Major amendments in the Condominium Management Act

New major amendments have taken place in the Condominium Management Act. If one reads them carefully it is obvious the the lobby of the property developers has passed regulations in their favour. Here is a brief description of the major changes (not a complete list):

1. Previous wording of "closed complexes article" didn't provide who is responsible for filing the registration of the management contract to the Land registry. The new wording is clear: the developer is responsible for this. The lobbing is crystal clear. The so called "closed complexes" are basically a tool for blackmailing and "milking" the buyers. Basically if you buy apartment in such complex, you are bonded to the developer forever. He can charge you whatever maintenance fees he likes. Be careful with this. (Art. 2 Para 2 )

2. A new regulation about small buildings has been introduced. If the building has up to 3 separate premises, owned by different people, the relations between the owners is regulated by the Ownership Act and not by the Condominium Management Act.

3. The new amendments create some new rights to the lessees of the premises(residents), which we won't discuss in details now.

4. Owners have to pay for repairs of the common parts, but only from what is collected into the "Repair and Renovation fund". Our interpretation on this is that owners are required to pay only from their installments made to the "Repair and Renovation fund", and can refuse to pay interim expenses, which exceed their installments to this fund. (Art. 6 para 1 point 9)

5. There's a slight change in wording about what expenses are paid by owners. According to the new amendments, owners pay for management costs of the common parts. The previous wording used to be "owners pay for for utilities costs". It's clear that a new expense is created here - the management of the condominium. It used to be in the law implicitly but now it is defined more clearly that it's owners responsibility and is equal to the utility expenses. (Art 6 para 1 point 10)

6. Now every owner/resident of the premises in the building has to subscribe themselves into the Condominium book. Our interpretation is that the owner/resident has to ask the manager (who holds the book by law) to enter them in the book.Before the amendment, it was not specified who is responsible for subscribing the new owners/residents into the book.(art. 7 para 3 )

7. For all dog owners, a specification of what should be entered in to condominium book regarding dogs in the building - the book should include their veterinarian passport details(Art 7 para 6 )

8. Various amendments has taken place in the General Meeting rights and obligations (Art 11):

  • The right for GM to distribute the utilities expenses for the common parts is removed (point 1 para 1 )
  • The act of renovation of the building is no longer registered to the municipality register (point 10, letter "v")
  • The GM no longer sanctions an owner pursuant to the condominium act. (point 10, letter "k" is removed). This is removed because it has to do with simple majority resolutions (50%+1). The sanctions right still stays, but can be exercised with increased 75% majority.
  • GM decides on connecting or disconnecting the building to gas and heating supplier (point 10, new letter "l")

9. The owners don't need to convene GM through the local mayor anymore. The previous wording is removed. The new wording is rather generic. Owners can convene General Meeting according to the provision of the law herein. We, however need to point out that owners cannot convene GM directly, but they first need to ask the manager to do it. If the manager don't do it, then owners can convene a GM themselves, following the procedure in the law (sending invitations etc.). In short, the mayor is no longer involved.

  • Each owner can convene GM in urgent cases OR at least if one year has passed from the last ordinary GM. ( new para 5). Now here the minimum % of owners for convening a GM has been removed. Each owner can now convene the GM without first asking the manager, but only in the aforesaid cases.
  • A new paragraph has been added for newly established condominiums. Each owner can convene the first General meeting! There are no more requirement for 20% common parts owners. This clears out a big hole in the legislation. nobody knew before how the first GM can be convened without existing manager (elected by the GM). Now the law is clear enough. (new para 6 (old 5))

10. A new Art 13 has been created:

  • GM is convened by sticking the invitation on visible and public accessible place in the building not earlier than 7 days before the meeting. In urgent matters the term is not earlier than 24 before the meeting. (new para 1)
  • Owner/resident who is absent for more than 1 month, has to notify in writing the manager of the condominium and has to leave an email address or postal address on which invitations for GM to be send, as well as a phone number. (para 2 ). That's a great improvement and making the convening procedure very light. Now we finally enter 21 century by using emails. However the regulation is creating controversy. The person who sends the email may not send them at all and still states that he has send them!! Now how an owner can prove in court that he has ( or not) received an email. That's a situation we don't want to be in. (para 2)
  • Notification about GM convening can be done verbally (explaining the invitation text), which notification is certified in writing by the persons who are sending the invitations OR by sending the invitation by post or email if such are provided. We now see that only phone notifications has to be confirmed by second person in writing. Sending emails don't need to be confirmed. This is huge ground for speculations by the managers who convene GMs (para 3 new)
  • If the owner hasn't provided email or postal address for receiving invitations, the owner is considered as legally invited for GM pursuant para 1 above. This means that if the owner hasn't provided email ot postal address, the convening is considered as legal for this owner by only putting a note in a visible public place in the building. (para 4)
  • A major change is removing the ban for convening GMs between 15 July and 15 September. The ban stays only for convening GMs on public holidays (para 8 )

