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.