Rental agreements “off the books” – risks for landlords and tenants
- Avocat
- May 27
- 6 min read
The real estate market in Romania has seen significant growth in recent decades, and renting homes has become a common practice, both for young people who do not want to take out long-term mortgage loans and for landlords who see renting as a stable source of income. However, a significant percentage of rental contracts are not registered with ANAF, and in some cases, they are not even concluded in written form.
Renting a home without a written contract and registration with ANAF remains a common practice in Romania, despite the legal, financial, and personal risks it entails for both parties. Although at first glance it may seem like a “simpler” or “more flexible” solution, in reality, renting “off the books” hides a series of traps that can lead to serious problems, including hefty fines, court disputes, or even criminal complaints.
This article aims to clarify what renting “off the books” means, what the consequences are for landlords and tenants, and how such situations can be avoided through a legally sound approach.
1. How is a rental agreement legally concluded?
The rental agreement must be in written form
According to Articles 1777 and following of the Civil Code, any lease (rental) contract must be concluded in writing in order to produce clear legal effects between the parties.
A written rental contract should include certain mandatory minimum elements, such as:
the parties’ details;
a description of the property;
the duration of the contract;
the rent amount and payment method;
the rights and obligations of each party;
the deposit and conditions for its return;
the signatures of both parties.
The rental agreement must be registered with ANAF by the landlord.
According to Article 83 of the Fiscal Code:
(1) Taxpayers who earn income individually or in a form of association from independent activities, the use of goods, agricultural, forestry, or fishery activities, and who are taxed based on actual income, are required to submit a statement regarding estimated income/income norm by 25 May of the tax year.
(2) The estimated income/income norm statement must also be submitted by taxpayers who begin an activity during the tax year, within 30 days from the date the activity begins.
Therefore, individuals who earn income from the use of goods (e.g., rent) are required to declare the rental agreement to ANAF within 30 days of signing it.
This is a fiscal obligation of the landlord, not the tenant. The relevant tax form and a copy of the contract must be submitted.
2. What does renting “off the books” mean?
The law requires landlords to declare rental agreements to ANAF within 30 days of signing, and rental income is subject to taxation. Additionally, landlords whose rental income exceeds certain thresholds (6, 12, or 24 gross minimum wages) are also required to pay health insurance contributions (CASS).
“Renting off the books” refers to a situation where someone rents out a property (usually a home) without:
A written and signed rental contract, and/or
Registering the contract with ANAF, as required by fiscal obligations under the Fiscal Code (Articles 82 and 83).
In such situations, there is usually no clear evidence of the contractual relationship. The parties rely on verbal agreements, possibly WhatsApp messages or cash payments without receipts or bank statements.
3. Why do some landlords/tenants choose to conclude rental contracts “off the books”?
There are several reasons landlords and tenants invoke to avoid a written contract or fiscal registration:
To avoid paying taxes by the landlord (10% of the net income);
To maintain flexibility (easy exit from the “agreement”);
To reduce costs (some tenants ask for lower rent if it’s “off the books”);
To avoid declaring income for social benefits or loan eligibility;
Out of negligence or lack of knowledge of the law.
However, these reasons do not justify the risks involved and are not supported by legal provisions. In fact, the most serious legal consequences of rental agreements usually arise precisely when a conflict occurs and neither party benefits from the protection of the law, as the contract did not follow the required formalities.
4. Risks associated with “off the books” rental contracts
Risks for landlords
Fines from ANAF for failing to declare the contract
According to the Fiscal Procedure Code, landlords who do not declare rental income can be fined, and ANAF can calculate retroactive taxes for the past 5 years, including interest and penalties.
ANAF can investigate the situation in several ways:
through anonymous or direct reports;
via automatically generated notifications from databases (e.g., if a landlord owns properties but declares no rental income);
following other investigations (e.g., tenant’s social declarations, litigation, etc.).
Risk of income reclassification
If the landlord rents out multiple properties, ANAF may classify the activity as an economic one and require registration as a self-employed person (PFA) or even as a VAT payer, with significant tax consequences.
