Legal Actions Against Developers In Bulgaria

With recent reports for the problems that some of the foreign buyers strike on The Bulgarian real estate market, it is time to remind all Bulgarian property buyers about potential dangers and help those who have fallen into this trap.

The number of property-related cases in Bulgaria has jumped significantly this year – many of which involve off-plan sales. During the last year many British and Irish investors suffer from breaches in the Preliminary contracts concluded with building companies in Bulgaria. Our law office have already been involved in several court cases concerning off plan purchases. We have cases lodged against developers all over the country, especially in Bansko and The Northeast Bulgaria who cheated their Buyers or did not hand over projects on time or have not even started building due to a lack of planning permission or financing. It appears that many of the Developers blaming the economic climate did not honor their agreements with the Buyers.

If you decide to take legal action against the Developer you should be sure foremost that you have a dully signed contract and legal ground for its termination and eventual institution of a lawsuit. In most cases, the contract is simply not detailed enough to protect the Buyer. No clauses demonstrating what will happen if the Developer does not deliver the property on time and fails to fulfill his obligations are included. Frequently, it turns out that communal facilities such as swimming-pools, Jacuzzi and sauna are not used free of charge despite of the opposite promises of the Agents and the Developers. Buyers often feel cheated by the real estate agents or the Developers and the polished brochures and the information published on the complexes official sites. However these are not proper information that can be count on but just a marketing tool for successful sales. It is the contract which determines whether the use of these facilities is included in your purchase or not - not the ads.
The key to making sure you get everything you believe you should when buying your off plan Bulgarian property is the contract. Go into the details of everything, even such things you may consider insignificant.
Hiring a Lawyer at the initial stage of your investment may be a crucial step. However your lawyer is unlikely to know what has been "promised" on the personal meetings you had with the Agent or the Developer. For that reason you shall read the contract carefully and ask your Lawyer to insert clauses which protect your interests. It may seem strange but we have had many clients who have not gone through the contracts themselves and when the problems occur they cannot go by the Bulgarian Law.

Secondly, you should have full record of all official documents concerning your purchase at home. Details are very important at the stage of preparation of your claim and any official document shall be carefully reviewed by your Lawyer: Reservation agreement, Preliminary contracts, Annexes to it, bank transfer excerpts, receipt for cash payments and etc. It is highly recommendable to pay the installments only in the manner specified on your contract, or in a dully signed Annex by the parties drafted after the contract signing. Emails not being authenticated with electronic signatures and phone conversations with Agents and Developers, without having any witnesses of that, cannot be taken for evidence in virtue of the Bulgarian Law.

The preliminary investigation of your case giving you all legal options for acting is not an expensive service and can give you clear idea of the prospective you have. Once your Lawyer reviews your files he will give you his position for the chances you have to get your money back.
Before bringing an action against the Developer you have one last chance to claim your money back by sending a notary invitation to him. By doing this you invite him to refund you the sums paid under the contract and/ or the penalties due voluntarily by giving him an exact term. Frankly speaking this tool is not much effective but some Developers want to keep their good name and refund Buyer’s money.
If you plan to be a party in a lawsuit in Bulgaria you should know some essential facts:
1/ Typical lawsuit in Bulgaria lasts between 1 and 2 years, so that you have to be patient.
2/The legal system in Bulgaria is now constituted by 2 court instances. If, after the first court instance, any party appeals against the court decision, we will have to defend your rights on the second (Appeal ) court .
3/ The court fees are collected on the base of the price of the claim for each instance. On money claim, the price of the claim is the demanded sum. The state fee for the first instance is about 4,5 % over the sum in claim, including the fee for security of the claim. The claims for interests and penalties are added to the demanded sum. The actions on the second instance will cost you approximately half of the expenses paid on the first instance.
4/ If you hire an experienced Lawyer he will make a preliminary survey on the property possessed by the Company of the Developer and secure your claim by imposing an interdict or distraint over the property owned by it. In order to start a successful case your lawyer has to receive a preliminary decision by the court to freeze some of the assets of the developer. Without such action there is no point to go to court because at the end if you have a positive court decision there won’t be assets left from which to get your money.
5/ The more you hesitate what to do and wait for any out-of-court resolution, the less chances you have. The chances to refund your money are good as long as the Developer has assets. If other Buyers are more resolute they can freeze all the assets the Developer possesses and nothing can be left to satisfy your claim.
Finally, we would like to calm you down that there are a huge number of people who are facing problems on the Bulgarian Market but our Lawyers are ready to give you professional and honest advice whether you can get your money back or not. We do not share information for the names of The Developers against which we have institute legal actions, because it can reflect our legal investigations and the outcome of our clients’ cases.
We are opened to answer your enquiries and discuss your problems further.

Yours sincerely,

Vladimir Ivanov
Attorney - At - Law