If you are an owner of a real estate property in Bulgaria and you are thinking of reselling it, there are a couple of questions you should consider prior to advertising it for sale:
1. Who are the owners of the property as per Bulgarian Regulations? Whose name is on the title deed? Are there any joint owners?
Let’s say you bought an apartment five years ago with your only name stated on the title deed. However, if you were married at the time of buying the property, your spouse automatically became a joint owner, unless you had a special marriage agreement or separate matrimonial property regime in effect.If matrimonial regime of community of property is applied to spouses, which is the common case for most couples, your partner gets 50 % of the property even their name is not on the title deed.
Hence: You cannot sell without an explicit written consent given by your spouse. Both of you will inevitably be involved in the resale procedure.
Let’s say you bought the apartment with a friend of yours and you see only two names on the deed. Now imagine that both of you were married at the time of the acquisition of the apartment. That makes four people involved in the resale and each of them will have to prepare a certain set of documents (declarations or power of attorney, if necessary)
2. Do you have a BULSTAT number?
Since 2005 any foreigner owing a property in Bulgaria must be registered with the BULSTAT Register at the Registry Agency within seven days from obtaining their title deed.
Generally you will be fined, if you have failed to complete your BULSTAT registration in time.
If you purchased your property after the date specified above and you still don’t have a BULSTAT number, you cannot resale your property. The reason is the following: The Bulstat number is a precondition for the tax declaring of the property and payment of annual taxes. So here comes the next question:
3. Have you paid your property and garbage taxes?
Each property owner has an obligation to submit a tax declaration within two months from obtaining ownership of the property. You cannot submit the declaration without having a BULSTAT number. The annual property and garbage tax is determined on the bases of what circumstances have been declared in your tax declaration. So here we come to the first major condition for a resale of a property.
You cannot resale unless your property and garbage taxes have been paid up to date.
4. Have you paid maintenance fees and utility bills for the apartment?
This is not a compulsory precondition as per legislation but as per our practice it is an essential one and may be curtail for the success or failure of a resale.
If you have any liabilities to a maintenance company or to the electricity or water companies, you don’t transfer your liabilities to the buyer by transferring title of the property. The liability stays yours and the relevant companies are entitled to chase you for those liabilities.
On the other hand, buyers are very suspicious nowadays and in most cases they make a thorough survey of the property and of all liabilities related to it before buying it. As the supply at the resale market is abundant, buyers are in a much favourable position, and of course they avoid involving in deals where there are outstanding maintenance fees and utility bills.
5. Have you been registered with the Cadastre Agency?
A further condition for the resale is for the seller to be registered as a property owner with the Cadastre Agency and to have his/her property duly registered in the cadastral map. The resale procedure starts from obtaining an up to date layout of the property from the Cadastre Agency.
Of course, in most cases owners hire solicitors or agents to represent them in the resale and to arrange the obtaining of the necessary documents. However, be advised that even the best law firm cannot organize a resale procedure within two weeks time if the entire procedure is to start from the very beginning. The obtaining of each document and the completing of certain registrations depends on municipal and state administration authorities as well, which are generally slow and it is therefore highly recommended that you arrange all this issues before a buyer turns up.
6. Who will pay notary fees and transfer tax?
Property owners know that transferring of title is connected with further expenses – notary fees, land registry fee, local tax (transfer tax). These expenses are relatively high (approx. 3% – 3,5% of the purchase price) and may amount to a couple of thousand euro depending on the sale price.
They are generally covered by buyers but it is very often that vendors offer splitting of notary expenses to make their offers more competitive and attractive. In any case, it is recommended that this item is discussed between buyer and seller before the actual transfer of ownership and should be taken into consideration while determining the sale purchase price.