With a little common sense and a lot of luck you can own a dream house - if you keep your eyes very wide open
Buying real estate in Bulgaria can be a rewarding experience, and you can end up with a great house if you go about it sensibly. Unlike the UK Bulgaria doesn´t do buyer´s surveys. The Bulgarian way may be more laborious, but it usually works in the end.
Property laws used to change frequently but, since joining the EU, the Bulgarian system is beginning to conform with that of other member states.
You are obliged by Bulgarian law to have a notary deed, signed by everyone involved in the transaction, to legally own or build property.
If there are any burdens or claims on the property, the legality of the transaction can be challenged. Check with the local property registry and the local court that the seller is resident, or has his registered office in the area.
Undeveloped land may be either regulated, with a permit from the municipality, or non-regulated. Obtaining a construction permit can be an arduous task; utility companies should be informed, and the neighbours need to be notified and given the opportunity to object.
If you are buying land for development, you are often required to sign a legal management contract setting out your responsibilities for the upkeep of the internal roads, green spaces and other common areas. It may also state your duties in regard to holiday rentals, although rentals are usually handled by separate companies.
The only way non-EU nationals can buy land is through a registered Bulgarian company.
Until the end of 2011, unless they have a Bulgarian residency permit, EU citizens cannot acquire land for a second home, even if there is a second home already built on it. There is also a restriction until 2014 on the purchase of agricultural land and forests.
Make sure you buy through a locally registered company.
What to watch out for in preliminary contracts
The preliminary contract confirms the address, the relevant permissions and completion date. There should also be a valuation for tax purposes, and a receipt for taxes already paid.
Don´t sign without having seen the property first. You may have to pay a non-refundable deposit to secure your purchase, give you time to view it, and check if there are any problems with water, electricity, roads and the like. You retain the right to withdraw from the sale.
Surveys should be carried out by an independent expert. Bulgarian builders may be tempted to cut corners, especially now because of the economic crisis.
Never, ever, be pressurised into signing. If the seller can´t wait, just walk away. A Bulgarian language contract takes precedence over the English one, so a professional translation must be obtained and taken into account.
10 WAYS YOU CAN BE CHEATED
1. The property has already been sold.
2. It has an outstanding mortgage on it.
3. It is still under a rental agreement.
4. Someone has filed a claim in court that he is already the owner. For the above steps check the property register and ask for a certificate issued by the Register Agency.
5. There are claims on the property, usually over the land, that have not been resolved. Ask the municipality.
6. When the preliminary contract or the notary deed is signed by the owner´s representative, be careful that the power of attorney is not void.
7. The seller presents false documents. Get the originals and confirm their authenticity.
8. When the seller is a company, ask for the minutes of board or shareholder meetings to confirm the decision to sell is legal.
9. Newly-built property has not received planning permission. Ask the state agency that supervises construction supervision why.
10. It is still under construction. Check that the developer´s company is financially viable.
Duncan Wallace is an English solicitor based in Sofia. He has practised with central London solicitors and in the legal department of Grand Metropolitan PLC. He has also worked in Bahrain and in Athens with Zepos & Zepos, and was a consultant to the European Commission in Brussels and Luxembourg. He has lectured in Bulgaria at City University, where he was a member of faculty, and at the New Bulgarian, International and American universities. He holds Masters degrees in law from London University and Universite Libre de Bruxelles.
+359 894 207 805
Miroslav Dimitrov is an advocate, a member of the Sofia Bar Association, practises law in Sofia and is an assistant professor of civil law at the University of National and World Economy, Sofia.