Unpaid health insurance contribution won't influence property deals after all

After the Health Insurance Bill has been passed to the Parliament for voting, the controversial obligation for payment of all health insurance contributions upon selling a property was waived. After discussions in the Bulgarian Parliament, the MPs voted against the suggested amendment. Most of them considered it as unconstitutional and as restraining the right of private property (e.g. freedom of disposing property).

This amendment was suggested by the Ministry of Health as a measure for collection of the unpaid national health insurance contributions. The idea behind this suggestions was to increase the collection of health insurance contributions. However this would have burden the property deals with additional bureaucracy and wasted time for obtaining documents from NRA.

Unpaid health insurance contribution won't influence property deals after all

After the Health Insurance Bill has been passed to the Parliament for voting, the controversial obligation for payment of all health insurance contributions upon selling a property was waived. After discussions in the Bulgarian Parliament, the MPs voted against the suggested amendment. Most of them considered it as unconstitutional and as restraining the right of private property (e.g. freedom of disposing property).

This amendment was suggested by the Ministry of Health as a measure for collection of the unpaid national health insurance contributions. The idea behind this suggestions was to increase the collection of health insurance contributions. However this would have burden the property deals with additional bureaucracy and wasted time for obtaining documents from NRA.

Moving office

We have moved our office to e better location. Our new address is Varna 9000, 12 Konstantin Velichkov Str., floor 1, office 8

[map w="940" z="16" address="Bulgaria, Varna, ulitsa Konstantin Velichkov 12" marker="yes"]

Moving office

We have moved our office to e better location. Our new address is Varna 9000, 12 Konstantin Velichkov Str., floor 1, office 8

[map w="940" z="16" address="Bulgaria, Varna, ulitsa Konstantin Velichkov 12" marker="yes"]

Dangerously ignorant property agents

Property deals during summer increase, so is the greed of property agents. Britons who buy for first time in Bulgaria usually trust property agents as the profession of the property agent is very well regulated in UK. However it is not the same case in Bulgaria.

Legal status of property agents in Bulgaria

Currently anyone can become property agent - they just need a website and an advert on some of the biggest property portals. Enquiries will start coming in a while. In their pursue of more closed deals, property agents shovel the buyers with offers and push them to buy. This is not good for buyers in any case. The agent thinks "that his only job is to connect the buyer and the seller" and possibly hide as much information about the defects of the property as they can. Often they don't explain the conveyancing process, what defect the buyer should watch for etc. The bad thing here is that they often discourage buyers from using solicitors too. The agents want to be self sufficient, as they know that most of the properties sold on the market are full of defects. Involving solicitors would mean thorough property checks and subsequently - less deals.

Why not to trust the property agent 100%

First of all - most of them have limited knowledge of the legal aspect of property purchase/sale. Yes, they follow blindly some conveyancing blank forms (ready made general PoAs, declarations etc.), but if a problem appears most likely they won't be able to spot it and warn the buyer. Notaries also make basic checks (like encumbrances check), but they are not obliged to! Notaries only certify and make sure the will of the parties is to sell/buy and the form of the deed is correct.

Remember that notaries act in nobody's interest. They are not supposed to take any party's side and therefore couldn't defend anybody's interest. They are certification authority only!

Since property agents only "connect parties" and some do conveyancing on behalf of their clients, it is not serious to think that they defend buyer's interest. Their benefit is to close the deal and get their commission, not to defend buyer's interest. Often in our practise we see the consequences of such negligent property agents' work - people buy joint property, which they thought it was a full ownership, the property has illegal construction on it etc. In such cases, the property gets devalued immediately, even more - it causes financial damages to the buyer.

Since the property agent profession is not regulated, there is not indemnification. Agents are not obliged to be insured for damages caused to third parties during their professional work. Agents even hide themselves or leave the country. Court proceedings won't do any good too, since the agent companies are often "hollow" entities - there are no assets.

Our advice to new property buyers in Bulgaria is to hire a solicitor when they chose which property to buy. They will pay solicitor's fee, but this is well invested money and it will save them a lot of troubles and lost money in the future.

Dangerously ignorant property agents

Property deals during summer increase, so is the greed of property agents. Britons who buy for first time in Bulgaria usually trust property agents as the profession of the property agent is very well regulated in UK. However it is not the same case in Bulgaria.

