New Regulation | Handover of works and equipment /Construction

Government Decision no. 343/2017 approved the new Regulation for the handover of construction works and related equipment (the ”Regulation”) and entered into force on 29 July 2017, thus replacing the old regulation that has been in force since 1994.

In this following article, we will endeavour to present the new elements in the handover process of construction works as set out by the Regulation. Please note this article does not provide an exhaustive presentation of the entire handover procedure covered by the Regulation and focuses on the most important differences between the former and the current legal regime.

Transitional provisions

Transitional provisions are essential to ensure a smooth transition from the old regulation (initially approved by Government Decision no. 273/1994) to the Regulation approved now by Government Decision no. 343/2017. Therefore, it clearly states that ongoing handover procedures shall follow the old legal regime under which they were started. This refers to both the handover upon finalization of the works, as well as the final handover (taking place after the warranty period lapses).

However, there is one exception - when the committee recommended the handover upon finalization of the works but had objections and such objections were not remedied until the entry into force of the Regulation, then the final handover shall be carried out according to the Regulation. Nonconformities that were signalled and not remedied until the lapse of the warranty period determine the stay of the final handover of the works, according to Art. 28 from the Regulation.

Handover of a part of the construction

Perhaps the most interesting change brought by the Regulation is that the handover procedure can now be applied to separate parts, elements or sectors of a construction, if these are independent and distinct physically and functionally. By expressly providing partial handover as an option to investors and contractors, the Regulation is aligned with the provisions of the Construction Law no. 50/1991.

Deadline for handover notification

Another positive change is that the Regulation expressly states that the contractor should notify the investor (n.b. the beneficiary of the works) on the finalization of the works within the validity period of the building permit. Discussions on this topic have previously circulated in the market and we welcome the fact that is has now been clarified.

Although the above-mentioned clarification is welcomed, the Regulation is still silent on whether the reception should also be finalized within the validity period of the building permit (and not only the notification on the finalisation of the works).

Committee members

The handover committee consists in the following members:

  • a representative of the investor, who acts as committee chairman;
  • a representative from the public authority issuant of the building / demolition permit. This differs from the previous regulation which stated that the representative belonged to the public authority where the construction was located;
  • between 1 and 3 specialists in various fields related to the construction works to be handed over, other than those involved in the design / execution of the construction works.

The committee must be also comprised of the following members, depending on the type of works carried out:

  • a representative from the State Inspectorate in Construction, depending on the class of construction (A, B and C are mentioned) and the financing source;
  • a representative from the State Inspectorate for Emergency Situations, for constructions that fall under the application of Law no. 307/2006 for fire defence;
  • a representative from the Department of Culture for constructions which are historical monuments;
  • a representative from the main credit release authority for certain class of construction financed entirely or partially from public funds.

The site supervisor is not part of the handover committee, whereas the presence of representatives from the contractor and the designer is mandatory, but only as guests.

Committee decision and veto right

The decision of the handover committee must be taken by the majority of its members. In the event of dissents amongst the members, the decision of the representative from the public authority issuant of the building / demolition permit prevails.

The above-mentioned majority rule does not apply when the committee is comprised of one or more of the special representatives from the public authority issuant of the building / demolition permit, from the State Inspectorate for Emergency Situations, from the Department of Culture or from the State Inspectorate in Construction. Such members have an absolute veto right, meaning that irrespective of the decision of the other members, the handover shall be rejected if this is the decision of the special member.

Finalisation date

Within 3 days from the issuance of a decision by the handover committee, the investor approves the acceptance or rejection of the handover by signing the handover minutes upon finalization of the works. This is the date when the handover procedure is considered to be finalized and this is also the moment when the warranty period set out by the construction agreement starts.

After the handover minutes are signed, the investor cannot request any remedy of snags, contractual penalties, value reduction or similar aspects, other than those recorded in the minutes. The only exception relates to the discovery of hidden defects discovered within the legal period, as well as defects to the structure of the construction originating from breaches of design and execution regulations, discovered during the entire existence of the construction.

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Publishing date: 08.08.2017

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