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Buying Bulgarian Property: Advice

There have been tales of woe about Bulgarian property developers and off plan purchases in the country, many of which have unnecessarily heightened concern amongst buyers. The problems mainly revolve around off plan property purchases and the difficulties frequently stem from the Preliminary Contract which buyers have signed. Are these problems really all the developers' fault and how can these pitfalls be avoided when buying in Bulgaria?

In Britain, going to court with a case against a developer, or trying to pull out of a contract, for reasons such as

- losing your deposit money because you cannot get a mortgage, when this was not a criteria in the contract, or
- the banks now won't lend you what you want, or
- you have signed a contract without understanding it and you now realise you don't like it, or
- the pound has gone down against the euro and the property will cost you more now than you thought

... would be impossible to win.

Why do so many people think it should be different in Bulgaria?

There are potential difficulties with any overseas property purchase, some of which may be particularly exacerbated by the current economic climate. Developers may not be able to complete their project on time (this could potentially be an advantage if you need a mortgage, allowing time for current tight lending to ease), or not finish the development at all. However, not everything is in the hands of the developer. One factor springs immediately to mind; the fall in value of pound sterling.

Buyers themselves can sometimes be their own worst enemy in the excitement of their dream home or how much money they can make from their investment. Many of the problems which are occurring now can be traced back to basic property buying rules which were not followed before handing over money and signing contracts.

Did you get an independent lawyer to check your contract, or get a registered translator to translate it into your mother tongue, so that you could find out what it said and understand its implications? Did you get an offer in principle from a lender when completion is another year away but did not check if the offer was only valid for 30 days? Did you read the contract to see that mention was made of facilities, such as use of spa centre? Did you verify the penalties for delayed completion? Was a clause included that the purchase was dependent upon your obtaining a mortgage?

These are things which buyers would naturally do in their own country, so it is even less understandable as to why buyers would go ahead and hand over money or sign contracts on a Bulgarian property purchase without exercising caution and thoroughly checking everything.

Whilst this is cold comfort for those who find themselves in the unfortunate position of now being in difficulties with their purchase, or are truly on the receiving end of a rogue developer / agent, it can serve others to help them avoid potential pitfalls in a Bulgarian property transaction.


Five golden rules for a successful Bulgarian property purchase:

1. Get your own independent lawyer and get a registered translator. Never sign anything which you don't understand. Do not part with any money until you understand the preliminary contract.
2. If buying off plan make sure the developer has building permission, without this there is no project and nothing to buy.
3. For off plan, check out the developer, previous projects and customer references. Get a "letter of goodstanding".
4. Whatever you are purchasing, check your preliminary contract thoroughly. Get it translated by a registered translator and get it verified by your own independent lawyer. Never sign anything which you do nt understand.
5. If you are obtaining a mortgage in order to buy the property, insert a clause into the preliminary contract stating that the purchase is dependent upon this. You may need to include a list of which banks you will apply to, a timeframe for your application to be lodged with them and the max % interest rate you will accept, also that the developer / agent is allowed to apply to banks on your behalf for a mortgage within those criteria. The criteria must be realistic, for example, three banks, two weeks to get the application in and a suitable interest rate for that point in time. Then, if you cannot get the mortgage, a letter from the banks with their offer which is outside the criteria in the contract, or a letter with their refusal of the mortgage, can be used to bring into effect the suspensive clause.

Related Articles with further information and advice for those considering buying Bulgarian property :

Legal - Bulgarian Property Facts
Legal - Did you Read Your Contract?
Member Area - Top Ten Buying Tips
Property - Avoiding Buying Pitfalls