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Forced Sale and Judicial Auctions of Romanian Property to Satisfy Foreign Judgments or Debts

This article explains when and how creditors can force the sale of Romanian real estate to enforce foreign court judgments or unpaid international debts. It covers recognition of foreign titles, steps of judicial auctions, debtor protections and how creditors abroad can coordinate effectively with Romanian bailiffs and courts.

Foreign creditors increasingly find themselves needing to enforce judgments or unpaid debts against assets located in Romania. Because Romanian real estate often represents the debtor’s most valuable asset, the question quickly becomes whether and how a foreign creditor can force the sale of that property through Romanian courts and judicial auctions.

This article explains, in practical terms, how a foreign creditor can move from a foreign judgment or arbitral award to the seizure and sale of Romanian immovable property. It focuses on three pillars of the process: (1) attaching Romanian real estate, (2) recognising and enforcing foreign judgments or awards, and (3) understanding how judicial auctions work in practice, including pricing rules and typical risks for buyers.

How Foreign Creditors Can Attach Romanian Real Estate

1. Enforcement in Romania is territorial

Romania applies the basic principle of territoriality of enforcement. Even if a creditor already holds a final and binding judgment abroad, any compulsory measures against a debtor’s assets located in Romania must follow Romanian enforcement law and procedure. In other words, the mere existence of a foreign judgment does not allow a creditor simply to seize and sell Romanian property; the judgment must first be made effective in Romania, then enforced through local bailiffs and courts.

The legal framework is primarily contained in the Romanian Code of Civil Procedure, particularly Book V on enforcement. Enforcement is treated as the second stage of civil proceedings: once a right has been recognised by a judgment or another enforceable title, the creditor can use enforcement procedures to compel the debtor to comply if payment is not made voluntarily.

2. What counts as an enforceable title in Romania

To attach and sell Romanian immovable property, a creditor must have an enforceable title recognised by Romanian law. Typical enforceable titles include:

  • final court judgments issued by Romanian courts;
  • foreign court judgments that have been recognised in Romania through the appropriate procedure (or which are directly enforceable under EU regulations);
  • domestic arbitral awards and foreign arbitral awards recognised in Romania under the New York Convention and the Code of Civil Procedure;
  • certain notarial deeds containing loan or payment obligations and an express clause of enforceability; and
  • other titles declared enforceable by specific laws (for example, some tax or administrative titles).

For foreign creditors, the key challenge is to transform their foreign decision into a Romanian enforceable title. That step is addressed in detail in the section on recognition of foreign judgments. Once a foreign title is recognised or declared enforceable, it can be used in the same way as a domestic judgment for enforcement against the debtor’s Romanian assets.

3. Identifying and locating Romanian real estate

Before an attachment can be registered, the creditor needs to identify the debtor’s real estate in Romania. Practically, this often involves:

  • searching the Romanian land book (cartea funciară) based on the debtor’s name or identification data, where available;
  • obtaining updated land book extracts to verify ownership, co-ownership shares, existing mortgages, easements and other encumbrances;
  • checking whether any precautionary measures (such as seizures or caveats) already exist; and
  • confirming the cadastral status of the property (plot boundaries, buildings, and whether the property is fully registered in the integrated cadastre and land book system).

In many cases, foreign creditors work with Romanian counsel or investigative service providers to map the debtor’s asset base and identify which property is worth pursuing. Real estate that is already heavily encumbered with prior mortgages, tax liens or other security may offer only limited recovery prospects compared to relatively “clean” assets.

4. Precautionary measures: conservatory seizure and land book notations

Once a foreign creditor has a serious claim (for example, a pending lawsuit abroad or an existing judgment awaiting recognition), Romanian law offers precautionary measures to protect assets from dissipation while the main proceedings are pending. The two most important tools are:

  • Conservatory seizure (sechestru asigurător): a court order that freezes certain assets to ensure that they will still be available for enforcement when the creditor obtains an enforceable title. For immovable property, this translates into a prohibition on disposal or encumbrance beyond what already exists.
  • Notations in the land book: the conservatory seizure and other enforcement-related measures are recorded in the land book, giving publicity to the freeze and warning potential buyers and creditors that the property is under attachment.

