The period in which the Romanian fascist organization, the "Iron Guard" took over, was not very opportune for the function of cultural associations. Consequently, the actual leadership of nagybánya decided to confiscate the whole property of the school and the colony. The executive board of the town had the role of managing the Art School from that point on. A committee was appointed to work out the new rules of function. Every tenant was given notice to leave his atelier and all the former benefits were suspended.
The professors were forced to close down the school, but they brought their protest to the attention of the leaders of the town. Afterwards, turning to the Supreme Court, they appealed against the confiscation of the properties of the colony. The NPA (Nagybánya Painters' Association) won the trial at the reexamining forum in Kolozsvár. Naturally this was only an ethical victory, the actual returning of the confiscated goods was out of the question.
Being pushed by the circumstances, the dissolution of the NPA became inevitable in the July of 1937.
Gheorghe Manu, a high-school teacher, managed the new school. Sándor Ziffer was invited to be the new professor. The ceasing of the former legal continuity and the new administration brought the school into a final crisis. Both the professors and the pupils got separated from the international tendencies of European art.
In the next years a few experiments were undertaken in order to save the school. In 1937 evening courses were organized. Afterwards, the newborn Association of Artists took over the school.
After the decision in Vienna, the buildings of the colony were used as military barracks. After this period, and took over the leadership of the colony. The few remaining documents show a dysfunction of the school. Only a few disciples were living here in winter. The students of the Academy of Fine Arts in Budapest arrived here with scholarships in the summer. And a few artists returning because of some kind of nostalgia improve these statistics.