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Facing problems with off plan property in Bulgaria? - repossession


Repossession:
B) the buyer has already acquired the title deeds but it carries associated conditions relating to the full and final settlement of an outstanding balance owed to the developer.

If you fall into this category then you are in a legally stronger position as you are already the owner. To retrieve funds the developer will have to act upon the conditions of the title deeds and force repossession of the property through the courts.

If you are facing repossession then like any legal challenge you should get independent advice from a professional consultancy or solicitor. First and foremost, the Bulgarian courts are full of such cases, any new addition will take at least 6-12 months to be considered and acted upon, as such it is not something that can happen overnight (at the current time) no matter how clear cut the case. Be in no doubt that if you do owe money and a condition of the deeds states that funds are due to a developer, then the repossession will almost certainly fall in their favour. This avenue should be treated with caution especially if used as a ‘delay tactic’ whilst raising finances elsewhere. In addition, ongoing legal cases in Bulgaria often involve the freezing of bank accounts and assets regardless of the legitimacy of the case. As such, if you are hoping that a looming repossession case will provide you with six more months of ‘free usage’ before you pay up, unfortunately it is likely that the apartment will be physically bolted shut and frozen as a saleable asset until the court settles the matter.

The procedure through the courts will not result in you simply ‘losing the apartment’ or the developer ‘keeping the apartment’, it will result in the forced sale of the property via auction. The funds raised from the sale will then be paid to the creditors; the government is always be the first in line to take any owed taxes etc, in this case the developer will be second creditor and any excess funds will be returned to yourself as the owner.

Be under no illusion that the whole process is hugely frustrating, wildly expensive and rarely according to any preset plan. You should take every measure to avoid having your property repossessed by the courts and as such renegotiation before this stage is absolutely the best course of action.

We have undertaken dozens of successful renegotiations so far in 2009, more so than ever before due to the unprecedented economic conditions. A good number of those cases would certainly have ended in court and considerable legal bills had it not been for a professional intermediary rebalancing the issues and finding a common ground. Some clients might wish to undertake this themselves, although without a deep knowledge of the Bulgarian property market, its laws, the strengths and weaknesses of the various developers, not to mention the language itself, it is an undertaking which is much less likely to succeed.

If you are being affected by the issues discussed above and think we can assist, please contact the author for a free 20 minute consultation; Christophe Gater, New Estate Finance

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