If you have bought a rural property in Bulgaria back in mid 2000s, you know it's not too easy to maintain it if you are not living permanently in the country. Because of Covid-19 restrictions, many Britons now feel they can't use their rural houses and are willing to sell them on loss, especially in Dobrich region, North of Varna.
If your case is similar, be careful not to fall into the trap of the still unregulated profession of the "property agent". Besides charging extortionate commissions of 3% (excl.VAT), they usually insist on receiving their commission in cash and in hand, without issuing any receipts or invoices, thus leaving no trace that you have actually paid them. You may think it doesn't affect you but you might be wrong as it's tax evasion.
Urging the deal? The property agents just want their commission.
Remember that the agent is not protecting your interests, only their own. Property agent's profession is not regulated in Bulgaria and it's not bound to any professional standards. Property agents in Bulgaria don't have any mandatory indemnity insurances and you can't complain to any professional supervising body in case you are scammed. The only work an agent does, is connecting the buyer and the seller.
No matter what they tell you (e.g. assist with the transaction documents etc), remember that they usually have no legal background, no accounting background and are working only with blank form documents. Your particular case may require special legal attention and if you trust the property agent to do the legal work, it might get you in trouble.
It's cheaper to use solicitor than pay an agent for services, which they are not qualified for
The property agents usually try not to pay taxes on their commission, hence they will tell you anything to convince you to pay them in cash. Don't do it! Especially if you your property is owned by a limited company. Any money paid out of the conveyancing proceeds has to be recorded in your company books thus any cash payment without a proper receipt or invoice will bring you tax problems.
Even if you are a buyer, don't pay property agent's commission in cash or if you do, require an invoice (and cash register receipt, which is mandatory for all traders in Bulgaria). This will be a proof of payment, should something with the deal go wrong and the agent doesn't refund you.
We've been noticing such property agents' malpractices, especially in the area North of Varna (Dobrich, Balchik, Kavarna) where agents ill-advise their clients on legal and accounting issues. Usually property agents also "act" on both parties' behalf which, as you can imagine, cannot ensure independent advice to either of the represented parties. We have extensive litigation experience with such property agents in the infamous "Bulgarian Dreams" case, which was also broadcasted on BBC Watchdog.
Need a solicitor to help you sell or buy property North of Varna? Contact us!