11. Major changes in Art. 14:

  • New amendment has been introduced in connection to representation of owners on GM by their relatives. The relatives need to be registered in the condominium book in order to represent the owner. (new para 1)
  • A pleasant surprise is that lawyers, registered in Bar can represent owners on GM only by using normal power of attorney in writing. No notarization required! (para 3)

12. Changes in Art. 15

  • A 67% quorum is not required in cases of art.17, para 2 point 1-4. This means that most of the important resolutions a quorum is not required. This doesn't makes sense, but it's in the law. (para one)
  • If there's no quorum, the GM is postponed by one hour and can continue only if 33% of the common parts are present. It used to continue with no matter what % is present, now 33% has to be present (para 2)
  • If there's no 33% on the postponed GM, the GM is convened on the next day. If it is non-working day, the GM is convened on the first working day after that. (para 3 new). On the next day (second postponing), the GM can continue no matter how many owners have attended.

13. Changes to Art. 16:

  • The notice that the GM minutes are ready has to be stuck on a public visible place in the building. A protocol is drafted, evidencing the sticking and it is signed by the manager and one resident/owner. The protocol consists of date and time of the sitcking the notice. A copy of the minutes is provided to owners upon request. Here we have a witness of the anouncing the minutes. This is important for appealing GM resolutions, since if no such sticking is done, or no formal protocol for it is signed, there is a formal legal ground for GM to be stopped from enforcing. (para 7)
  • New changes has been introduced to the start of the term for contesting the GM resolutions. The procedure for sticking the notice to the door is removed from this regulation. The terms starts from the moment of sticking the minutes on the public place in the building. This clause saves time to the manager. Instead of going to each apartment door, they only make one notice in the building. (para 9)

14. Changes in all points of para 2 of Art 17. This concerns the majority for adoption of resolution on important matter:

  • 100% majority is required for construction works for new floors, building attachments or establishing building rights in the common condominium land.
  • 75% majority is required for removing an owner from its property for not more than 3 years period. The % of common parts of the removed owners are not added to those 75% and and taken in consideration.
  • 75% majority is required for usefull expenses and receiving of credits.
  • Few more points are created, specifying majority for resolution on different condominium matters.

15. I'm making this a separate point since the information is important and concerns the common parts calculation - one of the trickiest parts in condominium management. As I wrote before, developers are playing hard with this matter and sometimes lie about what common parts are owned by them and owners. Since a proper credible information about the common areas cannot be obtained  from any government or local authority, this issue becomes very serious. The new paragraphs 4 , 5 and 6 try to bring some light to the subject, but in my opinion it is not enough. It's unofficial translation, so I apologize if there's nonsense in some sentences. I'm waiting for the official government translation into English.

(4) (New - SG. 57 of 2011) When the ownership documents of the individual objects in buildings in the condominium property are not specifying the respective shares of common areas, for the purposes of this law, the ideal parts for each individual site is defined as the ratio between the sum of the size of the individual object and storerooms, assigned to the object, divided by the sum of the area of ??all individual objects and assigned storage areas, thereby resulting number is converted into percentages. (5) (new - SG. 57 of 2011) Under paragraph. 4 the established the ideal parts of common areas are based on data submitted by the owners or information under Art. 23, para. 1, p. 10, where: 1. sum of the percentages of undivided shares of the owners in common areas is not equal to 100; 2. management is carried in each input, and the sum of the percentages of undivided shares to the owners of the common parts in the input is equal to 100. (6) (new - SG. 57 of 2011) all common parts set out under par. 4 and 5 are approved by the General Assembly by a majority of not less than two thirds of independent objects in the building entrance. The General Assembly may refuse to approve certain common parts only if an error in calculation.

