest decision, which found that the amended provisions of Law No. 163/2015 were unconstitutional, led to a serious problem with the payment of compensation, which was postponed for several months until the Romanian Government adopted a new amendment to Article 21(6) of Law No. 165/2013 on July 9, 2021. According to this new version of the article, compensation is calculated by applying the notarial scale valid for the year preceding the issuance of the decision by the National Commission for the Expropriation of Property. According to this new version of the aforementioned article, compensation is calculated by applying the notarial scale valid for the year preceding the issuance of the decision by the National Commission for Property Compensation (C.N.C.I.), taking into account the technical characteristics of the property and its category of use at the time of its takeover.

In its judgment in the case of Văleanu and Others v. Romania[4], the Strasbourg Court ruled that the restitution mechanism, as applied by the Romanian national authorities, was ineffective and inconsistent. The Court found a violation of Article 1 of Protocol No. 1 to the Convention, decided that Romania must pay the applicants the amounts set out in its judgment, in accordance with the scales established for the year in which the judgment was delivered, as compensation for pecuniary damage, and ruled that, without calling into question the State's wide margin of appreciation in choosing the general measures to be taken to put an end to a violation, the valuation of the properties should be based on the most recent notarial scales available, giving priority to the current state of the properties in question.

Following the Strasbourg Court's ruling in Văleanu and Others v. Romania, the Constitutional Court issued Decision No. 43/2025[5]finding that the phrase "taking into account the technical characteristics of the property and its category of use at the time of its takeover" contained in the provisions of Article 21(6) of Law No. 165/2013 is unconstitutional. In its reasoning, the Constitutional Court held that Parliament would have to make a correction and identify an appropriate legislative solution regarding the criteria for determining the amount of compensation, in light of the considerations in the Văleanu and Others v. Romania judgment.

Following the Constitutional Court's ruling in Decision No. 43/2025, the Government issued Emergency Ordinance No. 38/2025[6], which made a number of amendments and additions to Law No. 165/2013. Among these amendments, it should be noted that Article 21(6) of Law No. 165/2013 has been reworded according to which the valuation of real estate is expressed in points and is made by applying the notarial grid valid for the year preceding the issuance of the decision by the C.N.C.I. by reference to the area and category of real estate in the respective locality and by applying the criteria in the annex that is an integral part of the law.

The same Government Emergency Ordinance No. 38/2025 provides that, after Article 52 of Law No. 165/2013, an annex is introduced containing the criteria for determining the value of real estate in accordance with Article 21(6) of Law No. 165/2013. The criteria in this annex are different for the valuation of buildings and land, with correction coefficients provided for depending on the purpose of the buildings, the year of their construction, the area and category of the real estate in the respective locality, and the location of the real estate. The criteria in this annex are different for the valuation of buildings and land, with correction coefficients provided for depending on the purpose of the buildings, the year of their construction, or the category of land use and their location within or outside the built-up area of localities.

Following these legislative changes in 2025, it remains to be seen how effective the new compensation mechanism will be in practice.

An article by Laura Mihalache (lmihalache@stoica-asociatii.ro), Senior Partner, STOICA & ASOCIATII.

 [1] Published in the Official Gazette, Part I, No. 75 of January 28, 2015.