To obtain a conservatory seizure, the creditor typically must show a prima facie claim and a risk that enforcement would be endangered if the debtor is free to dispose of the assets. The court may condition the seizure on the creditor providing security (for example, a cash deposit or bank guarantee) to cover potential damage to the debtor if the claim later proves unfounded.

5. Opening enforcement and attaching the property

Once the creditor holds an enforceable title in Romania, the next step is to commence enforcement through a licensed bailiff (executor judecătoresc). The creditor files an enforcement request with the bailiff, enclosing the enforceable title and basic information about the debtor and the targeted assets. The bailiff then requests authorisation from the competent enforcement court. After approval, enforcement can start.

For immovable property, the key enforcement measures include:

  • seizure (urmărire imobiliară): the bailiff issues a seizure report and requests that the seizure be recorded in the land book. From that moment, the property is considered under enforcement for the benefit of the creditor;
  • notification to the debtor and other interested parties: the debtor is served with enforcement documents, and other creditors, co-owners and holders of real rights over the property may also be informed; and
  • valuation of the property: an evaluation is carried out either by the bailiff, using market-based criteria, or by an expert appointed for that purpose. The resulting appraised value forms the basis for setting the minimum auction price.

At this stage, the property is attached: the debtor can no longer freely sell or encumber it to the detriment of the enforcing creditor. Any sale concluded after the registration of the seizure may be ineffective against the creditor and can be challenged.

6. Interaction with other creditors and insolvency proceedings

Foreign creditors attaching Romanian real estate must be aware that they may not be alone. Other creditors may already hold mortgages, statutory liens or enforcement titles, and those rights can affect priority in distribution of proceeds. In addition, if the debtor is declared insolvent, individual enforcement proceedings are generally stayed and integrated into a collective insolvency framework under Romanian insolvency law.

In practice, this means that foreign creditors should:

  • conduct careful due diligence on existing encumbrances before investing in enforcement costs;
  • monitor insolvency filings and consider taking part in the insolvency proceedings as secured or unsecured creditors, as appropriate; and
  • coordinate with other major creditors where possible, to avoid unnecessary duplication of enforcement steps and to explore restructuring options that may offer better recovery than a distressed judicial sale.

    Recognition of Foreign Judgments and Then Enforcement

    1. Different regimes for EU and non-EU judgments

    Foreign creditors must first understand that Romanian law distinguishes between:

    • judgments from courts of EU Member States; and
    • judgments from courts of non-EU states.

    For most civil and commercial judgments from other EU Member States, the Brussels I Recast Regulation (Regulation (EU) No 1215/2012) applies. Under this regime, exequatur (a separate declaration of enforceability) has been abolished: an EU judgment that falls within the Regulation is, in principle, directly enforceable in Romania once the creditor obtains the necessary certificate and follows the procedural steps for enforcement.

    For judgments from non-EU states, and for some categories not covered by EU regulations, Romania uses a traditional exequatur procedure governed by the Code of Civil Procedure and relevant international treaties. In such cases, a Romanian court must formally recognise the foreign judgment and, if necessary, declare it enforceable before enforcement can begin.

    2. The exequatur procedure for foreign judgments

    The exequatur procedure is a dedicated action before a Romanian court in which the creditor asks for recognition (and, where appropriate, enforcement) of a foreign judgment. The court does not re-examine the merits of the case; it focuses on whether certain formal and substantive conditions are met. Typical conditions include:

    • the judgment is final and enforceable in the state of origin;
    • the foreign court had jurisdiction according to rules compatible with Romanian private international law;
    • the defendant was properly summoned and had an opportunity to defend the case;
    • the judgment is not manifestly contrary to Romanian public policy (ordre public); and
    • there is no irreconcilable domestic or previously recognised foreign judgment between the same parties and on the same subject matter.

    Depending on the bilateral and multilateral treaties to which Romania is party, the exequatur procedure can be simplified or adapted, but the core idea remains: a Romanian court “imports” the foreign judgment into the Romanian legal order so that it can produce effects there, including through enforcement.