Now, we can see that when the deed doesn't state percentage, the calculation of each owner common parts percentage is calculated as a ratio between the total area of the owners premises (apartment, basement etc), divided to the sum of all areas of all individual premises the building. The ratio is converted to percentage and that is the common parts percentage which owner can use to vote on GM.

Note on the Owners associations

There are various changes in the law regarding the owners associations, registered according to this law. I'm not going in details about them because I think owners associations are rare in practice. This doesn't concern the Owners Association, registered pursuant the Not For Profit Organizations Act.

Major amendments in the Condominium Management Act

New major amendments have taken place in the Condominium Management Act. If one reads them carefully it is obvious the the lobby of the property developers has passed regulations in their favour. Here is a brief description of the major changes (not a complete list):

1. Previous wording of "closed complexes article" didn't provide who is responsible for filing the registration of the management contract to the Land registry. The new wording is clear: the developer is responsible for this. The lobbing is crystal clear. The so called "closed complexes" are basically a tool for blackmailing and "milking" the buyers. Basically if you buy apartment in such complex, you are bonded to the developer forever. He can charge you whatever maintenance fees he likes. Be careful with this. (Art. 2 Para 2 )

2. A new regulation about small buildings has been introduced. If the building has up to 3 separate premises, owned by different people, the relations between the owners is regulated by the Ownership Act and not by the Condominium Management Act.

3. The new amendments create some new rights to the lessees of the premises(residents), which we won't discuss in details now.

4. Owners have to pay for repairs of the common parts, but only from what is collected into the "Repair and Renovation fund". Our interpretation on this is that owners are required to pay only from their installments made to the "Repair and Renovation fund", and can refuse to pay interim expenses, which exceed their installments to this fund. (Art. 6 para 1 point 9)

5. There's a slight change in wording about what expenses are paid by owners. According to the new amendments, owners pay for management costs of the common parts. The previous wording used to be "owners pay for for utilities costs". It's clear that a new expense is created here - the management of the condominium. It used to be in the law implicitly but now it is defined more clearly that it's owners responsibility and is equal to the utility expenses. (Art 6 para 1 point 10)

6. Now every owner/resident of the premises in the building has to subscribe themselves into the Condominium book. Our interpretation is that the owner/resident has to ask the manager (who holds the book by law) to enter them in the book.Before the amendment, it was not specified who is responsible for subscribing the new owners/residents into the book.(art. 7 para 3 )

7. For all dog owners, a specification of what should be entered in to condominium book regarding dogs in the building - the book should include their veterinarian passport details(Art 7 para 6 )

8. Various amendments has taken place in the General Meeting rights and obligations (Art 11):

  • The right for GM to distribute the utilities expenses for the common parts is removed (point 1 para 1 )
  • The act of renovation of the building is no longer registered to the municipality register (point 10, letter "v")
  • The GM no longer sanctions an owner pursuant to the condominium act. (point 10, letter "k" is removed). This is removed because it has to do with simple majority resolutions (50%+1). The sanctions right still stays, but can be exercised with increased 75% majority.
  • GM decides on connecting or disconnecting the building to gas and heating supplier (point 10, new letter "l")

9. The owners don't need to convene GM through the local mayor anymore. The previous wording is removed. The new wording is rather generic. Owners can convene General Meeting according to the provision of the law herein. We, however need to point out that owners cannot convene GM directly, but they first need to ask the manager to do it. If the manager don't do it, then owners can convene a GM themselves, following the procedure in the law (sending invitations etc.). In short, the mayor is no longer involved.

  • Each owner can convene GM in urgent cases OR at least if one year has passed from the last ordinary GM. ( new para 5). Now here the minimum % of owners for convening a GM has been removed. Each owner can now convene the GM without first asking the manager, but only in the aforesaid cases.
  • A new paragraph has been added for newly established condominiums. Each owner can convene the first General meeting! There are no more requirement for 20% common parts owners. This clears out a big hole in the legislation. nobody knew before how the first GM can be convened without existing manager (elected by the GM). Now the law is clear enough. (new para 6 (old 5))

