Following a recent decision by the Romanian Supreme Court issued in 2007, Romanian secured transactions involving mortgage agreements require additional formalities to be observed when mortgagors approve the mortgage agreements. Such additional formalities are of particular interest for secured lenders since mortgage agreements that are completed without complying may now be viewed by the courts as null and void. Despite Romanian case law not being binding on other courts, the Supreme Court’s case law is taken into consideration by other courts when assessing similar cases.
As we will present below, the recent decision of the Supreme Court changes the previous jurisprudence and affects the way banks and law firms will have to deal with Romanian secured transactions involving mortgage agreements. In short, for better protection of their interests, the banks should require the mortgagors, when approving the mortgage agreements, to issue notarised, authenticated resolutions (and apostiled, if issued in a country in which the official documents need to have an apostile in order to be presented in Romania).
