The steps during the process

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The steps during the process

Postby Admin » Thu Oct 14, 2010 1:35 pm

Here we place explanation of the process of entering into exploitation of one problematic complex:

The death of the local property market has left to us a number of complexes, which for different reasons were left uncompleted by local developers (most of these emblematic examples of frauds performed by foreign property agents and local developers). In these cases hundreds of foreign investors have lost their hard-earned money in order to turn into owners of properties not entered into exploitation. These owners have been left only with the hope that some day in the future the miracle can happen from itself.
You will agree with us that joining internet actions groups will not achieve actual obtaining of Permission for usage at the Bulgarian Authorities. This is why in the last few months a group of colleagues has worked hard with one of the problematic local developers and assisted to a group of foreign owners in the process of getting Act 16 for their complex. In the following rows we will present their experience.


WHAT IS PERMISSION FOR USAGE (FORMER ACT 16) AND WHY DO I NEED IT?

The permission for usage is the last step of the building process, but the most important – it is a document, confirming that all the previous building documentation is proper, and enabling you per the Law to use the apartment, to live in it, to rent it out, etc. Before they issue this document, usage of properties is illegal. For the last couple of years all king of non-qualified individuals became builders/developers, selling off-plan apartments to foreigners – former bus drivers, housekeepers, non-educated property agents – basically parties who are not able to follow the building provisions and to obtain Permission for usage. The result of their “work” can be found in your Title Deed of ownership, if the Permission for usage has not been detailed at the end of the document (among the other mentioned documents).
So when the building is properly completed, meeting all provisions by the Laws and set-up the related supplies, the governmental inspectors issue Permission for usage – only after this event you may expect proper relations with the local suppliers and making the builder obliged per the Guarantee clauses of the Laws.
When you decide to re-sell your apartment missing the permission for usage, the buyer or their lawyer will definitely ask for this document. So owning an apartment which has no permission for usage is like owning nothing.

STEP ONE – HOW MUCH WILL IT COST US:

Square one in the whole procedure is namely establishing a close connection with more owners as possible in the complex-subject of work. Together with other people who are in the same situation like you, you will be able to exchange information, updates etc. and of course – to collect the needed money for obtaining Permission for usage – not because it is an expensive document, but because so much of the previous steps in the building process have been legally skipped by the builder so you will have to re-take these again in order to supply yourself with the various information needed for obtaining Permission for usage. All people should realize that in all cases the completion of their complex is connected with making additional expenses. These expenses depend normally on the build-up areas of the apartments, i.e. the people with bigger apartments have to participate in the process with bigger sums, this is the fair way for everybody.

STEP TWO – WHO WILL SUPPLY US WITH THE NEEDED DOCUMENTS:

The 2nd step is establishing permanent communication with (the) local developer. This is one of the hardest parts in the whole process, because many of the local developer with such problems have vanquished already and it is hard to find them at their address of registration. Sending e-mails, making phone calls to all known contacts of the developer may be very useless. Note that entering into exploitation of a complex with 100+ apartments is not an easy job, so in all cases you should have a professional representative in Bulgaria, who will be your “eyes” and “ears” here and who will be able to give you information from the source (the so called first hand information). If the current developer is unreachable, then hiring of another building professional is needed to complete what has been left undone.

STEP THREE – WHAT IS THE CURRENT STAGE OF COMPLETION?:

The third step has two faces – the one is making an inspection of the complex. The group or the representative of the group in Bulgaria should visit the complex to see what is the current condition of the complex. You should bear in mind that complexes, located in winter resorts like Bansko and Pamporovo, which are left abandoned for one or two year, have suffered severe damages due to the heavy winter conditions, so the governmental inspectors will not allow issuing of Permission for usage easy. On the basis of the inspection the group of the owners in cooperation with representatives of the developer can prepare a list of all additional construction works that have to be performed before the developer can apply for Permission for usage from local authorities.
The other job needed to be done is to find out where are the originals of the whole building documentation – there are some questions that could be answered only once this is collected and examined.

STEP FOUR – HOW WE GET THINGS DONE?

On the basis of the list of additional works needed both parties (the group of owners and the developer) have to sit down and agree two kinds of contracts to be concluded. The first one is the contract for construction works. Before the developer can request from the local authorities Permission for usage for the complex, the complex must be repaired (if needed). The group of owners should perform something like General Meeting, where all have to agree what is the amount of money that each owners has to pay for reaching the final goal. This amount of money is normally based on the build-up area of the apartment of each single owner. This amount also depends on the offer of the developer to perform the repairs. Problem local developers claim that they have no money to perform these construction works and request the needed sum from the owners. The total sum together with the list of works is included in the mentioned contract.
The second contract signed is contract for obtaining Permission for usage by the professional builder on the base of the performed needed finishing works and the collected building information. Normally the total sum agreed between the parties is divided between the two contracts. This means that owners pay half of the sum at the beginning of the construction works and the rest of the sum- when Permission for usage is obtained.

The steps described above may look very simple but these are actually connected with several months of hard work by professionals and include meeting with the developer, all day correspondence with owners, preparation of contracts, changing and agreeing clauses, checking if the developer is performing their obligations per the contracts.


Bulgariandeals Team

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