Facts about Bulgaria
With its upcoming EU membership, as well as its mountains, sea, spas and old world charm, Bulgaria is among the world’s hottest destinations for UK buyers. It is also one of 40 countries in which the Property Lawyers Abroad Network (PLAN) operates, which gives prospective purchasers peace of mind.
The legal process for property purchase is different from that experienced in the UK, explains Sevdalin Stamov, a Varna-based property lawyer who is a member of PLAN.
One example is fees. ‘Legal fees are negotiable,’ says Stamov. ‘Our fees are around 2.5 per cent but purchasers have reported lawyers charging three per cent and above on properties ranging in price from £15,000 to £90,000.’
The notion of vacant possession, in the sense buyers of UK property would recognise, doesn’t exist in Bulgaria. Instead, the vendors of the property usually remain in the property for one month before making way for the new owners.
The price of the property has also been known to be the subject of disagreement, he says. Unlike in the England and Wales, there can be a discrepancy based on ‘the difference between offered price, the purchase price on the Preliminary and the price on the Notary deeds. The developers are reluctant to transfer title on the full price, but usually on tax assessment which is lower.’ Buyers should be aware of this fact before embarking on a purchase, and if they insist on having the agreed purchase price written on the title deed this should be stated up-front.
Such All the more reason to seek representation you can trust. ‘It is always recommended that buyers hire an independent lawyer,’ says Stamov.
Foreign ownership of Bulgarian property is relatively new to Bulgaria. So how can buyers know that the purchase - and the funds they put into it – are safe? It all comes down to having trust in your legal representative, Stamov says. ‘Our clients trust us because the legal services we provide match up to the quality of service of the European law firms.’ The fact that all PLAN members are English-speaking is another crucial point.
The most important piece of advice for a UK buyer in Bulgaria? ‘Always use a lawyer with a considerable legal practice. Buyers have to be sure that he will act as their independent adviser and will defend only their interests. If possible, request all money for the transaction to be paid officially by the lawyer.’
For more information about PLAN visit plani.net
BULGARIA1/ Can you talk UK property buyers in Bulgaria through how the legal process works? What exactly should a lawyer be doing on their behalf?
The lawyer is in full contact with the client in the course of the whole conveyancing process. He acts on behalf of the buyer, taking his position as party of the transaction. The lawyer requests from the developer, from the agent or from the seller all legal documents that concern the purchase: title deeds, building licenses, copies of the building plans, building permissions, good standing certificates, preliminary contract etc. These documents are examined. The lawyer gives a statement to the buyer about the legal rights of the seller and his capability to transfer clear title to the buyer.
Later the lawyer checks the drafted notary deed or acts on clients’ behalf before the notary. Before signing the deed, the procedure above to check all documents is repeated.
When necessary the lawyer may negotiate with the seller some important conditions and terms which may have an effect on the transaction.
If authorized the lawyer may act before the Notary public and sign the notary deed on buyer’s behalf.
In other words – the lawyer provides full assistance in the conveyancing process. As lawyers, in most cases we act as ‘guarantors’ of the clients’ interests.
2/ How long should the legal process take?
It depends. Usually it lasts during the whole transaction till its completion. The most important part of it is 2-3 weeks in the beginning and a 1-2 week period at the end just before the notary transaction.
3/ What legal costs can buyers expect?
Sevdalin Stamov comments: ‘Legal fees are negotiable. Our fees are around 2.5 per cent but purchasers have reported lawyers charging 3 per cent and above on properties ranging in price from £15k - £90K.’
4/ What kind of legal problems can be unearthed in Bulgaria that prospective UK buyers should be aware of and that they might not come across in the UK? The difference between offered price, the purchase price on the Preliminary and the price on the Notary deeds. The developers are reluctant to transfer title on the full price, but usually on tax assessment which is lower.
5/ How do things differ for those buying in a new development or an existing property?
Practically the legal work does not differ substantially.
6/ Should buyers trust legal service offered by their developer or agent?
It is always recommended that buyers hire an independent lawyer.
7/ Is it safe to buy property in an emerging market such as Bulgaria where foreign buyers are a relatively new phenomenon?
It can be safe if buyers trust the lawyers they have appointed. Our clients trust us because the legal services we provide match up to the quality of service of the European law firms.
8/ Should buyers have concerns about buying in a developing country where highly unequal income distribution remains a pressing problem and where stories of crime are rife?
Sevdalin Stamov comments: ‘If this was the case then Bulgaria would not be one of the top property markets in Europe. Yes, there are crimes and some of the buyers express concerns about it when they visit Bulgaria. However, most of them leave feeling more comfortable and safe knowing that their interests are being taken care of by a credible, reliable and independent legal professional.
9/ Finally, what’s your most important piece of advice for UK property buyers in Bulgaria?
When buying property in Bulgaria always use a lawyer with a considerable legal practice. Buyers have to be sure that he will act as their independent advisor and will defend only their interests. If possible request all money for the transaction to be paid officially by the lawyer.