10. A new Art 13 has been created:

  • GM is convened by sticking the invitation on visible and public accessible place in the building not earlier than 7 days before the meeting. In urgent matters the term is not earlier than 24 before the meeting. (new para 1)
  • Owner/resident who is absent for more than 1 month, has to notify in writing the manager of the condominium and has to leave an email address or postal address on which invitations for GM to be send, as well as a phone number. (para 2 ). That's a great improvement and making the convening procedure very light. Now we finally enter 21 century by using emails. However the regulation is creating controversy. The person who sends the email may not send them at all and still states that he has send them!! Now how an owner can prove in court that he has ( or not) received an email. That's a situation we don't want to be in. (para 2)
  • Notification about GM convening can be done verbally (explaining the invitation text), which notification is certified in writing by the persons who are sending the invitations OR by sending the invitation by post or email if such are provided. We now see that only phone notifications has to be confirmed by second person in writing. Sending emails don't need to be confirmed. This is huge ground for speculations by the managers who convene GMs (para 3 new)
  • If the owner hasn't provided email or postal address for receiving invitations, the owner is considered as legally invited for GM pursuant para 1 above. This means that if the owner hasn't provided email ot postal address, the convening is considered as legal for this owner by only putting a note in a visible public place in the building. (para 4)
  • A major change is removing the ban for convening GMs between 15 July and 15 September. The ban stays only for convening GMs on public holidays (para 8 )

11. Major changes in Art. 14:

  • New amendment has been introduced in connection to representation of owners on GM by their relatives. The relatives need to be registered in the condominium book in order to represent the owner. (new para 1)
  • A pleasant surprise is that lawyers, registered in Bar can represent owners on GM only by using normal power of attorney in writing. No notarization required! (para 3)

12. Changes in Art. 15

  • A 67% quorum is not required in cases of art.17, para 2 point 1-4. This means that most of the important resolutions a quorum is not required. This doesn't makes sense, but it's in the law. (para one)
  • If there's no quorum, the GM is postponed by one hour and can continue only if 33% of the common parts are present. It used to continue with no matter what % is present, now 33% has to be present (para 2)
  • If there's no 33% on the postponed GM, the GM is convened on the next day. If it is non-working day, the GM is convened on the first working day after that. (para 3 new). On the next day (second postponing), the GM can continue no matter how many owners have attended.

13. Changes to Art. 16:

  • The notice that the GM minutes are ready has to be stuck on a public visible place in the building. A protocol is drafted, evidencing the sticking and it is signed by the manager and one resident/owner. The protocol consists of date and time of the sitcking the notice. A copy of the minutes is provided to owners upon request. Here we have a witness of the anouncing the minutes. This is important for appealing GM resolutions, since if no such sticking is done, or no formal protocol for it is signed, there is a formal legal ground for GM to be stopped from enforcing. (para 7)
  • New changes has been introduced to the start of the term for contesting the GM resolutions. The procedure for sticking the notice to the door is removed from this regulation. The terms starts from the moment of sticking the minutes on the public place in the building. This clause saves time to the manager. Instead of going to each apartment door, they only make one notice in the building. (para 9)

14. Changes in all points of para 2 of Art 17. This concerns the majority for adoption of resolution on important matter:

  • 100% majority is required for construction works for new floors, building attachments or establishing building rights in the common condominium land.
  • 75% majority is required for removing an owner from its property for not more than 3 years period. The % of common parts of the removed owners are not added to those 75% and and taken in consideration.
  • 75% majority is required for usefull expenses and receiving of credits.
  • Few more points are created, specifying majority for resolution on different condominium matters.

15. I'm making this a separate point since the information is important and concerns the common parts calculation - one of the trickiest parts in condominium management. As I wrote before, developers are playing hard with this matter and sometimes lie about what common parts are owned by them and owners. Since a proper credible information about the common areas cannot be obtained  from any government or local authority, this issue becomes very serious. The new paragraphs 4 , 5 and 6 try to bring some light to the subject, but in my opinion it is not enough. It's unofficial translation, so I apologize if there's nonsense in some sentences. I'm waiting for the official government translation into English.

(4) (New - SG. 57 of 2011) When the ownership documents of the individual objects in buildings in the condominium property are not specifying the respective shares of common areas, for the purposes of this law, the ideal parts for each individual site is defined as the ratio between the sum of the size of the individual object and storerooms, assigned to the object, divided by the sum of the area of ??all individual objects and assigned storage areas, thereby resulting number is converted into percentages. (5) (new - SG. 57 of 2011) Under paragraph. 4 the established the ideal parts of common areas are based on data submitted by the owners or information under Art. 23, para. 1, p. 10, where: 1. sum of the percentages of undivided shares of the owners in common areas is not equal to 100; 2. management is carried in each input, and the sum of the percentages of undivided shares to the owners of the common parts in the input is equal to 100. (6) (new - SG. 57 of 2011) all common parts set out under par. 4 and 5 are approved by the General Assembly by a majority of not less than two thirds of independent objects in the building entrance. The General Assembly may refuse to approve certain common parts only if an error in calculation.

