Why authorising exactly a Bulgarian lawyer?*
We are designating the present section to clear to overseas people some eventual misunderstandings related to the nature, the form and the role of the power of attorney (letter of authorization) in Bulgaria. Following the provisions of the local legislations there are certain and important differents between this document here and powers of attorney with similar role abroad. These sometimes cause misunderstanding in the assignor/authorizor. So as part of our legal practice, there are many cases where we have acted (and still acting) on behalf of sellers and owners of properties (100% overseas property investors), whose authorized representatives/proxies have either caused a mess or directly have cheated their assignors/clients. It is getting more and more common for different nationalities to apporach our firm with post-sale queries, related to and involving 3rd parties where letters of authorization have been wrongly called “A power of attorney” and given to non-lawyers, actually misleading the authorizor that the proxy acts as a solicitor capacity, where they are not.
Although the vast majority of our clients come from the Western Block, citizens of the former Eastern Block also face similar problems, but the way of explaining the local issues differs a lot. This section is designated to give better understaning to people, who come from countries with stable economics and established rules.
In the last years EU rules became compulsory for all member-states, but the new members have mainly ‘scratched the surface’, not reaching ‘the core’. Thus, most Western states have well established and working rules for financial advisers, licence regime for real estate agencies and solid rules for property transactions. On the contrary, Eastern Block never had private businesses, private ownership was restricted to the minimum and for 60 years the systems there have been left heavily twisted. In nowadays, the new member-states formally have some legislation, complied with the EU requirements, but in practice appears most rules are not working and could not deliver results at all. For instance, and what concerns directly sellers of Bulgarian real estates – one can formally grant authority to anybody for representation of a property transaction, and by ‘anybody’ Bulgarian law literally means anybody (any physical indiviudal over 18 in good health who understands their own actions). Such general authorisation also gives only rights, but not any obligations atll. Thereore it is vital or one to check whether the party to be authorized to protect their own interests without holding any liability, has the right qualifications, licence, knowledge, responsibility, business insurance, regulated by public body and so on.
We have at least 3 cases from the last few months, where clients approached us, saying: ‘We gave POA back in time, our Bulgarian property was sold by our representative and we never received our money’ or “received only part of what has been initially agreed with the buyers”. In such cases, bearing that the authorizor has voluntary signed and passed to their proxt the rights for selling on whatever price and conditions, under Bulgarian law there is no criminal case (fraud or deceptive actions), but only civil relationships between two parties; those two parties may have agreed to sort out their finances later in cash or against return or other favor/service. And the relevant conclusion is always ‘if you have not authorised regulated person/body (i.e.not a Bulgarian attorney at law), it means this is a private relationship, based on trust and excluding any liability by the proxy towards yourself’.
So, once you have read all the above, here are some reasonable things to do: milestones, which you should obey when asking yourself if you should authorize namely a practicing Bulgarian lawyer with a power of attorney to protect your rights and interests:
1) Always be sure you authorise solicitor office or the private individuals, as described in the power of attorney, and that they are either Bulgarian lawyers or working for a law firm. Putting a Title “Power of attorney” on the document does not guarantee that the listed proxies are lawyers, neither obliged/liable/contracted in any legal way towards the authorizor.
2) If you do expect to authorise a solicitor in relation to a articular court case (court proceedings), then you won’t have to get the power of attorney witnessed, but instead it will be a specific form on the back of the lawyer’s contract with you, containing an individual file number of the lawyer.
3) When doing ordinary POA/Letter of authorisation (not for court proceedings but for any other legal activities), insist on having written the business qualification of the proxy, and the BAR they are registered in, beore the name of each authorised individual. Alternatively, you can have in writing the following: ‘I, …/your name/ authorise X solicitor firm and its employees…./names of employees/…
4) When giving authorisation and passign rights for unlimited period, again make sure it is given to a practicing Bulgarian solicotor/law firm. Unlimited term works when you deal with a proessionally regulated body – Bulgarian solicitor or firm with Bulgarian lawyers. All the other cases (non-lawyers such as agents) create one-way relationship – you give them rights, they give nothing in return.
