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New Laws: Bulgarian Apartments

Important New Laws: Bulgarian Apartments and news for property owners (apartment blocks, residential complexes and gated communities). In a couple of days time, on 1 May 2009, the overdue new Act on the Management of the Condominium Ownership (the “Act”), adopted on 13 January 2009 by the Bulgarian Parliament will enter into force. At the same time, the relevant section in the existing Ownership Act 1951, regulating the main principles and provisions in respect of the condominium ownership went through significant amendments, which will also enter into force on the same day.

As you will observe in the present article, the Act is finally taking account of the changes that have taken place in the Bulgarian real estate market and residential construction for a period of almost sixty years, since the notorious Ownership Act and the Regulation on the Management, Order and Control of the Condominium Ownership (the “Old Regulation”) were adopted in 1951. It comes to replace the old, completely inapplicable and inadequate rules of these two legislative acts, but while some of the advantages and disadvantages of the new Act can be seen at first sight, its practical use and applicability will be evaluated only in due time.

The new Act is significantly larger than the Old Regulation and it will be virtually impossible to analyse its entire content in the present article. Therefore, we shall cover the matter in two parts: in the first part we shall outline the main differences between the new Act and the Old Regulation, and in the second part we shall introduce the new most significant provisions.

Main improvements in the new legislation:

1.    The general obligations of each unit owner in a building, which is a condominium ownership are explicitly provided in a separate clause (Art. 6 of the Act) and in a much more detailed fashion (17 items), which allows for significantly more efficient direct application of the law in each specific case. Previously, it was very difficult to ascertain whether someone’s actions can be treated as breach of the rules on the condominium ownership, particularly if the person in question may be held responsible, because of the very vague formulations of the Old Regulation.

2.    The right to force an owner to leave its property, if such owner does not comply with the adopted resolutions of the General Assembly of Owners or violates the Internal Rules Order of the condominium ownership. This has been curtailed and restricted to the more realistically enforceable right to impose an injunction on the owner for up to three years forbidding him to access the property. Obviously, the legislator has sought some balance between the ownership rights of the defaulting owner and the entitlement of the rest of the owners to undisturbed use and good order within the condominium.

3.    The mayor of the local municipality or region where the building is located is delegated the function to call a General Assembly of the Owners upon the written request of the owners of at least 20% of the common areas, if this should be the first General Assembly to take place or in case the Manager/Management Board have failed to do so. The idea behind the rule is probably the position that the well-being of the condominium ownership is a matter of local significance and involving the mayor’s functions in it is another way to regulate the condominium ownership more effectively. Read the second part of this article to find out more about the mayor’s new functions.

4.    The set of rules for delivery of invitations for calling a General Assembly, provided in Art. 13 of the Act, is now a little more precise, more detailed and completely waives the possibility of an owner to be summoned at a different address, thus hindering the procedure. The provision is strict and stipulates that:
- the invitation is delivered at least 3 days or in urgent cases at least 24 hours prior to the meeting;
- it is placed at a location visible and accessible by all in the common area of the building;
- to be considered duly delivered, the invitation must be handed over to every owner, to an adult of his/her household or to another occupant in his/her apartment in the relevant building. The delivery is evidenced through the signature of the relevant person;
- if the owner is missing or refuses to accept the invitation, it is considered delivered if affixed to the front door of the owner's property. The reasons for this alternative delivery, as well as the date and hour of the affixing of the invitation must be stated in a special protocol witnessed with the signature of the delivering person and at least one other owner or occupant.
- Beware that unless it is urgent case, the General Assembly may not be called during official holidays and, note, between 15 July and 15 September.


This improved procedure of delivery implies that every owner is personally interested in his property, even if he does not live there, and aims to prevent owners from objecting to the validy of a meeting of the General Assembly on the grounds that they had not personally received an invitation at their own address(es).

5.    The manner of empowering third persons to represent an owner is now explicitly provided to avoid confrontations and objections. It is simple and quite appropriate:
- a relative or a co-owner of the property may represent the owner on the basis of a Power of Attorney furnished in writing;
- a third person, not related to the property must be empowered to represent an owner  on the basis of a Power of Attorney furnished in writing with the notarised signature of the owner.
Note that one proxy may only represent up to three different owners according to the Act.

6.    There is a very important amendment, introduced in the Act, which from our professional experience may be evaluated as a problematic issue benefiting only big investors and developers at the expense of small owners:

From 1 May 2009 the owners from the condominium ownership will have votes proportionate to their respective shares of the common areas.

Thus, a developer, which has failed to sell its apartments (which is not so uncommon in these times of economic and financial crisis), may gain great advantage and will control the rest of the owners through its own decisions. This unjustified and unbalanced power arises from ownership of ideal shares from areas designated as “common” - precisely because they are for common use and all of the owners have to make use of them.

7.    A qualified majority of votes is required for adoption of three types of decisions (as an exclusion of the general rule for adoption of decisions with an ordinary majority of more than 50% of the votes):
- unilaterally – when decision for construction of new objects or for creation of construction rights or rights for use to third parties is adopted;
- more than 75% majority – when a decision for extraction of an owner is adopted, in this case the required quorum (see below) is obligatory;
- more than 67 % majority – when a decision for renovation or basic repair is adopted, in this case the required quorum (see below) is obligatory