Undeclared Rents in Romania: Fines, CASS and Imprisonment

Renting a property without a written contract is still a frequent practice in Romania, but the consequences can be far more costly than landlords expect. From contravention fines of thousands of lei to tax evasion charges with sentences of up to 15 years in prison, the risks are real and increasingly severely sanctioned. In this article, we explain exactly what a landlord risks when renting "under the table", with references to legislation in force in September 2026, and why a professional contract is an investment, not an expense.

Fines and tax sanctions: what Romanian law says

The first direct consequence of renting without a contract is a contravention fine. According to art. 336 para. (1) lit. b) of Law no. 207/2015 (Tax Procedure Code), failure to declare taxable income on time constitutes a contravention. The sanction, provided for in art. 336 para. (2) lit. d), is a fine between 500 and 1,000 lei for individuals.

This may seem like a manageable sum, but it is only the tip of the iceberg. In addition to the fine, tax authorities may impose tax obligations ex officio, according to art. 107 of the Tax Procedure Code. This means recalculating taxes owed on undeclared income, to which are added late payment penalties of 0.01% per day and interest of 0.02% per day - amounts that grow constantly with each month of non-payment.

These percentages (interest 0.02%/day according to art. 174 para. (5), late payment penalty 0.01%/day according to art. 176 of the Tax Procedure Code) are those in force in September 2026. They have not been modified by recent ordinances affecting the Tax Procedure Code (for example OUG no. 71/2025 on crypto-asset reporting), which do not affect rental income. Always check the updated version on legislatie.just.ro.

In addition to the fine and accessories, the landlord does not pay health insurance contributions (CASS) on undeclared income. For rental income, CASS is due only if the net annual income from all non-salary sources (rents, dividends, interest) exceeds 6 minimum gross salaries in the economy - that is 24,300 lei in 2026, calculated at the minimum gross salary of 4,050 lei valid on 1 January 2026 (CASS thresholds are set at the beginning of the year and do not change with the minimum salary increase to 4,325 lei from 1 July 2026). Above this threshold, CASS is paid in a fixed amount: 2,430 lei up to 48,600 lei net income, 4,860 lei up to 97,200 lei, and 9,720 lei above this last ceiling.

And in serious cases - when undeclared amounts are significant - the landlord risks being charged with tax evasion. According to art. 9 para. (1) of Law no. 241/2005, amended by Law no. 126/2024 (M.Of. no. 437/13.05.2024), omission of recording realized income is punished with imprisonment from 3 to 10 years and deprivation of certain rights, or with a fine. If the damage exceeds 500,000 EUR, the sentence limits are increased by 3 years (i.e. 6-13 years), and above 1,000,000 EUR they are increased by 5 years (i.e. 8-15 years).

Important note: Law 126/2024 significantly increased penalties compared to the previous regulation, precisely to discourage tax evasion. The same law also introduced new offences (art. 9² and art. 9³) and gave DNA jurisdiction over tax evasion cases with damage exceeding 10 million lei, regardless of the number of concurrent offences.

Evicting a tenant becomes a nightmare without a contract

Another major risk that many landlords ignore is the difficulty of evicting a problematic tenant. Without a written contract that functions as an enforcement title, eviction cannot be done simply.

According to art. 1798 of the Civil Code (Law no. 287/2009), rental contracts concluded by private deed that have been registered with the tax authorities constitute enforcement titles for the payment of rent. Without this registered contract, the landlord must go to court, and the process can take months.

To prove the existence of the rental relationship in court, the landlord must present alternative evidence: messages, receipts, bank statements or witnesses. All of these are much more fragile than a written contract.

Recovery of outstanding rent is also difficult - without a contract that clearly establishes the amount owed and payment terms, the court may interpret the parties' obligations differently.

How does it work in other European countries?

The general trend in Europe is clear: protection of tenants and formalization of rental relationships. Romania is increasingly aligning with these standards.

