Bulgarian Legal Advice | Due Diligence in Bulgaria

So what does Bulgarian Due Diligence actually mean?

Due Diligence in Bulgaria is a complete check of all documentation concerning a development, for example, title deeds, searches, building permissions and so on. Things to look out for include:

Does the vendor or developer own the land in Bulgaria?
Have all the building and planning regulations been complied with?
Are there any mortgages, charges or encumbrances attached to the land?
Are there any defects on the title?
Are the monies paid over protected by bank guarantees?
Bulgarian legal system, language, culture and currency, as these can all cause problems!
Is the vendor/ developer officially registered?
Who has the necessary authority to represent the vendor/developer?
Will planning consent be forthcoming should you decide to alter the property?
Is the property in Bulgaria subject to pre-emption rights, meaning that certain persons may have a preferential right to purchase over your own?
If the developer is a legal entity (ie, a company), it would be wise to check that the company is duly incorporated and solvent, and who its authorized representatives are.

How does it affect me when I buy a property in Bulgaria?

This gives you complete peace of mind that your investment in Bulgarian property is safe! Never sign any contract or pay over any money unless it has been cleared with our independent lawyer first. If a deposit must be paid, ensure that a written reservation contract is signed stating that the sums are refundable to you should you decide not to go ahead.

How will I know whether my legal representative has actually undertaken it?

All areas are summarized via reports and legal documents obtained by your independent bulgarian lawyer. A prudent lawyer would carry out the following checks:

Verify that the property in Bulgaria belongs to the vendor, or that the vendor has legal authority to sell it.
Ensure that there are no tenants in the Bulgarian property. Long-term tenancies can be protected.

Due Diligence gives you complete peace of mind that your Bulgarian investment is safe

Check that there are no pre-emption rights over a property in Bulgaria and no plans to construct anything that is adverse to the property's value or use of the property.
Check that the boundaries and measurements in the contract are accurate.
Ensure that all building permits and planning permissions are in order, that the developer has a building license and the property is being built in accordance with the plans.
Check that there are no encumbrances, mortgages or loans on the property or outstanding local taxes, community charges and so on.
Revise contracts and negotiate amendments should it be necessary.

What will it cost me?
The amount of fees and taxes payable upon purchasing bulgarian property vary depending on the location which you are buying in Bulgaria.

Due Diligence is your safety net, especially in Bulgarian market

Bulgarian legal fees of up to 0.5%
Notary's fees - 1%
Deed registration fees (stamp duty) - 2%
Bank charges on transfers, issuing cheques, etc.
Surveyor's fees (optional).
Estate agent's fees - these are normally paid approx 3% of the sale price.
Utility setup fees: gas, electricity, water, refuse, community and so on.
When taking up a mortgage, fees will be due on the mortgage deed for notary, property registry valuation, property insurance and so on.

Remember to always get professional tax advice before proceeding with a purchase in Bulgaria.

Can a Bulgarian legal representative do my Due Diligence, or does it have to be an English solicitor?

An English lawyer would not be able to interpret Bulgarian legal documents as these vary in each country, which is why a specialist like British Developments. Centre employs lawyers from across Bulgaria, speaking fluent English. Whichever lawyer you choose when buying, ensure that they have full knowledge of legal issues.

Complete Bulgarian Legal Advices

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