What can I do if my developer is claiming insolvency

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What can I do if my developer is claiming insolvency

Postby Admin » Tue Nov 20, 2012 10:34 am

The solution of this very often problems is different depending on whether you have already signed the final act /the title deed/ or not.

In this case and provided that your lawyer had insured that you were transferred the right of ownership free of any encumbrances (including mortgages and rights of third parties), your property is safe and possible insolvency proceedings do not jeopardise your ownership over it.

However, if your purchase is still at a preliminary contract stage and you have not been transferred the title, legally you do not own the property. The owner is still the seller/developer /or third connected party that may have received the ownership/, who has only undertaken the contractual obligation to transfer you the title. In case of insolvency proceedings, you would be transformed as a creditor of the seller and entitled to claim your paid installments in the insolvency process. The aim of the insolvency is to gather and then dispatch between the creditors (according to their rank and privileges) all assets the seller’s company owns. After the local court announces your developer as insolvent all creditors of the company /including all buyers who have paid for their apartments, but never got their deeds/ have a short one month period to register their insolvency claim before the trusted assignee, appointed by the court. The insolvency claim should be supported with numerous payment documents, showing that you have really made payments to the developer, but never received title deeds. Depending on the clauses of their contracts, each creditor can eventually claim penalties due to the non-performance of the developer.

Note that the terms to bring the claim for your taking in the insolvency proceedings are limited. In addition, the insolvency proceedings are complicated and long-lasting and require full and dedicated legal assistance. The terms set forth by law regulating the insolvency proceedings are binding and it is important to comply with them. Therefore, it is highly recommendable to engage an attorney-at-law that would represent you and protect your interests in those proceedings.

Bulgariandeals Team

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