• Germany - Rental legislation is regulated by the Bürgerliches Gesetzbuch (BGB), especially sections on rental contracts. Eviction without a court order is illegal - the landlord must obtain an enforcement title from the Amtsgericht (local court), and enforcement is done exclusively by the Gerichtsvollzieher (court bailiff). Tenants benefit from notice periods of 3-9 months, and the landlord can terminate the contract only for "legitimate interest" - personal need (Eigenbedarf) or non-payment of rent for at least 2 months.
• Italy - According to Law no. 431/1998, art. 13, the landlord is obliged to register the rental contract within 30 days of signing. The Cedolare Secca tax regime offers a flat tax rate of 21% (or 10% for regulated rents, "canone concordato"). Non-registration of the contract attracts severe tax consequences.
• France - ALUR Law (Law no. 2014-366) and ELAN Law (2018) strictly regulate the landlord-tenant relationship. Eviction without a court order is illegal, and during the winter period (1 November - 31 March) a winter truce operates that prohibits any eviction.
• Spain - Ley de Arrendamientos Urbanos (LAU) provides tenants with minimum contracts of 5 years (7 years for legal entities) and limits on rent increases. Eviction is done exclusively through the courts.
• United Kingdom - Even verbal rental agreements provide tenants with legal protection. The Housing Act 1988 and recent reforms (Renters' Reform Bill 2023-2024) have eliminated "no-fault" evictions and impose strict procedures.

Why a professional contract protects you as a landlord

A well-drafted rental agreement is not just a formality - it is an insurance policy:

• Tax protection - Declaring income completely eliminates the risk of fines, penalties and tax evasion charges. According to the Tax Code, income tax on rental income is 10% applied on net income, after a flat deduction of 20% (in force from 2025, Law no. 141/2025), which means a real tax cost of 8% of gross rent, to which CASS can be added if net annual income from all non-salary sources exceeds 24,300 lei.
• Fast eviction - With a contract registered at ANAF (enforceable title under art. 1798 Civil Code), eviction is carried out without trial, directly by the court executor.
• Rent guarantee - The contract clearly establishes the monthly amount, the guarantee (usually 2-3 months), late payment penalties and termination conditions.
• Legal compliance - Compliance with Law 114/1996 (Housing Law, art. 21), the Tax Code and OUG 128/2024 protects you from any ANAF inspection.

What a correct rental agreement must contain

According to art. 21 of Law no. 114/1996 (Housing Law), a rental agreement must include:

• Details of the parties - landlord and tenant, with ID number and identification data
• Address of the property being rented
• Living area and facilities used exclusively and in common
• Monthly rent - amount, rules for modification, payment method
• Guarantee - amount, conditions for return (according to OUG 40/1999, art. 38)
• Contract duration - start date, term, renewal conditions
• Maintenance obligations - what is the landlord's responsibility and what is the tenant's
• Inventory of goods - detailed list with the condition of each item
• Termination conditions - notice period, reasons for early termination

The contract must be registered at ANAF within 30 days, using form C168, according to art. 83 para. (6) of the Tax Code, introduced by OUG no. 128/2024. Income is then declared through the Unique Declaration (form 212), which is filed by May 25 of the following year.

Conclusion: It's not worth the risk

Renting "under the table" may seem like a short-term saving, but the risks far outweigh the apparent benefits. A fine of 500-1,000 lei for non-declaration is nothing compared to cumulative tax penalties, outstanding CASS, eviction court costs or, in the worst case, a criminal conviction of up to 15 years.

A professional contract, correct tax declaration and professional property management are the best investments you can make as a landlord.

Are you a landlord in Sibiu and want to rent your property professionally, without hassle? The Vianto Properties team handles everything: from contract and ANAF registration to finding the right tenant and property management.

