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Questions answered on subjects such as notaries, land ownership, power of attorney and search of title procedures.
Do I need to consult with a solicitor?
No. Generally you do not need a solicitor.
Who is your solicitor?
Imperial Developments cooperates with a number of well established and responsive legal advisors around the country. It’s our obligation to assist you in this matter.
What is your procedure for search of title? When we buy the land we are building upon, we make a thorough investigation of the title of the seller and of any preceding owners for the last ten years (ten years is the maximum duration for which ANY third party claims over the property are precluded). This is fairly easy to do, as all claims that can be opposed to a good faith possessor of a property must be registered with a designated authority. Before we purchase any property, we check with this authority if the previous owner (or some of his predecessors) have mortgaged the property, sold the construction rights (see below) or had a court claim filed against him for that property etc. If no claim is registered against him then no such claim can be held against us and subsequently against you.
Similarly, you can make such verification of our title of the apartment we are selling to you. If we have mortgaged your apartment, sold it to someone else before you, etc, this would be registered under our name in the Registrar. If there is no such registration on our name for your apartment, you can be certain that there are no encumbrances over it.
The papers that the due diligence requires in search of title are the Notary deed (as well as the Notary deeds of any previous owners for the last 10 years), scheme of the land plot which accompanies it, Liens and Encumbrances Certificate (Issued by the Registrar described above), certificate from the State and Municipal authorities that the property is not registered as being in their possession and Certificate from the State authorities that there are no claims for that property filed in pursuance of the Restitution legislation (for restoration of property seized by the state during Communism) and construction permission. We seek to obtain all of these before starting to build and can produce them to you before the sale takes place. Actually in order to conclude such a sale the public notary will ask them to produce to him.
Do I own the land the apartment is situated on? No, currently foreigners cannot own land in Bulgaria. However there is no limitation to own rights over it, which according to the Bulgarian law can be separated from the ownership. Thus, you may own the ‘construction right’ – superficia, which entitles you to build the land and subsequently to own the building being built indefinitely. If you buy an apartment, i.e. part of such building, you will own part of the respective construction right. For all practical purposes the owner of such right enjoys the same status as if he or she possessed the land, while the owner of the land which is built upon, remains with a title, denuded from substantive content.
Further on, if a foreigner insists on having title over the land as well, he can establish a sole man company in Bulgaria. All companies, incorporated within the country are considered local, no matter the personality of the shareholders, therefore a company with capital 100% possessed by you may acquire land with no limitations whatsoever.
Is the purchase freehold or leasehold? By the Bulgarian law once a person becomes an owner with a notary deed, he/she is also the owner of the infinite constructional rights. Must I arrange my own notary in Bulgaria as I have no idea who to use?
By Bulgarian law, a notary within whose jurisdiction the property is located must be used. There are many notaries along the coast.
The notary deed can be signed personally by you or someone else who can sign on your behalf with power of attorney (above).
I do not wish to travel to Bulgaria. Can Imperial Developments look after this matter?
If an investor chooses not to go to Bulgaria upon signing of the notary deeds, the investor can choose use the power of attorney provided by Imperial Developments.
What is the Imperial power of attorney procedure?
Imperial Developments will send you a POA document prepared by independent Lawyers in Bulgaria, this document then needs to be Notarized by your local Notary. Once we receive this document back along with any Management/Rental Contracts we will send it to the Dept of Foreign Affairs (Eire) or Foreign & Common Wealth Office (UK) or similar in other Countries to get Apostiled. Imperial Developments cover this cost for this transaction. Documents are validated and sent to Bulgaria to book a time slot with the Notary to close and register relevant declarations on your behalf. This ensures the Customer does not have to travel to Bulgaria to close in person. Title documents and keys will be DHL’d to Customer typically within 4 weeks. The cost of this service is roughly 5%.
Are there any restrictions on the resale of the apartments in the future?
There are no restrictions.
Is the property bonded?
No, the property is not bonded. It is highly unusual for any residential property to have a bonding in Bulgaria. Stage payments are the most common form of payment.
I assume that the legal right of ownership is indefinite, that is there is no time restriction like leasehold right?
The ownership is indefinite. Banks are very comfortable with the title ownership rights of Bulgarian projects and that is why interest rates have dropped from 18%-7% in the last 2 years.
Can I open a bank account in Bulgaria?
Yes. Bulgarian non nationals can open bank accounts in any currency. They can also freely repatriate any money that they have invested in such accounts.
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