Now, we can see that when the deed doesn't state percentage, the calculation of each owner common parts percentage is calculated as a ratio between the total area of the owners premises (apartment, basement etc), divided to the sum of all areas of all individual premises the building. The ratio is converted to percentage and that is the common parts percentage which owner can use to vote on GM.

Note on the Owners associations

There are various changes in the law regarding the owners associations, registered according to this law. I'm not going in details about them because I think owners associations are rare in practice. This doesn't concern the Owners Association, registered pursuant the Not For Profit Organizations Act.

Old rural houses require special certificate upon selling

If you want to sell or buy an old rural house in Bulgaria, you need to know when this house was built or if it has construction papers. One of the rare documents that is required by the notaries in Bulgaria upon notary certification of sale/purchase deals is the certificate for construction tolerance. the legal grounds for it is § 16 of the Bulgarian Spatial Development Act:

§ 16. (1) (Supplemented, SG No. 65/2003) Any construction works constructed prior to the 7th day of April 1987, in respect of which a construction file is lacking but which were permissible under the effective detailed urban-development plans and under the rules and standard specifications effective during the time of performance thereof or according to this Act, shall be tolerable construction works and shall not be subject to removal and to ban on use. Any such work may be subject to a transfer transaction upon presentation of a certificate issued by the authorities which are empowered to approve the relevant development-project designs, to the effect that the said construction work is tolerable.
According to our solicitor practice this requirement is strictly applied mainly in Stara Zagora area. Notaries in the rest of the country are not so keen to apply this requirement. The legal court practice is ambiguous regarding the fact whether a if a property deal has been performed without this certificate enclosed to the notary file of the property deal. Our professional solicitor opinion is that this regulation doesn't affect the deal, because this certificate only establishes a construction status of the property. the property has been there before the law. Pursuant a general legal principle a certain fact has to be judged as of the moment the fact has occurred and according to the law when this fact has occurred. In that connection, if the building was built according to the requirement of the law, which was in effect when the property has been built, the building should be legal.

Old rural houses require special certificate upon selling

If you want to sell or buy an old rural house in Bulgaria, you need to know when this house was built or if it has construction papers. One of the rare documents that is required by the notaries in Bulgaria upon notary certification of sale/purchase deals is the certificate for construction tolerance. the legal grounds for it is § 16 of the Bulgarian Spatial Development Act:

§ 16. (1) (Supplemented, SG No. 65/2003) Any construction works constructed prior to the 7th day of April 1987, in respect of which a construction file is lacking but which were permissible under the effective detailed urban-development plans and under the rules and standard specifications effective during the time of performance thereof or according to this Act, shall be tolerable construction works and shall not be subject to removal and to ban on use. Any such work may be subject to a transfer transaction upon presentation of a certificate issued by the authorities which are empowered to approve the relevant development-project designs, to the effect that the said construction work is tolerable.
According to our solicitor practice this requirement is strictly applied mainly in Stara Zagora area. Notaries in the rest of the country are not so keen to apply this requirement. The legal court practice is ambiguous regarding the fact whether a if a property deal has been performed without this certificate enclosed to the notary file of the property deal. Our professional solicitor opinion is that this regulation doesn't affect the deal, because this certificate only establishes a construction status of the property. the property has been there before the law. Pursuant a general legal principle a certain fact has to be judged as of the moment the fact has occurred and according to the law when this fact has occurred. In that connection, if the building was built according to the requirement of the law, which was in effect when the property has been built, the building should be legal.