📞 Contact us for free consultation

🌐 viantoproperties.ro

Legislative references

Romanian legislation:

• Law no. 207/2015 - Tax Procedure Code, art. 336 para. (1) lit. b) + para. (2) lit. d) - administrative fine 500-1,000 lei for individuals who do not declare taxable income on time; art. 174 para. (5) - interest 0.02%/day; art. 176 - late payment penalty 0.01%/day (legislatie.just.ro, lege5.ro, verified September 2026)
• Law no. 241/2005 - Prevention and combating tax evasion, art. 9 para. (1) - tax evasion offences, 3-10 years imprisonment, as amended by Law 126/2024 (legislatie.just.ro)
• Law no. 126/2024 - Strengthening the capacity to combat tax evasion (Official Gazette no. 437/13.05.2024) - art. 9 para. (2): increase by 3 years for damage over 500,000 EUR; art. 9 para. (3): increase by 5 years for damage over 1,000,000 EUR; DNA jurisdiction from 10 million lei damage (static.anaf.ro - Tax Evasion Brochure, lawpedia.legal)
• Law no. 287/2009 - Civil Code, art. 1777 (definition of lease), art. 1798 (registered contract = enforceable title for rent payment)
• Law no. 114/1996 - Housing Law, art. 21 - obligation of written contract and mandatory minimum content
• OUG no. 40/1999 - Protection of tenants, art. 38 - conditions regarding the guarantee
• OUG no. 128/2024 - Amendment to the Tax Code - rules for registering contracts at ANAF from 1 January 2025, art. 83 para. (6) - 30-day deadline, form C168 (renzi.ro, avocatnet.ro)
• Law no. 141/2025 - flat deduction for rental income reduced to 20% of gross income, in force from 2025 and maintained in 2026 (inchirieriportal.ro, monitorfiscal.ro)
• Tax Code - taxation of rental income: 10% on net income (gross income minus flat deduction of 20%); CASS in fixed amount over 6 annual minimum gross salaries, according to ceilings in the Tax Code, with reference to the minimum gross salary of 4,050 lei valid on 1 January 2026 (HG 146/2026, monitorfiscal.ro, rentico.ro)

European legislation:

• Germany - Bürgerliches Gesetzbuch (BGB), sections on lease; Mietrechtsreformgesetz (2001) - eviction exclusively by court (Räumungsklage) (rav.de)
• Italy - Law no. 431/1998, art. 13 - mandatory contract registration; Cedolare Secca 21%/10% (luxuryvillaitaly.com)
• France - ALUR Law (Law no. 2014-366) and ELAN Law (2018) - tenant protection, winter truce
• Spain - Urban Leases Act (LAU) - minimum 5-year contract, eviction only through court
• United Kingdom - Housing Act 1988; Renters' Reform Bill (2023-2024) - elimination of „no-fault” eviction

Frequently Asked Questions

What penalties apply if you don't declare rental income to ANAF?

Failure to declare rental income on time is sanctioned, according to art. 336 of the Tax Procedure Code, with a fine between 500 and 1,000 lei for individuals. In addition to the fine, ANAF recalculates the tax owed and applies interest of 0.02% per day and late payment penalty of 0.01% per day for amounts not paid on time.

When must the rental contract be registered with ANAF?

The contract must be registered within 30 days of signing, according to art. 83 para. (6) of the Tax Code, introduced by OUG 128/2024. Registration is done online, from the Private Virtual Space, using form C168, or at the local tax administration office.

What documents do you need to register the contract with ANAF?

The rental contract signed by both parties and the completed form C168. It's good to have on hand a copy of the property deed and the owner's ID; exact requirements may vary from one tax administration to another.

How do you declare tax on rental income?

The 10% tax applies to net income, after a flat 20% deduction from gross income (in effect from 2025, according to Law 141/2025), so the actual tax cost is 8% of gross rent. Declaration is made annually, through the Unique Declaration (form 212), by 25 May of the following year. If the annual net income from rentals and other sources outside salary exceeds 24,300 lei (6 minimum gross salaries as of 1 January 2026), CASS is also due, in a fixed amount.

Can the tenant register the contract with ANAF?

No. The obligation to register rests exclusively with the owner. The tenant may request a copy of the registered contract, for example as proof of residence.