Inability to legally evict the tenant
Without a written rental agreement legally registered with ANAF (or notarized), evicting a tenant can become extremely difficult. The court will require proof of the contractual relationship and the grounds for the tenant’s occupation. In the absence of a signed contract, the landlord may have to go through long and costly procedures.
Without a professionally drafted rental contract, a tenant who stops paying rent and refuses to leave may remain in the property for months or even years if the landlord has not fulfilled all the formal requirements.
This situation arises because landlords are not allowed to proceed with forced eviction (e.g., changing the lock, removing belongings, cutting off utilities) without a court decision.
According to the Civil Code, art. 2495 and the following, eviction is only possible by court decision, obtained through a special legal action. This is a relatively quick procedure, but mandatory to evict a (former) tenant.
A landlord who bypasses the legal procedure and forcibly removes the tenant faces real risks, including criminal ones:
may be accused of unlawful entry (art. 224 Criminal Code – a criminal offence);
may be sued for moral and material damages;
if the landlord throws out or destroys the tenant’s belongings, they may be accused of theft or destruction of property.
Exceptions from the eviction procedure may occur if the person claiming to be a tenant has no right to be there (e.g., entered without the landlord’s consent). In this case, the landlord may file a criminal complaint for unlawful entry, allowing the police to confirm the illegal presence and potentially simplify the eviction process.
Inability to claim damages
Without a written rental agreement, the landlord cannot legally claim unpaid rent, damages for property destruction, utility costs, or penalties for breached obligations normally held by tenants.
Risk of civil or criminal complaints from the tenant
In extreme cases, tenants may accuse landlords of abuse (e.g., unlawful entry, poor living conditions, invasion of privacy) and initiate legal action. Without a legally signed and registered rental contract, the landlord’s legal position is weak.
Risks for tenants
Lack of any legal protection
Without a rental agreement, the tenant cannot prove they have the right to live in the property. The landlord may evict them at any time, without notice or with very short notice, or arbitrarily change the terms (increase the rent, impose restrictions, etc.). In extreme cases, the landlord might even file criminal complaints – for example, for unlawful occupation of property.
Inability to register domicile or residence
To obtain an identity card, passport, residency, or to enroll children in school, proof of domicile is required – which implies having a registered rental contract. Without a written agreement, the tenant may face serious administrative issues.
Inability to access social benefits, scholarships, or loans
If the tenant cannot prove they have a legal rental agreement, they may not be able to:
prove housing costs for scholarships or aid;
demonstrate stability for obtaining loans or financing;
justify an address for registration in various government programs.
Risk of forced and abusive eviction
Without legal protection, tenants may be threatened, forced to leave without notice, or subjected to pressure: utility cuts, lock changes, refusal to carry out repairs, etc.
Lack of proof for payments made
If rent is paid in cash and there are no receipts or bank records, the tenant cannot prove they paid the rent. In case of a dispute, they could be accused of failing to fulfill their payment obligations.
5. Solutions and recommendations
For landlords:
Always sign a written contract, even if it may seem “unnecessary.”
Register the lease contract with ANAF – the procedure is simple and offers tax protection.
Avoid verbal agreements or accepting cash payments without proof.
Include clear clauses regarding rent payment, the security deposit, and repairs.
For tenants:
Request a written contract, especially if you need proof of residence.
Avoid cash payments without a receipt – ask for a bank transfer or signed document.
Check whether the landlord has declared the contract – you can request a stamped copy from ANAF.
6. Conclusions
“Off the books” rentals are a risky practice for both parties. Although it may seem like a simpler or “unofficial” solution, in reality, it opens the door to serious legal issues: fines, disputes, abusive evictions, and lack of legal protection.
That’s why signing a written contract and registering it with ANAF are not just legal obligations, but also safety guarantees that ensure balance and fairness for both parties.
So, if you’re planning to rent out or move into a property, consult a lawyer or order a professional contract template that you can register with ANAF. A well-drafted contract costs far less than a lawsuit.
Comments