Legal status of property agents in Bulgaria

Currently anyone can become property agent - they just need a website and an advert on some of the biggest property portals. Enquiries will start coming in a while. In their pursue of more closed deals, property agents shovel the buyers with offers and push them to buy. This is not good for buyers in any case. The agent thinks "that his only job is to connect the buyer and the seller" and possibly hide as much information about the defects of the property as they can. Often they don't explain the conveyancing process, what defect the buyer should watch for etc. The bad thing here is that they often discourage buyers from using solicitors too. The agents want to be self sufficient, as they know that most of the properties sold on the market are full of defects. Involving solicitors would mean thorough property checks and subsequently - less deals.

Why not to trust the property agent 100%

First of all - most of them have limited knowledge of the legal aspect of property purchase/sale. Yes, they follow blindly some conveyancing blank forms (ready made general PoAs, declarations etc.), but if a problem appears most likely they won't be able to spot it and warn the buyer. Notaries also make basic checks (like encumbrances check), but they are not obliged to! Notaries only certify and make sure the will of the parties is to sell/buy and the form of the deed is correct.

Remember that notaries act in nobody's interest. They are not supposed to take any party's side and therefore couldn't defend anybody's interest. They are certification authority only!

Since property agents only "connect parties" and some do conveyancing on behalf of their clients, it is not serious to think that they defend buyer's interest. Their benefit is to close the deal and get their commission, not to defend buyer's interest. Often in our practise we see the consequences of such negligent property agents' work - people buy joint property, which they thought it was a full ownership, the property has illegal construction on it etc. In such cases, the property gets devalued immediately, even more - it causes financial damages to the buyer.

Since the property agent profession is not regulated, there is not indemnification. Agents are not obliged to be insured for damages caused to third parties during their professional work. Agents even hide themselves or leave the country. Court proceedings won't do any good too, since the agent companies are often "hollow" entities - there are no assets.

Our advice to new property buyers in Bulgaria is to hire a solicitor when they chose which property to buy. They will pay solicitor's fee, but this is well invested money and it will save them a lot of troubles and lost money in the future.

Notaries in Bulgaria not aware of the regulation on buying land by EU citizens

It has been half an year since EU citizens are allowed to buy regulated land on their personal names. Initially notaries in Bulgaria, refused to certify deals at all. Their fear was of how one can interpret the EU Accession Treaty if there is no explicit article in the law. By "explicit", I mean one that a 1st grade child could understand and explain. Well, there were no such thing, so notaries were very cautious (groundlessly). I've heard people complaining that notaries have denied certification of regulated land deals even after 1st Jan 2012.

Notaries get instructions

Slowly but firmly, the Notary Chamber have circulated instructions that the notaries shouldn't be afraid to apply the law. Backed up by their professional organisation notaries proceeded and the deals were "unleashed". Nevertheless I still meet notaries who put ridiculous requirements like "the foreigner should declare that the property is his/her second home". It doesn't make any sense. The "second home" rule was bound to the limitation of buying regulated property. Now since the limitation doesn't exist, there is no need to require any information connected to a "second home".

[2016 update] Notaries in Bulgaria now watch for farm land restricted purchases

It appears now the notaries in Bulgaria have established a normal practice to certify title deeds for buying regulated properties by EU nationals. However a very controversial bill has been passed by the government and adopted by the Bulgarian parliament. It basically contradicts Bulgaria's obligation to open its forestry and farm land for buying by EU nationals. There are current restrictions on buying farm land in Bulgaria by EU nationals and even by limited companies established by Eu nationals. All notaries are strictly watching about such facts when they certify title deeds in Bulgaria.. There is a legal loophole to go around this restriction and if you are interested, please email Milen Hristov, our principal lawyer.

Notaries in Bulgaria not aware of the regulation on buying land by EU citizens

It has been half an year since EU citizens are allowed to buy regulated land on their personal names. Initially notaries in Bulgaria, refused to certify deals at all. Their fear was of how one can interpret the EU Accession Treaty if there is no explicit article in the law. By "explicit", I mean one that a 1st grade child could understand and explain. Well, there were no such thing, so notaries were very cautious (groundlessly). I've heard people complaining that notaries have denied certification of regulated land deals even after 1st Jan 2012.

Notaries get instructions

Slowly but firmly, the Notary Chamber have circulated instructions that the notaries shouldn't be afraid to apply the law. Backed up by their professional organisation notaries proceeded and the deals were "unleashed". Nevertheless I still meet notaries who put ridiculous requirements like "the foreigner should declare that the property is his/her second home". It doesn't make any sense. The "second home" rule was bound to the limitation of buying regulated property. Now since the limitation doesn't exist, there is no need to require any information connected to a "second home".