    3. Recognition and enforcement of foreign arbitral awards

    Foreign arbitral awards are treated separately from foreign court judgments. Romania is a party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Under the Convention and the Romanian Code of Civil Procedure, foreign arbitral awards are generally recognised and enforced unless specific grounds for refusal apply, such as:

    • invalid arbitration agreement;
    • serious procedural irregularities (for example, lack of proper notice or inability of a party to present its case);
    • the award deals with matters not capable of settlement by arbitration under Romanian law; or
    • recognition would be manifestly contrary to Romanian public policy.

    In practice, foreign arbitral awards are often easier to enforce than foreign court judgments, provided the award is clear, final and properly documented. Once recognised, a foreign arbitral award has the same force as a domestic judgment and can be used as an enforceable title for the sale of Romanian property.

    4. Practical steps in moving from foreign judgment to Romanian enforcement

    In a typical scenario, a foreign creditor follows these stages:

    1. Obtain a final judgment or arbitral award abroad. The creditor ensures that all appeal periods have expired and that the decision is enforceable in the country of origin.
    2. Collect documentation. This usually includes a certified copy of the judgment, proof of finality, translations into Romanian by a sworn translator, and, for EU judgments, the relevant certificate under Brussels I Recast.
    3. File for recognition (and, if needed, enforcement) in Romania. For non-EU judgments or arbitral awards, the creditor files an exequatur application before the competent Romanian court. For many EU judgments, a formal recognition step is not required, but the creditor still needs the proper certificate and may need to address limited grounds for refusal if raised by the debtor.
    4. Obtain a Romanian decision on recognition/enforceability. When the court grants recognition (and enforcement), the foreign judgment becomes an enforceable title in Romania, subject to any conditions stated by the court.
    5. Instruct a Romanian bailiff to commence enforcement. The creditor submits the enforceable title to a bailiff, who requests authorisation from the enforcement court and then begins enforcement actions, including seizure and auction sale of the debtor’s property.

    The timeline for these steps varies. A straightforward exequatur with no opposition can be relatively quick, but if the debtor contests recognition or raises public policy or due process objections, the process may be significantly prolonged. Creditors should factor in the possibility of additional litigation and legal costs at the exequatur stage, before any actual enforcement takes place.

    5. Limits on enforcement of provisional or interim measures

    Foreign creditors sometimes hold provisional measures (such as freezing orders) issued by foreign courts. Under the Romanian Code of Civil Procedure, foreign decisions that have purely provisional or conservatory character generally cannot be enforced through the standard exequatur procedure. There are, however, special EU regulations that allow certain interim measures ordered by courts in other Member States to be recognised and enforced under specific conditions.

    As a result, when dealing with interim relief, foreign creditors usually need to rely on Romanian courts to grant local precautionary measures (such as conservatory seizure) rather than trying to enforce foreign interim orders directly. This requires a careful mix of strategy: using foreign proceedings to obtain a final title while simultaneously seeking Romanian interim protection over local assets.

    Steps in Judicial Auctions, Minimum Prices, Risks for Buyers

    1. Overview of the judicial auction process

    Once enforcement against Romanian real estate has been authorised and the property has been seized and valued, the bailiff moves to the phase of sale by judicial auction. Judicial auctions are strictly regulated by the Code of Civil Procedure and are designed to combine transparency, fairness among creditors and debtor protection, while ensuring that the property can be sold in a commercially viable way.

    In broad outline, the process for selling a piece of real estate in a judicial auction includes:

    • valuation and setting of the basic price;
    • publication of auction notices;
    • holding one or more auction sessions;
    • adjudication of the property to the highest bidder who meets the conditions; and
    • distribution of the sale proceeds among the creditors.

    Although the steps are similar in all cases, the details can vary depending on whether the enforcement is carried out in the context of ordinary enforcement proceedings, insolvency proceedings or special legal regimes (for example, for agricultural land or assets subject to special regulation).

    2. Valuation and setting the minimum price

    The valuation stage is crucial for both creditors and prospective buyers. The bailiff typically determines the value of the property based on its market value, using average prices in the relevant locality and taking into account factors such as location, condition, and comparable transactions. If the bailiff cannot carry out the valuation alone or if the parties request it, a certified expert may be appointed to prepare a valuation report.

