How to ensure the clear legal status of your property

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How to ensure the clear legal status of your property

Postby Admin » Wed Sep 12, 2012 8:51 am

Dear Forum Members and Users,

We decided to open this new topic and place is on the front page of the Forum as the theme, which we will discuss in the following rows, may /or is already/ affecting many of you. As always our desire is to protect your interest from unfair practices of property developers and other third parties involved in the construction process in Bulgaria. Many of you may have experienced problems with developers, who unfortunately due to one reason or another, have never completed the off-plan complexes sold 100% towards overseas investors. In many cases the main problems are connected with the quality of the construction works. But recently a new practice has appeared on the horizon where the main role here is played by banks-creditors of local developers. It is understandable that the current financial crisis has affected both the interests of the debtor (i.e. the developer) and the creditor (i.e. the bank), but in cases where there have been unsettled mortgage relations between them, following the Bulgarian Property Law, already the rights of third parties could be affected. These third parties usually are overseas apartment owners, who have paid in full for their apartments and got already their title deeds for the property, but may have not checked the legal status of the real estate at the time of the purchase, i.e. have not detailed clear legal status in their Title Deeds.

We have already detailed an example of an execution procedure before the local Bulgarian bailiff started by local bank, in the topic about “Pirin Suites” complex /please follow the current link: viewtopic.php?f=6&t=48/ . Due to “blind spots” in the local legislation and technical support of the Land registry sometimes mistakes happen and an owner who has nothing to do with the relations between the debtor and the creditor, may find their apartment suddenly burdened by the bailiff in favor of the crediting bank, but the important thing here is to point to your view that your legal rights should be observed by yourself or your Bulgarian lawyer who is more experienced than you on the Property Law, and of course is able in critical situations to perform immediate actions for protection of your interests. If you are an owner of real estate in Bulgaria and if you have read carefully the above topic about the complex and the actions by the bailiff on behalf of the application of local bank, then one question is already circulating in your mind: “Is my property clear of any burdens and how I can be sure about this?”

Our experience shows that many foreign investors in Bulgaria have used for the completion of their purchases the services of local corporate bodies, intermediaries, estate agents, which are not law firms or law practitioners /according to the local legislation/, which do not have the lawyer’s professional insurance towards clients for damages, and which at the end of the day may have closed business already. Many conveyance companies or real estate agents appeared to be very closely connected with one or more of the local developers, although being expected to be independent, i.e to protect the interests of the overseas property buyers. Such companies are Legal Independence Bulgaria Ltd., Storning Ltd., Platinum Developments Bulgaria Ltd. , Amba Sun Ltd. This is why it is understandable that these have protected more the interest of this developer than those of the individual client. Our investigations back in time in this direction have shown that in some of the cases one and the same people were staying behind both the local developer and some of these “conveyance companies” who may have signed your Title Deed on your behalf, were not this much independent. So here comes the second question you can ask yourself: “How I can be sure that the people/proxies whom I have paid fees to protect my interest have really done everything needed, if they were really unofficially connected with the opposite party?” And the 2nd question occurs: “Have my legal and financial interests been protected and how can I actually check and confirm it?”

We have got many e-mails from overseas property investors, who intend to find out the answers of these questions, but do not have a view of the local Bulgarian legal investigation procedure, taxes and fees. The recent legal actions of local banks who pursue protection of their rights and refund of debts, previously released towards local developers, combined with some concrete shortcomings of the local legal system on the other hand, may harm your ownership, usually without your knowledge, simply because you live abroad, and it is expected that not any local institution should inform you abroad, on your home address in your country. Have you ever received the bill with the annual council property taxes related to your Bulgarian real estate, on your home address in your country? You haven’t, right? Then you should be aware that the local land Register won’t notify you abroad; the local court won’t notify you abroad; the local bailiff may not in some cases notify you abroad; the local tax authorities won’t notify you abroad. You are not guilty about it – it is just another country, and the local legislation still has to switch to globalization. But you need to be aware of it and to manage permanent protection of your rights, by an experienced Bulgarian lawyer who has an access to the investigation instruments, who has a business address where to be used for notifying you, who of course has the professional insurance towards clients for damages, etc.
It has been very usual procedure in the past 5-6 years for many local developer to obtain huge mortgage loans /consider millions of Euros/ by banks for starting and performing the construction of their new off-plan complexes, mostly situated in or near the Bulgarian holiday resorts. When approving these loans the local banks have protected their interests with the rights, given to them by the Law, i.e. by establishing mortgages over the properties. In many of the preliminary contracts, signed in last 4-5 years, it has been clearly mentioned that the developer will transfer the ownership over the apartment to the buyer, clear of any burdens. But it is up to the buyer and his legal representative to check and see whether this is done, and to detail the clear legal status of the property at the time of the purchase, in the Title Deed, where usually the issuance number of the related Certificate for lack of burdens, has been detailed at the end of the Deed together with all other documents. We find sometimes with surprise that some of the overseas investors were never familiar with the fact of existing mortgages in favor of local banks over the purchased apartments and about the need these mortgages to be lifted before the purchase is made.

If there is still a mortgage over the property and you have agreed to purchase the property with this mortgage then you risk losing the property in the future – even if you hold a Title Deed for it. The creditor, who have registered the mortgage on his name, have the absolute right to sell your property on auction in attempt to return at least part of his money. This is why you can’t blame local creditors who have done everything legally possible to protect their legal and financial rights. But you can always do the same. This is why it is advisable, if there is no certificate for lack of burdens, listed in your Title Deed, to contact a Bulgarian lawyer and to obtain one, for your convenience. An experienced lawyer can check the legal status and the legal history of the property and to advise you if you should be safe about the property.

As always we are here for you and ready to answer all your questions. If you need any guidance through the process, do not hesitate to contact us!


Bulgariandeals Team

smurf
Posts: 2
Joined: Wed Jan 11, 2012 10:42 am

Re: How to ensure the clear legal status of your property

Postby smurf » Thu Jan 17, 2013 3:02 pm

Hi

Can you send me the e-mail in which you have a list of lawyers I might approach to tell me the legal status of my property?

Thanks

Sean
lister
Posts: 1
Joined: Sat Feb 08, 2014 2:45 am

Re: How to ensure the clear legal status of your property

Postby lister » Sat Feb 08, 2014 2:48 am

Hi

Could you please also send me a list of recommended lawyers so I may check on the legal status of my property.

Many thanks
Henry
Admin
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Posts: 493
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Re: How to ensure the clear legal status of your property

Postby Admin » Sat Feb 08, 2014 7:14 pm

Dear Henry,

Before we can give you a list of lawyers, who can assist you in checking the legal status of your property, you should give us information where your property is located and information about the name of the developer of the complex. Please provide this information at the following e-mail: support@bulgariandeals.com and we will give you the names of respected lawyers, who are operating in the region of your property.

Bulgariandeals Team


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