Legals
We at Jood Investments Ltd have enlisted the services of the following highly reputable English speaking Bulgarian solicitor Vladimir Ivanov to act on your behalf purchasing your property in Bulgaria. We have negotiated a basic cost for his services of 1% of the purchase price, on average saving you £200 - £300. You are obviously welcome to use an independent solicitor to act on your behalf but the cost is likely to be higher and you may find that this will also slow down the buying process. Please find below legal notes to be taken into account when purchasing your property in Bulgaria.
PROPERTY PURCHASE PROCESS IN BULGARIA
The normal process for the purchase of real estate in Bulgaria normally works in the following way :
1. You choose a property and you pay a reservation fee in order to secure it. In most of the cases, you will be given 3-5 weeks until you sign preliminary contract for the real estate and you make first payment. At this stage, it is highly advisable that you appoint a lawyer to act on your behalf, complete all checks and provide you with independent and professional legal advice – concerning all permissions, clauses in the contracts and any potential risks to consider.
2. On instructing our lawyers to commence work on the legal advice and support for any form of real estate work, we undertake to carry out a full range of legal services and assistance. In the majority of cases, our clients should receive an initial response from our lawyers within 48 hours of them being formally instructed.
3. The typical legal work carried out by our company starts with checking and reviewing of all legal documents for ownership of the property, the right of construction and investigation of the Seller’s company for insolvency or any court injunctions. We carry out our checks and verification in order to be assured that all the documents are issued by the competent authority. As per the Bulgarian law there are several important documents that we shall check, including:
• Title deeds for the land
• Plan/sketch of the plot
• Planning permission
• Building permit
• Architectural design of the building
• Official Protocol for the building line and opening of the construction works
• Court registration and certificate of incorporation and validity of the company
• Tax and Statistic number of the development company
• Certificate of no tax liabilities for the company
• All other specific legal documents related to your project (these may vary)
The usual duration for completion of the above checks is between 3 and 4 weeks, depending on the speed of reply from the developer in question.
4. After the document checks, the developer sends us their proposed Preliminary contract. Our lawyers review the contract taking into consideration all necessary legal requirements and stipulations, according to Art 19 (3) of the Obligations Law and the other relevant Bulgarian laws governing the preliminary sales. We make suggestions to the developer, concerning the appropriateness of the contract with respect to each party. Our lawyers ensure the inclusion of all necessary legal clauses, required for a preliminary contract. We send the Developer the amended Preliminary contract and negotiate on the new clauses and conditions.
5. On reaching an agreement with the developer, we send our clients an approved Preliminary contract and Lawyer’s report, which is our professional opinion of the deal. Within the Lawyer’s report, our lawyers inform the client of the completed work, regarding the Preliminary contract and the legal documents relating to the deal. If everything looks accurate, complete and authentic, we advise our clients to sign the contract. If we feel that there are issues that are still outstanding, we notify the client of any eventual risks that they may face in signing the contract.
6. Either the developer or our Law office, will then undertake to send the client the two identical copies of the contracts, which the client must sign, returning one of the copies by post to the developer.
7. Upon signing the Preliminary contract, the client undertakes to make a series of stage payments as the construction process progresses. In compliance with the effective Bulgarian law, the completion of the different stages of the construction works is accompanied by the issue of official documents. The most important document on starting an off-plan development is the Building Permission, which gives the developer the right to construct. The first stage of the construction works is construction of the building foundations. Upon finishing each floor, the developer is issued official protocol, regarding the quality and the safety of the constructions. When the last floor is built, the developer is issued Act 14, which means that the building is at the stage of “rough construction” and it has enclosed walls and roof. The last stage of the construction process is the issue of Act 16 and the permit for use, which are respectively bound with the execution of the finishing works and taking the possession of the property.
Our lawyers observe and confirm the client that the Developer has fulfilled his obligations regarding the completion of the relevant stage and it is safe enough for him to transfer the due payment.
8. Once the property has been constructed (or in the case of a resale property) the Final contract / The Notary Deed should be signed. This is the document transferring the right of ownership (title) to the Buyer. Our lawyers will assist the client in the preparation of the Notary Deed. In addition, we will carry out investigations for any outstanding debt and other liabilities that might attach to land or buildings contained within the contract. As per the Bulgarian law, the final contract shall be signed in front of the Notary Public, in the region that the property is located. At the date of performing of the transaction, the client will pay 3% Notary and state taxes due, based on the sale price – a legal requirement for notary fees and tax on acquiring a property in Bulgaria.
Our clients can authorise our lawyers by Power of Attorney to represent them in front of the Notary Public for signing of the Notary Deed. Drafting a Power of Attorney and legal representation on the date of signing the Notary Deed in the Notary Public will incur extra cost to the amount of 300 EUR. There are three options for certifying the Power of Attorney: before a Bulgarian notary; before the Bulgarian Embassy/Consulate; or using the terms of the apostille procedure:
9. Upon acquiring a property in Bulgaria and after signing the Deed before the Notary Public, the client has two obligations: to register the property under the terms of Register BULSTAT and The Local Taxes and Fees Act. Our lawyers can provide you these additional services against extra fee of 100 Euros for BULSTAT registrar and 100 Euros for the initial tax registration.
Should you have any further questions, on the Buying Process in Bulgaria please feel free to contact Mr. Vladimir Ivanov, Attorney-at-Law.
Sincerely yours,
Vladimir Ivanov
Attorney-at-Law
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