Foreigners interested in buying property in Bulgaria often look at two types of real estate: apartments in seaside and mountain resort towns, and rural houses. The process of purchasing these properties can differ based on the type of property.
- Seaside and Mountain Resort Properties: In this case, properties are often part of large complexes where a management company takes care of the property, including handling mail, notices, and other administrative tasks.
- Rural Properties: For rural properties, the situation is different. The foreigner typically manages the property independently, with possible assistance from neighbours. However, the purchase process for real estate with land can be more complex.
Purchasing Property with land in Bulgaria
When a foreigner buys property with land in Bulgaria, it is registered under the name of a Bulgarian trading company, which is owned by the foreigner. It is common for the foreigner to register a Bulgarian company and the newly established company to have a registered office at the location of the property itself.
However, this can lead to complications if the foreign owner does not live permanently at that address. In some cases, unscrupulous individuals may take advantage of this situation, potentially leading to the foreigner losing ownership of the property.
Common Scheme for Property Fraud
In case of disputes between legal entities, Bulgarian law provides for an expeditious court procedure, whereby if the company debtor does not object to the filed claim against it, the court directly issues an enforcement order against this debtor.
A typical scenario is when a company, let’s call it Company “A,” claims that the company of the foreign investor has dent and owes them payment for a contract or invoice. In some case Company “A” does not need to prove this in court, and if no one appears and/or objects, a writ of execution may be issued against the company of the foreign investor, leading to a public sale of its property. In this case, the property may be purchased by an insider, resulting in the loss of ownership for the foreign buyer.
Legal Notices and Risks
Under Bulgarian law, legal notices, including court documents and notarial summonses, are sent to the registered address of the company in the Trade Register. If the company owner has moved and failed to update the company’s address, any legal notices will be considered duly served, even if the owner never receives them.
To avoid this risk, it is strongly recommended that the registered office of the company is a real, operational address, where a trustee is available year-round to receive legal documents. This ensures that the property owner is informed promptly about any legal actions, allowing them to protect their rights and prevent property loss.
Legal Recourse in Case of Property Loss
If your property is unlawfully seized, you have the right to defend your ownership in court. The exact legal steps depend on the situation, but they may involve proving that the claim against your company is invalid or rescinding any fraudulent transactions.
Even if the property has been sold to a third party who acted in good faith, you can still pursue compensation for the loss.
Immediate Action and Legal Measures
If your property is unlawfully taken, quick action is crucial. One way to protect your property while legal proceedings are underway is through a legal institution called “security for a future claim.” This tool allows you to freeze the wrongdoer’s bank accounts or foreclose on their property, including any property they may have unlawfully acquired. This helps preserve your property while your legal case is ongoing, and, if successful, you can recover your rightful property.
Reporting to Authorities and Seeking Justice
In addition to taking civil legal action, it’s important to report the scam to the prosecutor’s office. The authorities are responsible for investigating and prosecuting criminals. Criminal proceedings are separate from civil lawsuits, with the primary aim of punishing the wrongdoers.
Through civil proceedings, you can seek the return of your property and potentially obtain compensation for any damages you have suffered.
