If you own a property in Bulgaria it is exceptionally important to you to take time off to read the following information. You might not be informed on the latest real estate regulations in Bulgaria.
New Real Estate Regulation in Bulgaria
Since 1st May 2009 the new Law for Management of the Common Parts in Buildings entered into force in Bulgaria.
Introduction
What is a “common part”? In each building/complex there are objects which belong to all owners of apartments in this building. These are staircases, lifts, roof, corridors, cabin for security (if any) etc. These objects are called “common parts”.
Each owner of Apartment possesses a certain percentage of these common parts. This percentage is written in the Notary deed and/or in the Preliminary contract. It is a regular practice the sellers/developers to calculate this percentage in square meters which are added to the pure living are of your apartment, thus forming the so called “total area”, according to which the purchase price is calculated. This practice is not very accurate, as you need to know your share in the common parts in percentage and not in square meters. The best would be if you know both.
“Management” of the common parts means that all owners of apartments in one building gather together and decide general matters of the common areas (called “General assembly of Owner”, GA), for instance:
- How much will pay each owner for the maintenance of the common areas monthly (certain amount per person or per apartment or per share in the common parts);
- How the funds, gathered by all the owners, will be spent;
- When and if any part of the building needs to be repaired etc.
The GA appoints 3 persons among the owners, which form the “Board of Owners” (Board). The Board deals with the ongoing issues of the building. One of the board members is elected as Chairman and he/she represents the owners in front of 3rd parties or authorities when it comes to matters concerning the building. The functions of the Board can be carried out by one person, called “Manager”, instead of 3 persons with one Chairman.
There should be also a Control body of Person (also among the owners), who shall “keep” an eye to the way the Board or Manager does their job.
New Regulation
The new regulation, which entered into force on 1st May 2009 repeated the main moments described above and added some new moments:
1) Obligatory registration of each Building with its Management body in the local Municipality.
By 1st Nov 2009 all buildings which have Permission for usage (known as Act 16), old or newly built, which have not organized GA for more than one year shall organize one, constitute their Management bodies (if they have not done this) and register their building and Management body in the local Municipality. In case this is not done the by 1st Feb 2010 the Mayor of the Municipality has to organize such GAs. These terms are general and there are no penalties or other bad consequences if they are not strictly followed. But, anyway, it is in the interest of the owners this to be done.
2) Book of the owners
There should be a book of the owners which shall be fulfilled with the details of each owner, details of their Notary deed and shares in the common parts. This book is kept and fulfilled by the Manager/Board and is registered in the Municipality.
If you are a foreign owner, who does not live in Bulgaria.
You obviously need to have a person here to represent you at the GA and in the taking of any kind of decisions. This person (if he/she is not another owner in the same building) needs to be authorized with a notarized Power of attorney. One proxy can represent not more than 3 owners at GA.
It would be a good idea to form an online GA, with the participation of as many owners as possible. It can be moderated by a person who will also take care that all decisions taken are put on paper and later signed by all participants. It is advisable that a person from Bulgaria (from the region where your property is) also participates and takes care for the implementation of the decisions taken on spot. If needed the first and some of the following GAs can be attended by BG lawyer, who can give legal and practical advices, where needed, and who will confirm that the whole procedure is followed and the GA is legal.
If you have entered an individual contract as an owner with Maintenance Company.
The practice of entering individual maintenance contract when signing Preliminary contract or Notary deed started in Bulgaria in the last years. In some aspects this practice contradicts with the existing and New Regulation.
According the New Regulation the GA can decide to appoint one person or a company to take care about the maintenance of the common parts and to report on a regular basis in front of the GA. If such decision is taken, GA empowers the Manager/Board to enter a contract with such company on behalf of all owners, and defines the main issues of this contract.
The question is: if such decision is taken by the GA, what happens to the individual maintenance contract entered between each owner and Maintenance Company (MC).
Option one. On the ground of the decision of the GA you can terminate the contract with the MC, because it contradicts with the decision taken by GA. Basically the GA may decide to restrict the access of this company to the building.
Most probably the MC would not be happy with this and will try to accuse you of breaking the contract and sue you for penalties or compensations. The Law does not stand on their side but you would definitely need to consult with a lawyer if deciding to take this option. The lawyer shall review your maintenance contract and write the appropriate letter to the MC in a way that further disputes or trail are avoided.
Option two. If all or most owners in one building have entered maintenance contract with same MC (which would be the case in most of the buildings), then it is worthy that the Manager/Board renegotiates with the MC the conditions of their work. Basically all individual maintenance contracts have to be terminated and a new general one will all the owners has to be entered. Thus the MC will be obliged in front of the GA and their work expenses and remuneration would be much more transparent and adequate.
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