5) When authorising Bulgarian lawyers, obviously you give them instructions, which is not the case with private individuals and agents. If you can get away without authorising a non-lawyer, then be sure that in the POA/authorisation letter you mention ‘the present authorisation is given formally in relation to contract for services/order number from …date’ and DO sign such a contract with content: ‘I order this company to buy/sell for x amount or do this and that against this sum’.
6) If you do not authorise a Bulgarian lawyer, then make also sure once the job is done (if done at all), you get back the initially signed original of your POA/letter of authorisation. Unfortunately there have been cases where empty companies, owned by overseas investors, have been used for money-laundery procedures by previously authorized local parties who were not law practitioners, without the knowledge of the authorizors. The way to avoid such unpleasant outcome is namely to authorize a Bulgarian solicitor who is actually contracted towards yourself and holds the business liability with their professional insurance.
7) Do not leave your title deeds for ‘safe-keeping’ to a non-lawyer. Even more, our company has a policy to post as soon as possible the original title deed with translation to the beneiciary/owner (together with keys for their property), so do not solely rely on promises. When you have authorised a non-lawyer to open and operate with your bank account, once the purchase/sale is over, it might be a good idea to close the account and open a new one on your own.
8) Finally, if you are still not convinced why to give POA/authorisation ONLY to a lawyer, then BEFORE authorising anybody, ask them to reply in writing do they have proessional indemnity insurance and are they regulated by a professional body?
At the end of the day, always obey the fact that issuing a letter of authorization for opening bank accounts in your name and operating with them without any restrictions, for transfer of properties on your behalf does not creates aby liabilities by the proxy towards the authorizor, but only allows them to perform the detailed activities, where these affect directly the shpere of the authorizor, but not affect in anyway the proxy, who has only rights but no obligations. This is why their legal status is "beneficial of rights" and this is why the single letter of authorization is not a binding contract of any kind for both parties – the authorizor and the proxy. This is why it is beneficial to authorize a Bulgarian lawyer, who signs also a standard contract for legal service with you and has the professional business insurance towards clients for damages.
We hope you may find this article useful, especially when knowing the difference between POA/authorisation to a lawyer/law firm and any non-liable 3rd party.
Also bear in mind that we consult clients on terms&conditions on particular authorisation, so feel free to contact us for more guidance and advice.
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* A solicitor within the meaning, given by the Common Law system in the UK, is a lawyer who is member of the Law Society of England and Wales, and licensed to represent people in the lower courts. Usually their job is to handle office work and to prepare lawsuits for lawyers to appear in the higher courts. Since in Bulgaria there is no identical divisional classification of legal practitioners, the term "Bulgarian solicitor" refers to the figure of a lawyer (barrister), who is member of the Bar. Speaking in general, once licensed by the Bulgarian Lawyer's Bar, bona fide solicitors are entitled to give legal advice and to handle both trial work and out-of-court lawyering. Well, to be precise in the theoretical interpretation of the term "solicitor" we need to point here also the figure of a junior bona fide lawyer - a proper member of the Bar, who is entitled to represent people only in the District court as 1st instance court for his/her first 2 (two) years of practice,. For attending on lawsuits in higher court (which hears more expensive civil claims and serious crimes), he/she should participate only together with a lawyer who has more than 2 years of practice.
In our capacity of Bulgarian lawyers we are acting as independent legal practitioners, licensed by the Bar and experienced in legal representation in Bulgarian courts and on out of court jobs. For almost ten years we provide legal consultation and representation of foreign investors in Bulgaria, where we handle their legal and financial interests, whether it is related to debt recovery - www.dynsolgb.com/delayed.htm, conveyance services - www.dynsolgb.com/our_services.htm, real estate issues - www.dynsolgb.com/collecting.htm or various civil lawsuits - www.dynsolgb.com/pursiung.htm in Bulgaria. Our aim is always to create a bridge of trust and permanent communication with our overseas clients who seek legal help for their investments in Bulgaria. We are Bulgarian solicitors who put their best efforts on every job we undertake, and we always try to deliver the best results to our clients and to meet their exact needs. Contact us http://www.dynsolgb.com/contact_us.htm for more information and quotation.