    This appraised value becomes the basic price for the auction. In practice, the first auction is organised using a starting price based on this valuation. If the property is not sold at the first auction, the law allows subsequent auctions, and the starting price can be reduced according to thresholds and conditions set out in the Code of Civil Procedure. The exact percentages and reduction rules are technical and may change as the Code is amended, so buyers and creditors should always check the current legislation or seek up-to-date professional advice rather than assuming fixed figures.

    To participate in the auction, bidders are usually required to lodge a participation guarantee (for example, a fixed percentage of the starting price) and comply with formal registration requirements. This helps to ensure that only serious bidders take part and that winning bidders have an incentive to complete the purchase.

    3. Publicity and transparency of judicial auctions

    Romanian law places strong emphasis on transparency. Before a judicial auction takes place, the bailiff must publish auction notices that include key information such as:

    • identification and description of the property;
    • the appraised value and starting price;
    • the date, time and place of the auction;
    • conditions of participation and amount of the participation guarantee; and
    • contact details for obtaining further information and viewing the property.

    Notices are published in official registers and sometimes on dedicated online platforms, and they may also be posted at the property location or in other public places. This publicity aims to attract a sufficient number of bidders to achieve competitive prices and to ensure that the auction cannot later be challenged on the ground that it was conducted secretly.

    4. How the auction session works

    On the day of the auction, the bailiff verifies the identity and eligibility of bidders, checks that they have lodged the required guarantee and confirms that there are no procedural obstacles (for example, a court-ordered suspension of enforcement). The auction then proceeds as a competitive bidding process.

    Key principles include:

    • the asset is awarded to the person who offers the highest price, provided that the bid meets or exceeds the minimum price set for that auction session;
    • if only one bidder appears and offers at least the starting price, the property can still be awarded, provided that all legal requirements are met;
    • the debtor and certain related persons may be prohibited from bidding, and creditors may face restrictions on acquiring the property below certain thresholds to avoid abuse.

    At the end of the auction, the bailiff draws up a minutes of the auction session recording all essential data, including bids and the winning bidder’s identity. If the auction is successful, the creditor’s claim is considered satisfied, in whole or in part, from the price to be paid by the winning bidder, subject to subsequent distribution.

    5. Adjudication, transfer of title and distribution of proceeds

    After the auction, several important legal steps occur:

    • Adjudication deed: once the winning bidder pays the purchase price and associated costs within the deadlines set by law, the bailiff issues an adjudication deed. This document serves as the title for the buyer to register ownership in the land book and replace the debtor as owner.
    • Registration in the land book: based on the adjudication deed and supporting documents, the buyer requests the registration of their ownership right. Registration ensures opposability to third parties and reflects the property’s new legal status free of the foreclosed encumbrances, except for those expressly maintained by law.
    • Distribution of proceeds: the bailiff prepares a distribution schedule dividing the sale price among creditors in accordance with their ranking and any recognised preferences. Secured creditors (for example, mortgagees) are typically paid first, followed by unsecured creditors, provided there are sufficient funds.

    Creditors or the debtor may challenge the distribution schedule or certain steps of the enforcement if they consider that their rights were infringed, but recent reforms seek to limit challenges that would undermine the stability of adjudication and the buyer’s title.

    6. Debtor protections and challenges to the auction

    Romanian law offers debtors multiple tools to contest enforcement, including the sale of property at auction. The most important is the challenge to enforcement (contestație la executare), which can target either the enforcement as a whole or specific acts of enforcement, such as the valuation, the auction minutes or the distribution schedule.

    Common grounds include:

    • lack of a valid enforceable title;
    • prescription of the right to enforce;
    • procedural irregularities (for example, lack of proper notice, defects in publication, errors in valuation);
    • abuse of rights or manifest disproportionality; and
    • in some cases, arguments that recognition of a foreign judgment should have been refused or limited.

    Courts can suspend enforcement pending resolution of the challenge, usually against a security deposit. For foreign creditors and auction buyers, this means that even after a successful auction, litigation risk can persist until challenges are resolved, although the legal framework aims to protect buyers who act in good faith and rely on the public records.