Costs after obtaining EU transport license in Bulgaria

Every company, registered in Bulgaria can obtain EU transport license. The company needs to meet certain requirements before it applies to the Executive Agency "Transport Administration" for license. There will be additional costs, besides the one for issuing the license. After the license is obtained, the company should (if not already) manage the truck/buses registration in the local Traffic Police office. The following approximate expenses per vehicle will occur:

1. Applying new registration plates - BGN 100 or EUR 50
  1. Registration of tachograph - BGN 120 or EUR 60

  2. Technical examination of the vehicle - BGN 50 or EUR 25

  3. Translation of the documents for the vehicle - BGN 80 or EUR 40

  4. Road tax for Bulgaria - from BGN 1000 to BGN 1300 per year or EUR 500-650 per year.

Total amount: BGN 1650 or about EUR 844

The above paperwork has to be done after the company gets the transport license. Not all of them are mandatory if the trucks are bought or leased in Bulgaria. Our solicitors in Varna are pleased to provide one-stop-shop for starting an EU licensed transportation company. We can offer:
  • transport company registration
  • VAT registration and accounting services to transportation company
  • obtaining EU transport license in Bulgaria
  • registration of the trucks/buses and the equipment with the respective authorities
  • providing legal and accounting assistance in negotiating with lease companies and banks.
  • drafting/amending transportation agreements with partners/clients
  • dealing with insurance companies regarding transportation damages/accidents

The lawyers and accountants at MHLegal  are qualified for dealing with all of the aforesaid matters. We can help you establish your local Bulgarian transport company with no hassle.

Costs after obtaining EU transport license in Bulgaria

Every company, registered in Bulgaria can obtain EU transport license. The company needs to meet certain requirements before it applies to the Executive Agency "Transport Administration" for license. There will be additional costs, besides the one for issuing the license. After the license is obtained, the company should (if not already) manage the truck/buses registration in the local Traffic Police office. The following approximate expenses per vehicle will occur:

1. Applying new registration plates - BGN 100 or EUR 50
  1. Registration of tachograph - BGN 120 or EUR 60

  2. Technical examination of the vehicle - BGN 50 or EUR 25

  3. Translation of the documents for the vehicle - BGN 80 or EUR 40

  4. Road tax for Bulgaria - from BGN 1000 to BGN 1300 per year or EUR 500-650 per year.

Total amount: BGN 1650 or about EUR 844

The above paperwork has to be done after the company gets the transport license. Not all of them are mandatory if the trucks are bought or leased in Bulgaria. Our solicitors in Varna are pleased to provide one-stop-shop for starting an EU licensed transportation company. We can offer:
  • transport company registration
  • VAT registration and accounting services to transportation company
  • obtaining EU transport license in Bulgaria
  • registration of the trucks/buses and the equipment with the respective authorities
  • providing legal and accounting assistance in negotiating with lease companies and banks.
  • drafting/amending transportation agreements with partners/clients
  • dealing with insurance companies regarding transportation damages/accidents

The lawyers and accountants at MHLegal  are qualified for dealing with all of the aforesaid matters. We can help you establish your local Bulgarian transport company with no hassle.

Distressed Bulgarian Property - how to find and buy one

Few of the foreign property investors know that one can buy really cheap distressed property in Bulgaria. Moreover there's a search option, by using different criteria (location, limit by price, property type etc.). The distressed property catalog can be found on the website of the Bulgarian Chamber of the Private Law enforcement Agents. The particular catalog is only in Bulgarian, since it's generated by all private enforcement agents in Bulgaria most of which doesn't speak English. However you can use Google Translate service to do a basic translation.

How you can buy distressed property

The purchase process is done by participating in an auction, organized by the enforcement agent. First, you will notice that there is an initial bid price - its 75% of the value of the property. In order to-participate in the auction you need to pay a deposit of 10% of the initial bid price. This deposit is refundable in case you don't win the bid. The bid offer has to be submitted on paper in a closed, non-transparent envelope by the end of the bidding period.

Winning the auction and transfering the property to the buyer

If no bid has been submitted within one month after the auction was opened, the law enforcement agent appoints new auction date and the initial bid price is dropped to 80% of the first auction initial bid price. Some entities (mainly banks) take advantage of this legal proceedings and hire solicitors to do their best and prevent from other people taking part in the first auction. This allows the banks and mainly high level bank employees to buy really cheap distressed properties. This got harder because of the public distressed property catalog.

On the auction, each offer is opened and the law enforcement agent announces the highest bid. The bidder is announced as winner of the initial bidding. If some of the attending bidders decides, they can bid verbally on the top of the winning initial bid. Further verbal bidding can be done until there is only one winner.

In the end the law enforcement agent announces the winner and reminds them to pay the rest of the bid price in one week term.

