On 8 August 2025, Government Emergency Ordinance no. 38/2025 amending and supplementing Law no. 165/2013 on measures for the finalization of the restitution process, in kind or by equivalent, of real estate abusively taken over during the communist regime in Romania (“G.E.O. no. 38/2025”), entered into force, having been published in the Official Gazette of Romania no. 746 of the same date.
In essence, the drafting of G.E.O. no. 38/2025 aimed at aligning Law no. 165/2013 with the rulings of the European Court of Human Rights in the Case Văleanu and Others v. Romania, and of the Constitutional Court of Romania expressed through Decision no. 43/2025.
The main novelty introduced by G.E.O. no. 38/2025 consists in establishing restitution by equivalent of the property, i.e., in the form of monetary compensation, closer to its current market value, an element conferring a considerable increase in the fairness of Law no. 165/2013.
The main amendments and additions brought to Law no. 165/2013 by G.E.O. no. 38/2025 are the following:
- in the case of restitution in kind of the property, the added value from which the property benefited after its abusive takeover by the communist regime will be acquired against payment, but only if such added value does not exceed 50% of the property’s value at the date of the abusive takeover;
- the added value will be established by subtracting the value of the property at the time of takeover;
- conversely, if such added value exceeds the 50% threshold, restitution in kind of the property shall no longer be possible, as it will be deemed that a new property has resulted compared to the one taken over by the communist regime (in which case the property will be restituted by equivalent in money);
- the evaluation of properties for which compensation is granted will be expressed in points and will be carried out not only by applying the notarial grid valid for the year preceding the issuance of the decision of the National Commission for Property Compensation, by reference to the zone and category of property in the locality, but also by applying the criteria set out in the annex newly introduced by G.E.O. no. 38/2025;
- in the case of transfer of rights recognized under the compensation decision (i.e., purchase of such rights), the acquirer will be entitled to a number of points equal to the sum of (i) the price paid to the former owner or his/her legal or testamentary heirs for the transaction of restitution points and (ii) a percentage of 15% of the difference up to the value of the acquired points;
- however, where the price paid by the acquirer cannot be determined, the acquirer will only be entitled to 15% of the value of the acquired points;
- if the holder of restitution points does not wish for restitution by equivalent of the property (i.e., cash restitution) to be made in equal annual installments over 7 consecutive years, under the general mechanism of Law no. 165/2013, he/she may opt for cashing out the points in a single installment: in this case, a single payment title will be issued for 40% of the amount of points established under the compensation decision or, as the case may be, of the points remaining to be cashed out;
- in the event that the holder of points opts for the general mechanism of Law no. 165/2013 in case of restitution by equivalent (i.e., restitution by equivalent of the property in equal annual installments over 7 consecutive years), the amounts of the sixth and seventh installments will be updated with the consumer price index for non-food goods for the period between the issuance of the payment title for the fifth installment and the last payment title.
From a technical perspective, we note that the provisions of G.E.O. no. 38/2025 aim to protect both private and public interests. These provisions (i) align Law no. 165/2013 with international and constitutional case law, (ii) bring compensation closer to the current market value of the property, (iii) discourage speculative activities involving the rights obtained under Law no. 165/2013, and (iv) safeguard certain legitimate budgetary interests of the Romanian State.
We express our hope that G.E.O. no. 38/2025 will make the process of restitution of properties abusively taken over by the communist regime more efficient and equitable, and we remain available to provide assistance in cases having this object.
