The notary public will also check the identity of the seller and buyer and authenticate your power of attorney documents. This stage can usually be handled by your estate agent or lawyer if you’ve given him power of attorney. If you’ve used an estate agent to draw up the preliminary contract (which is common practice for off-plan purchases), this service should be included in his fee.
Your lawyer should now carry out the necessary checks on the property, including verifying the authenticity of title documents, making sure licences and permissions are in order, ascertaining whether there are any debts on the property and observing the terms of the contract. This process can take three to four weeks.
Final Checks
Property is sold on the condition that the buyer accepts it in the state it’s in at the time of completion, so you should be aware of anything that occurs between the signing of the preliminary contract and completion. It isn’t unknown for vendors to remove all the fittings – or even the boiler!
WARNING
Before signing the final contract, it’s imperative to check that the property hasn’t fallen down or been damaged in any way, e.g. by a storm or the owners.
If you’ve employed a lawyer or are buying through an agent, he should accompany you on this visit (the previous owner should have already vacated the property). You should check off an inventory of the fixtures and fittings and anything that was included in the contract or purchased separately, e.g. carpets, light fittings, curtains or kitchen appliances, and make sure that they’re present and in working order.
This is especially important if furniture and furnishings (and major appliances) were included in the price. You should also ensure that expensive items (e.g. baths, basins and kitchen fittings) haven’t been replaced by inferior ones. Any fixtures and fittings (and garden plants and shrubs) present in a property when you viewed it should still be there when you take possession, unless otherwise stated in the contract.
If you find that anything is missing, damaged or isn’t in working order, you should make a note and insist on immediate restitution, such as a reduction in the amount to be paid. In cases such as these the notary can withhold an appropriate amount in escrow from the vendor’s proceeds to pay for repairs or replacements.
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You should refuse to go through with a purchase if you aren’t completely satisfied, as it will be difficult or impossible to obtain redress later.
If it isn’t possible to complete a purchase, you should consult your lawyer about your rights and the return of your deposit and any other funds already paid.
Signing the Notary Act
Signing the notary act (sometimes referred to as the notary deed, purchase contract or final contract, which is equivalent to a title deed) is the final step in taking ownership of your property. If you’re unable to be present at the signing, you can have your agent or lawyer sign it on your behalf if you’ve given him power of attorney.
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You should always sign the notary act in person if you’re buying a brand new or off-plan property, to make sure that all the requirements of the preliminary contract have been met.
The signing of the notary act takes place in front of a notary public, who first checks that all the conditions contained in the preliminary contract have been fulfilled. It’s normal for all parties concerned to be present when the final contract is read, signed and witnessed by the notary, including the estate agent, developer (for new or off-plan property), your lawyer and your translator.
Either party (buyer or seller) can give a representative power of attorney. In the case of an off-plan purchase, the final contract isn’t signed until building is complete.
Payment
To make payment of the final amount to the seller it’s preferable to have a bank account in Bulgaria. That way you can transfer the money from your home country to your Bulgarian currency (or local euro) account and withdraw it when you’re in Bulgaria. It isn’t advisable to carry large amounts of cash into Bulgaria (or anywhere for that matter!) and you must declare any amount over 8,000 lev (€4,000) in cash or its equivalent.
Most sellers will be unwilling to accept a payment from your home bank account, as they will usually have to pay a fee for receiving a foreign currency and may be at the mercy of foreign exchange rates. Some sellers will ask for the final payment in cash (usually for smaller amounts), but most will accept payment in the form of a bank transfer, telegraphic transfer or bank draft from a Bulgarian account. If you cannot be present at the signing of the final contract, you can authorise your lawyer or another agent to transfer the money on your behalf. In the case of an off-plan purchase, payment is made in stages.
Registration
When the notary act has been signed, your property must be registered with various authorities. The registration process depends on whether the property has land or doesn’t (e.g. is an apartment).
Occupancy Permit
All new property (including off-plan purchases) must be issued with an ‘Act 16’ (or ‘Akt 16’) certificate – sometimes referred to as an occupancy permit – by the municipal authority. Under Bulgarian law a property isn’t complete until is has been granted an Act 16 certificate, which confirms that the building has been ‘finished’, i.e. that all electricity, plumbing, insulation, walls, doors and windows have been installed. Your builder or the developer organises the Act 16 certificate.
An Act 16 certificate isn’t to be confused with an Act 15 certificate, which is issued when the basic construction is finished (and usually coincides with one of the stage payments in an off-plan purchase). This does not constitute an occupancy permit.
It’s highly recommended that you write a clause into the preliminary contract that you won’t pay the final instalment on a property until the Act 16 certificate is granted (most reputable developers will include this anyway). That way there is a financial imperative for the developer to complete the project – and you aren’t paying for work that hasn’t been completed.
If you’re buying off plan, the Act 16 certificate must be issued before you sign the notary act, as ownership of an unfinished property cannot be legally transferred.
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Despite what you may hear, it’s illegal to live in a property that hasn’t been issued with an Act 16 certificate.
This article is an extract from Buying a Home in Bulgaria
from Survival Books.