Normally, solicitors are hired by property buyers in order to bid on the auction on their behalf.  The solicitor is familiar with the procedure so the bidding process will be smooth and favourable.

Distressed Bulgarian Property - how to find and buy one

Few of the foreign property investors know that one can buy really cheap distressed property in Bulgaria. Moreover there's a search option, by using different criteria (location, limit by price, property type etc.). The distressed property catalog can be found on the website of the Bulgarian Chamber of the Private Law enforcement Agents. The particular catalog is only in Bulgarian, since it's generated by all private enforcement agents in Bulgaria most of which doesn't speak English. However you can use Google Translate service to do a basic translation.

How you can buy distressed property

The purchase process is done by participating in an auction, organized by the enforcement agent. First, you will notice that there is an initial bid price - its 75% of the value of the property. In order to-participate in the auction you need to pay a deposit of 10% of the initial bid price. This deposit is refundable in case you don't win the bid. The bid offer has to be submitted on paper in a closed, non-transparent envelope by the end of the bidding period.

Winning the auction and transfering the property to the buyer

If no bid has been submitted within one month after the auction was opened, the law enforcement agent appoints new auction date and the initial bid price is dropped to 80% of the first auction initial bid price. Some entities (mainly banks) take advantage of this legal proceedings and hire solicitors to do their best and prevent from other people taking part in the first auction. This allows the banks and mainly high level bank employees to buy really cheap distressed properties. This got harder because of the public distressed property catalog.

On the auction, each offer is opened and the law enforcement agent announces the highest bid. The bidder is announced as winner of the initial bidding. If some of the attending bidders decides, they can bid verbally on the top of the winning initial bid. Further verbal bidding can be done until there is only one winner.

In the end the law enforcement agent announces the winner and reminds them to pay the rest of the bid price in one week term.

Normally, solicitors are hired by property buyers in order to bid on the auction on their behalf.  The solicitor is familiar with the procedure so the bidding process will be smooth and favourable.

Are management fees still owed after you sell your apartment

In our lawyer practice in Varna and Black Sea region we face various types of property management contracts. Some of them are drafted professionally by other lawyers and others are done pretty bad by the property developers themselves. Generally there are two types of property management contracts:

  1. Property management contract for the common areas of the condominium and
  2. Property management contract for the individual apartment or other commercial premises in the building
The first type of contract (#1 above) has to be signed by the Management Committee or the Manager of the condominium. The Condominium Management Act stipulates that contracts for management of the common parts of the building are signed by the representative of the condominium BUT ONLY after the contracting party is approved by the General Meeting of the condominium. In case of such contract all owners of apartments and other individual premises in the building are obliged to mind the General Meeting's resolution. Also in this case "the management contract follows the ownership of the apartment" i.e. if you sell your property the new owner will be obliged to pay any outstanding management fees.

In the second type of contract (#2 above), the legal theory is diverse. The prevailing lawyer's opinion is that property management of individual apartment is contracted by the owner as individual and therefore any outstanding payments for the management company should be paid by the person who was owner at the moment of signing the contract. This type of management agreement is not considered as part of the ownership, but rather than a separate service rendered to the person.

Are management fees still owed after you sell your apartment

In our lawyer practice in Varna and Black Sea region we face various types of property management contracts. Some of them are drafted professionally by other lawyers and others are done pretty bad by the property developers themselves. Generally there are two types of property management contracts:

  1. Property management contract for the common areas of the condominium and
  2. Property management contract for the individual apartment or other commercial premises in the building
The first type of contract (#1 above) has to be signed by the Management Committee or the Manager of the condominium. The Condominium Management Act stipulates that contracts for management of the common parts of the building are signed by the representative of the condominium BUT ONLY after the contracting party is approved by the General Meeting of the condominium. In case of such contract all owners of apartments and other individual premises in the building are obliged to mind the General Meeting's resolution. Also in this case "the management contract follows the ownership of the apartment" i.e. if you sell your property the new owner will be obliged to pay any outstanding management fees.

In the second type of contract (#2 above), the legal theory is diverse. The prevailing lawyer's opinion is that property management of individual apartment is contracted by the owner as individual and therefore any outstanding payments for the management company should be paid by the person who was owner at the moment of signing the contract. This type of management agreement is not considered as part of the ownership, but rather than a separate service rendered to the person.