From paper to platform: the digital future of real estate lending in Romania

By Raluca Bita, Associate and Camelia Iantuc, Senior Associate from Filip & Company

1. Setting the stage for digital transformation

Romania’s banking and real estate sectors have long been defined by their reliance on paper-based processes, in person verifications, and a labyrinth of hard copy documentation. These sectors are now undergoing a profound transformation, due to high digitalization of services and the increasing demand for more transparency and efficiency. Still, some cornerstones of Romanian law, especially those related to aspects concerning mortgage matters, remain firmly anchored in tradition. The challenge ahead is to align innovation with legal certainty, without eroding the safeguards that underpin trust in financial and real estate transactions.

2. Lending in the digital market

The most visible progress has been in the lending market. Where once loan applications required multiple visits to bank branches, handwritten signatures, and weeks of waiting, digital platforms now offer an entirely different experience.

Today, eligibility checks regarding the creditworthiness of the borrower can be completed within minutes thanks to direct integration with the National Credit Bureau. Identity verification can be performed remotely through secure video identification, in accordance with a procedure that has been regulated in Romania by the Authority for the Digitalisation of Romania since 2021. 

The use of AI and the increased digitalization have also allowed for the development of automated credit scoring applications that speed up the credit granting process.

However, this transformation raises significant legal considerations. Automated decision-making in credit scoring relies on sensitive personal data, and lenders must comply strictly with the principles of transparency, proportionality, and lawful consent under the GDPR. Electronic signatures, recognised under the eIDAS European Union Regulation and Romanian law, have enabled most loan agreements to move online. However, their use must be backed by secure authentication measures and carefully drafted contractual clauses to ensure enforceability in court. 

3. The notary gate for immovable mortgages

When it comes to loans secured with mortgages over immovable property, the shift to digital reaches a firm legal boundary. Under the Civil Code, any mortgage on real estate must be executed in authentic form before a notary public.

This requirement is not simply bureaucratic; it is a requirement for the validity of the mortgage agreement. The notary verifies the identity and capacity of the parties, ensures the legality of the contract, and oversees its registration in the Land Book. Without this authentication, the mortgage is null and void, and it cannot be enforced against third parties.

At present, Romania does not allow remote notarial execution of such deeds. The parties, or their duly authorised representatives, must appear physically before the notary. 

Still, technology has transformed everything around this formal step. Preliminary credit agreements, unsecured loan agreements or those secured only with movable mortgages, and pre-contracts or reservation agreements in real estate can already be executed electronically. Thus, the notarial deed becomes the final anchor in an otherwise digitalised journey.

4. Real Estate transactions go digital

The real estate sector itself has embraced innovation. The National Agency for Cadastre and Land Registration now provides online access to property extracts, which has simplified the procedures before the execution of the relevant agreements. Proptech platforms allow buyers to explore virtual tours, while automated valuation algorithms and artificial intelligence support more accurate pricing and investment decisions. Draft contracts are exchanged securely online, enabling parties and their advisors to review documentation more efficiently than before.

Nevertheless, the transfer of ownership and any immovable mortgage remain tied to the notarial deed. The result is a hybrid model: digital tools accelerate preparation and negotiation, but tradition prevails at the moment of execution.

5. Tokenisation and Smart Contracts

More ambitious technological trends, such as tokenisation of real estate and the use of smart contracts, are also attracting attention. Tokenisation promises to divide property into digital units tradable on blockchain platforms, potentially increasing accessibility and liquidity in a traditionally illiquid asset class.

Yet Romanian law is not prepared to recognise blockchain records as substitutes for the authentic deeds required by the Civil Code. Ownership transfers and mortgages must still be registered in the Land Book, and token transfers do not meet this requirement.

Romania’s journey from paper to platform is undeniable. Credit approvals are faster, property due diligence is simpler, and digital investment opportunities are beginning to emerge. Yet one thing has not changed: the authenticity requirement for immovable mortgages and property transfers. Far from being a relic, the notarial deed remains an anchor of legality, enforceability, and public trust.

The future will not be defined by the replacement of notaries with algorithms, but by the creation of a hybrid system in which digital platforms enhance efficiency around the notarial moment, rather than bypass it. For lawyers, lenders, developers, and investors, the challenge is to design systems that embrace digital innovation while remaining faithful to the principles of legal certainty.