The purchase of a real estate in Bulgaria in general consists of two phases:
The signing of a preliminary contract by both parties.
The preliminary contract according to the Bulgarian law is a promise for selling the real estate property, and it includes all the details of the future deal, a term in which the property must be sold, terms to finish the construction in case the property is in the process of construction, etc. Usually, the preliminary agreement is signed when the property is not ready to be sold and the parties agree to the terms of the future purchase deal.
Transferring the ownership of the property with a notary deed.
In both cases before signing each if the two of the contracts, a complete due diligence of the property shall be made. Learn more here.
The essential and main difference between the two contracts occurs in the legal effect of each contract.
The preliminary contract is concluded in written form. It is not obligatory but sometimes the parties want their signatures to be notarized. The preliminary agreement in compliance with the Obligations and Contracts Act shall contain provisions concerning the essential terms of the final contract as the exact description of the property, the price, as well as term for a conclusion of the final agreement, have to be included. The preliminary contract for purchasing of a real estate is considered valid only in case the real estate is personalized in details.
In most of the cases, the signing of the preliminary contract leads to paying a part of the purchase price for the property which after that is deducted from the final price.
In case the seller does not fulfill his obligation to transfer the real estate with a notary deed, the purchaser signed a preliminary contract has two options:
- to claim the double refund of the paid amount on the ground of the preliminary contract;
- to ask the court to announce the preliminary contract as a final contract and to transfer the ownership. The ruling of the court serves as a final contract and shall contain the essential provisions of the preliminary contract.
If both sides are acting with a good will, the procedure ends with a notary deed and transfer of the ownership. It is a common practice, and it is highly recommendable that the seller presents a certificate for encumbrances for the real estate – mortgages, distrains, registered claims, justified right of use, etc. – until the day of the signing of the notary deed.
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Contact us if you need additional information or need of legal assistance during the process of buying a property in Bulgaria.