Bulgarian Law

Thinking about buying a property in Bulgaria? We talk to real-estate lawyer, Daniel Bratanov, about the buying process, corruption, the down-turn in world markets and how to avoid any pitfalls...

By Camilla Kaas Stock

Is it complicated to buy property in Bulgaria?

No, not really. It's pretty straightforward, especially if you are buying an apartment. It is a bit more complicated when you buy a house. At the moment, a foreigner is not allowed to own land, so to buy a property with land, you need to set up a company to hold the deeds for you. This isn't really a problem and your lawyer can sort this out for you reasonably quickly.
There is talk of this being changed in the near future, but no one knows exactly when. I also want to point out that since 1st March 2008, all companies have to be registered, like in the UK. So, if you own Bulgarian land, it is very important that you do this. The process is supposed to take three weeks, but it doesn't run very smoothly and is currently taking more like two months, or even longer.

What must you watch out for when buying a property in Bulgaria?

Well, in the past there have been a lot of problems with developers building without permission. This has improved over the last couple of years, but it is still very important to use a reputable estate agent who can guide you towards the good developers and help you avoid the bad ones.

What about safety regulations? Are the standards here good enough?

Every year the building regulations become stricter. An architect from the municipality will now check the development during the building process to make sure it meets all safety and quality standards, and gives the final papers of approval at the end. The government is also more concerned now with preventing over-development but, as this brings in a lot of money, it is sometimes hard for them to say no.

Is there still a lot of corruption in Bulgaria?

Yes, but the EU is clamping down on it and now the government has been warned to sort out all the corruption. They are working on it, but it isn't an easy problem to solve. It has been like this for almost fifty years and will not go away overnight.

Have you got any specific advice for people who choose to buy off-plan properties?

When you buy off-plan, you sign a preliminary contract so it is very important to use a good solicitor who can check out the validity of the paper work. Ask questions such as does the developer have planning permission and does he own the land? Also, it's a good idea to have a look at other properties that the developer has built, just to make sure the standard of work is good.
If you buy an apartment or house from a developer, the developer will still own the land. This can be an advantage for the buyer, because the developer will then be in charge of the maintenance, although you will have to pay for it, of course.

What about language difficulties?

Usually the contract is drawn up in two languages, so that the client will be able to read the papers before signing them. However, the title deeds, which you will get at the very end of the process (when the property is ready for you to take possession), will be in Bulgarian.

What sorts of costs are involved when you buy a property?

You have to pay three per cent of the declared value of the property to the Notary; about 100 leva to other institutions; 30-40 leva per hour for the translation and between three to seven per cent commission to the estate agent, as well as your solicitor's fees. You also need to pay government taxes when you purchase a property, which is about 200 euro. Later you will have to pay council taxes, but this isn't very much, only 50 euro per year.

You also own an estate agency, so do you think Bulgaria will be affected by the down-turn in the global market economy?

Of course, this is going to affect us to. A big percentage of the buyers here are British, so whatever happens to the UK housing market will have an impact. We are currently getting a lot of Russian buyers, but if they drop out, the market will definitely go down. At the same time, prices are rising because building expenses are going up and there are now more and more Bulgarians buying, a trend which is likely to continue.

Daniel Bratanov (36) studied law at the Free University in Bourgas and specializes in common and real-estate law. He worked for Sunny Beach JSC a government company that dealt with the land around Sunny Beach before it was privatised and sold to developers. In 2005, he started his own real-estate agency, Invest Ltd, with offices in Sunny Beach and Bourgas.