    7. Minimum prices and risk of underselling

    From the creditor’s perspective, a key concern is avoiding a situation where valuable property is sold for an unduly low price. The Code of Civil Procedure therefore contains rules on minimum prices and on how much the price can be reduced between successive auctions if the property does not sell at the first attempt. While the precise thresholds and percentage reductions are technical and can be amended by legislation over time, the general structure is as follows:

    • the first auction uses a starting price based on the appraised value;
    • if the property is not sold, further auctions can be organised, with the starting price lowered to reflect market interest and legal thresholds; and
    • below certain limits, the law may restrict the possibility for certain creditors or parties to acquire the property at reduced prices in order to prevent abusive self-dealing.

    Because these thresholds may evolve and can be interpreted differently in practice, both creditors and bidders should check the up-to-date Code of Civil Procedure or obtain legal advice before relying on specific percentages. When in doubt, a conservative approach that assumes potential price reductions over multiple auctions is safer for planning purposes.

    8. Specific risks for buyers at judicial auctions

    Judicial auctions can offer attractive prices compared to ordinary market transactions, but they also carry specific legal and practical risks. Foreign buyers, in particular, should be aware of at least the following:

    • Risk of challenges to enforcement: if the debtor or a third party successfully challenges a key step in the enforcement, the auction and adjudication can in some cases be annulled. Buyers may then have to seek restitution of the price and could face delays and uncertainty.
    • Title defects and hidden issues: although enforced sales are meant to clean the property from certain encumbrances, issues may remain, such as unresolved boundary disputes, unregistered easements, planning breaches or informal occupation by tenants or family members.
    • Co-ownership complications: if the debtor owns only a share of the property, the auction may cover only that share, leaving the buyer in co-ownership with others. Co-owners have their own rights, including potential pre-emption or partition claims.
    • Insolvency interactions: where enforcement runs in parallel with insolvency, buyers must ensure that the sale has been authorised in accordance with insolvency law, otherwise they risk challenges from the insolvency estate or other creditors.
    • Tax and regulatory compliance: for certain types of property, such as agricultural land, forest land or heritage assets, additional regulations and pre-emption rights may apply. Buyers must verify and comply with these rules to avoid later annulment or additional financial obligations.

    9. How buyers can mitigate risk

    Despite these risks, judicial auctions remain a viable route for acquiring Romanian property, provided that buyers take adequate precautions. Common risk-mitigation measures include:

    • Legal due diligence: before bidding, buyers should review the land book, enforcement file (to the extent accessible), valuation report and any available court decisions. When possible, they should inspect the property physically.
    • Clear contractual documentation where allowed: although auctions follow formal procedures rather than negotiation, buyers can seek clarifications from the bailiff and, in some contexts, negotiate side agreements with the creditor or debtor to address practical issues (for example, vacating the property).
    • Insurance and financial planning: buyers should budget for taxes, registration fees and potential litigation costs. In some cases, specialised insurance products may be available to cover title risks.
    • Local partnerships: foreign buyers often work with local counsel and advisors familiar with enforcement practice, who can identify red flags early and suggest strategies to reduce exposure.

    Conclusion

    Forced sale and judicial auction of Romanian property to satisfy foreign judgments or debts is a multi-step process that combines international litigation strategy with domestic enforcement practice. Foreign creditors must:

    • transform their foreign judgment or arbitral award into a Romanian enforceable title through recognition or exequatur, unless an EU regime allows direct enforcement;
    • identify, attach and seize suitable Romanian real estate via conservatory measures and formal enforcement steps;
    • navigate the judicial auction process, including valuation, auction notices, bidding rules and distribution of proceeds; and
    • anticipate and manage litigation risks, debtor challenges and potential interactions with insolvency proceedings.

    For buyers at judicial auctions, the process can create opportunities to acquire Romanian property at competitive prices, but only if they carefully assess the legal and practical risks and use professional assistance to navigate the enforcement system. When approached with proper preparation and realistic expectations, judicial auctions in Romania can be an effective tool both for foreign creditors seeking recovery and for investors looking to enter or expand in the Romanian real estate market.

    Indicative sources and further reading