[2016 update] Notaries in Bulgaria now watch for farm land restricted purchases

It appears now the notaries in Bulgaria have established a normal practice to certify title deeds for buying regulated properties by EU nationals. However a very controversial bill has been passed by the government and adopted by the Bulgarian parliament. It basically contradicts Bulgaria's obligation to open its forestry and farm land for buying by EU nationals. There are current restrictions on buying farm land in Bulgaria by EU nationals and even by limited companies established by Eu nationals. All notaries are strictly watching about such facts when they certify title deeds in Bulgaria.. There is a legal loophole to go around this restriction and if you are interested, please email Milen Hristov, our principal lawyer.

Paid health insurance (NHS) contributions will be required upon selling personal property

Restriction to selling property and vehicles

ceretificate from NRA for property deals

A bill, adding new bureaucracy requirements to selling property, has been voted on first hearing in the Bulgarian Parliament. The amendments to the Health Insurance Act and Tax and Insurance Proceedings Code set a requirement that the seller of a real estate property and/or vehicles needs to present to the notary public a certificate from the National Revenue Agency, proving that all outstanding NHS contributions have been paid. If such certificate is not presented or it contains evidence of unpaid NHS contributions, the notary can refuse to certify the deal.

There has been discussions going on in the parliament on this matter. The opposition said that it is a restriction of private property and promised that they will bring the matter to the Constitutional Court for declaring these articles as unconstitutional.

Why (un)paid health insurance is a problem?

Generally speaking it is not a problem. It's the additional document that needs to be presented to the notaries upon selling the property which can complicate the procedure. I have two things in mind that surely will become a problem:

  1. Foreigners are not health insured in Bulgaria, unless they are employed here or they are managers of active trading Bulgarian companies.
  2. Every foreigner who is health insured in Bulgaria has been granted a state number (not personal number of foreigner, but a special number in NRA systems). This is how NRA identifies foreigners. The other way is through their Bulstat numbers.

Ok, so NRA can use the Bulstat numbers to issue certificates. Fair enough. Many foreigners still don't have Bulstat numbers since the agents, who sold them the properties didn't tell them this obligation. If the property has been bough recently, there could be a small fine for missing the deadline. If the period is longer, there might not be a fine.

 Complicating the property sale process

It's understandable that the government what to increase the collection of NHS contribution, but complicating the property sale process is not the way forwards. As a friend of mine pointed out "soon if you don't have a vignette sticker (road tax), they won't allow you to sale your house".

Having in mind the current term for issuing certificates from NRA (e.g. certificate for lack of outstanding taxes), I'd say the property purchase/sale process will be extended with a week or two.

Paid health insurance (NHS) contributions will be required upon selling personal property

Restriction to selling property and vehicles

ceretificate from NRA for property deals

A bill, adding new bureaucracy requirements to selling property, has been voted on first hearing in the Bulgarian Parliament. The amendments to the Health Insurance Act and Tax and Insurance Proceedings Code set a requirement that the seller of a real estate property and/or vehicles needs to present to the notary public a certificate from the National Revenue Agency, proving that all outstanding NHS contributions have been paid. If such certificate is not presented or it contains evidence of unpaid NHS contributions, the notary can refuse to certify the deal.

There has been discussions going on in the parliament on this matter. The opposition said that it is a restriction of private property and promised that they will bring the matter to the Constitutional Court for declaring these articles as unconstitutional.

Why (un)paid health insurance is a problem?

Generally speaking it is not a problem. It's the additional document that needs to be presented to the notaries upon selling the property which can complicate the procedure. I have two things in mind that surely will become a problem:

  1. Foreigners are not health insured in Bulgaria, unless they are employed here or they are managers of active trading Bulgarian companies.
  2. Every foreigner who is health insured in Bulgaria has been granted a state number (not personal number of foreigner, but a special number in NRA systems). This is how NRA identifies foreigners. The other way is through their Bulstat numbers.

Ok, so NRA can use the Bulstat numbers to issue certificates. Fair enough. Many foreigners still don't have Bulstat numbers since the agents, who sold them the properties didn't tell them this obligation. If the property has been bough recently, there could be a small fine for missing the deadline. If the period is longer, there might not be a fine.

 Complicating the property sale process

It's understandable that the government what to increase the collection of NHS contribution, but complicating the property sale process is not the way forwards. As a friend of mine pointed out "soon if you don't have a vignette sticker (road tax), they won't allow you to sale your house".

Having in mind the current term for issuing certificates from NRA (e.g. certificate for lack of outstanding taxes), I'd say the property purchase/sale process will be extended with a week or two.