Your Partner in Bulgaria.

Bulgarian courts should accepts/send papers online

This week we have achieved a small victory. We are representatives of a client on a case, heard in Stara Zagora District Court. We have asked the judge to send by email copies of the latest hearing minutes. The judge refused, grounding her decision with “the court doesn’t have that practice”. We’ll that was not quite true. Art. 42 para 4 of the Civil Proceedings Code allows the court to send notices and subpoenas by email. We claimed that the court can use that to send copies of court documents too.

We have lodged an application to the Chairperson of Stara Zagora District Court, requesting the Chairman to “create such practice”. The court Chairperson accepted our arguments and ordered the judge to apply directly the aforesaid article. Yesterday we have received the requested documents by email.

I’m writing about this since that a major breakthrough in how the Bulgarian court operates. As I’ve said before, one of the major reasons of why lawsuits  take so long to be tried is the notice/subpoena problem. Electronic means solve this problem, but the the judges are reluctant to use them. There’s no explanation why.

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Top ways Varna property agents use to scam foreign buyers

In our lawyer practice in Varna, we have discovered several ways, used by the property agents and developers to deceive the buyers. You should look for such signs in the preliminary actions of the seller/agent and that should ring the bell for you.

First method

If the agent asks you to open a bank account on your/your company name and require you to transfer the purchase price/installments for the property there. Along with that they ask you to issue a power of attorney to their employee who would have the right to withdraw money from your account.

Reason for doing this: The agent/seller wants to cut the payment trail towards them. If there is no direct payment to their accounts they can claim that they haven’t received the money for the purchase and thus keep the money and not transfer the property to the buyer. Of course they will do anything not to issue a receipt to you. If the seller/agent have used that way to scam the buyer, it is difficult to  get the payment trail, but it not impossible. The legal way to recover the payment trail is your lawyer to get information from the bank about the persons, who had the right to withdraw the monies and the apropriate documents as evidence.

Second method

Using the agent as payment intermediary is the second scam method used by sellers in Varna region. The agent asks you to transfer the payment amount to their account and they promise/oblige to re-transfer the monies to the seller upon certain event.

Reason for doing this: Again, the seller/agent wants to cut the payment trail. If you don’t have a clear payment trail the it would be difficult to prove payment to the seller. The way to solve the consequences of this action is to summon both agent/seller in to the court hearing and force both of them to testify where are the money currently – is it with the agent or is it with the seller. Again, as in Action one, the lawyer should bear the facts in mind and try to speed up the whole process.

Third method

This is the newest method our Varna lawyers have found that sellers use. As you can imagine, it is also in connection with the payments. The seller provides a bank account to which the purchase price should be sent. However, the account holder of that account is usually an offshore company, which has nothing to do with both Bulgaria and the ownership of the property that is being transfered. The seller is counting on the fact that the buyer wouldn’t notice that this is a bank account with different holder.

Reason for doing this: The seller obviously wants to avoid taxation. This is why this method is usually used when selling whole complexes of apartments, but not single units. Usually the seller do transfers the ownership, but there is always a risk about it. The worst thing with this method is that if the buyer is scammed, the lawyer in Varna has very little chance to recover the funds. The main reason is that the court case has different jurisdiction: the case should be heard in the offshore country. Bulgarian lawyers are not entitled to practice in full out of the Bulgarian jurisdiction, especially in offshore zones (except in EU).

As a summary, one should be very careful when buying property. Not all sellers/agents are fraudulent, but you should be careful. To be sure that everything goes right, do hire a Varna lawyer. The benefits of hiring a lawyer or law firm are not only the legal knowledge, but also the experience with dealing with local agents/sellers. The lawyers are aware of the reputation of the local developers/agents.

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Bulgaria Buy To Let (Bulgaria BTL)

This is yet another developer which throws shade on all foreign investments in Bulgaria. The company Bulgaria BTL is a developer company which was supposed to build a nice closed house complex at the foot of mountain Vitosha, Sofia. The houses were sold off plan. The company started attracting buyers, by asking them for small initial  installment of ? 5000. The latter amount was supposed to be for opening a company in Bulgaria, and later that company was supposed to buy the land and the house.

However, the company just took the ? 5000 and seized the construction. This leads all investors to a dead end. The company website is now closed and the buyers consider themselves as a victims of fraud.

However not everything is lost. Our lawyers have performed a legal due diligence of Bulgaria BTL. Here is what we found:

Company name: Bulgaria Buy To Let LLC,

Company file No 131436790

Registered addres: Sofia, 36 Dragan Tzankov Blvd, Entr. B, floor 5, office 501

Manager: Simon Cristofer James Also

Shareholders: 1.Ingrid Grace Also and

2.Anil Kohli

Registered capital of the company: 5000 levs (about EUR 2500)

Since 2008 there are no activities in the commercial register company file, initiated by the manager. This should be a sign that the company is left. The Commercial register shows that Anil Kohli’s shares has been seized by the court. This seizure is initiated by a Bulgarian citizen. Our legal interpretation is that most probably Anil Kohli owes the Bulgarian person certain amount of money ( EUR 94600, to be specific) and therefore the court has issued a seizure order against Anil Kohli, consequently seizing his shares in the company.

The legal due diligence showed also that the company owes a factory for producing wooden materials for house construction. So far there are no liens over that property, so the quicker creditors get their claims filed in court, the better chance they have to get their ? 5000 back. The factory can be seized so, it will stay there for the plaintiffs, no matter how long the case lasts in court. After getting the positive court resolution, the creditors could put the factory on a public tender, sell it and get their money back. The latter should be done via law enforcement agent.

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Interlink Management changed since 27 August 2009

Maria Georgieva is removed from Interlink’s management. The new management of the company promises that they will do their best to finish the projects that are already started. I’ve been in contact with them and they are far more cooperative than the previous ones.

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Bulgarian lawsuit procedure: what to expect

If you happen to be a party in a lawsuit in Bulgaria, you should be aware of the following:

  1. Don’t be impatient. Bulgarian Civil Proceedings Code regulates certain terms that have to be taken into consideration
  2. The weakest part in a lawsuit is the delivery of subpoenas. All the papers which have to be delivered to the parties, are carried by employees of the court called “призовкари” (subpoena carriers) . The delivery employees are not limited to delivery terms, as the law assumes that there may be troubles finding the parties. That’s why a typical subpoena delivery may take about a month.
  3. When a lawsuit is filed, there is one month period, which has to pass, before the judge sets a date for the first hearing. This is a period in which the defendant has to submit an answer to the claim. Please note that this period starts, as from the day the claim was delivered to the defendant.(See point 2 above)
  4. The judge may “stretch” the lawsuit in several hearings, depending on how complicated is the case. Usually lawsuits have two or three hearings. The time between the hearings depends on the caseload of the particular judge. Usually its one or two months.
  5. When the lawsuit is announced for resolving by the judge, there is a one month term during which the judge has to issue the court resolution.
  6. If the resolution is not appealed, it enters into force and you may engage a law enforcement agent.

Of course the above is just a brief explanation of the lawsuit procedure in Bulgaria, but basically you don’t have to push your lawyer,because not everything depends on him/her.

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