Re-sale of your Bulgarian real estate, or couple milestones why a lawyer is needed
We truly understand your intention, in your capacity of foreign property investor, to achieve profit of your initially made real estate investment in Bulgaria - via selling your house, land or apartment. It is a very important point of view, especially if the real estate is owned by a local Bulgarian corporate body (limited liability company - Ltd) registered in your name. Very often unfair estate agents will hide from you the tax complications which are arising if a Bulgarian property is sold for a higher price than purchased initially with the Title Deed – in such a case immediately the owner i.e. the local Bulgarian company is liable to Capital Gains (i.e. the managers of the company could be charged with a fine). The same scenario occurs if the seller of the property is a physical individual and sells the property for a higher price within 3 (three) years after purchasing it. This is why we will outline here the most important points that should be covered/checked during the resale procedure. Note that the legal side of the deal is the one which will ensure the positive financial outcome for you and will prevent from any headache on a later stage, and to ensure that you may not be liable to the buyer for damages for having made a misleading statement in the new Title Deed (a contract which we are able to prepare for you – visit our section Preparing contracts. Protection of your legal and financial fair interests is the actual job of an experienced Bulgarian lawyer. Note that before you actually start the re-sale procedure, you will need to perform the following activities:
- Ensuring that the legal status of your Bulgarian property (or the legal status of your company which owns the property) is ok (proper Cadastral registration of your property, paid up-to-date annual property taxes, tax reports, lack of any burdens, mortgages or other encumbrances, etc). This is our job – to investigate the current legal status of your Bulgarian property and to ensure that a prospective straght re-sale can be achieved without any complications or delays for you.
- Getting informed about the current condition of the real estate market in the area of Bulgaria where your property is situated and about the eventual Capital Gains complications you should expect after re-sale: You need to get informed what are the fair trade values of similar properties in the area and this is why you need us - appointing the correct price of your property and calculation of the Capital Gain Taxes is the right goal to achieve actual financial profit and return of your investment, before you jump ahead. If you own a local company – then you should be advised about the accountancy matters after re-sale of a property. For many real estate agents the lower price is advantage in order to help them get quickly their commission fee. But for you as investor, a correct analysis of the market in this area is needed; pointing the right circle of buyers who may be interested in purchasing exactly your Bulgarian property is advising; giving you an estimate view of the length of the sale process and the activities and costs (for obtaining documents) is needed in order to clear your view and to avoid any inconvenient outcome for you at the end of the day. You can rely on an estate agent to perform this; but a licensed Bulgarian lawyer is a licensed Bulgarian lawyer namely because personally obliged to protect your interests with a lawyer's contract and the standard lawyer's insurance against damages to clients. Please relate to the section Bulgarian Real Estate Market in 2015 for more information.
- Marketing your property: If you are using the services of local or overseas real estate agents, please ensure that they are marketing the property namely for nothing different than the asked price by you and also ensure that you will not have to pay their fees before the actual signing of the Title Deed. Note that if you are selling the property via your own company, you should require VAT-receipt for any agency fees due to the sale; as well that the agreed price will be listed in full amount in the new Title Deed to be signed by you as a seller. Another thing you should ensure is that any "reservation deposit" or "stop deposit" if obtained by the buyers, should go directly in your possession, and will not be kept by the real estate agent. You should be aware that many real estate agents act unfairly, where keeping the deposit pretending they do it "on behalf of the seller” without actually been legally entitled to do so, and if the buyer pulls out (usually because found another, a lot cheaper property), the agents keep the deposit and you end with empty hands. This is why your interests should be protected by a professional nd experienced Buglarian property lawyer like us especially on this matter.
In our capacity of Bulgarian lawyers we are capable to prepare or negotiate on your behalf the offered to you brokerage agreement, in order to protect your financial and legal interests before the real estate agents, to guarantee that you will receive any achieved reservation deposits directly, respectively to ensure that the only party to benefit in full of the sale will be you. Visit our section Preparing contracts for more information and guidance.
- Finding the right buyer for your Bulgarian property (and obtaining deposit): this is the most difficult part of the process, where your conditions for sale should be met in full by the buyer, before entering in any contractual obligations. In our capacity of Bulgarian lawyers, we can help you via examination of your documents and after confirmation that these are proper, to list your property on our own webpage www.dynsolproperties.com designed for our clients who have initially bought using our services and now wish to re-sale, where we have already checked and examined the related documents to each property and ensure a straight and non-problematic re-sale. This has been precisely listed on our website so any prospective buyer when reads it, will be interested to proceed.
- Once the buyer has been found: there must be collected information about their intentions to buy the property, within what deadlines, an information about the planned by them ways of financing the deal (for example, with local mortgage), etc. As well obtaining a deposit from the buyer to show their intentions to buy namely this property and to cover the expenses of the seller in obtaining the needed documents for the sale and the legal fees. This is part of our job – in our capacity of Bulgarian property solicitors we may ensure for you that a proper sale could be done, without any surprises from the buyers' end. We bear that securing the buyer's interest is very important; this is why we may offer to represent them as well, where their and your fees for legal representation will be deducted, in order to help both parties to cut their expenses related to the property deal.
- Collecting the needed documents for performance of the sale of your Bulgarian property, at the local Authorities and related to the sale of the property. Please note that this is the longer part of the job where it takes time for obtaining these documents - at the Land Registering Agency, at the Cadastral Agency, at the Tax Authority, etc. Visit our section Declaring real estates at the Tax Authoritites for more information. Sometimes part of the paperwork may be presented to you by your previous Bulgarian solicitor, or left with them still. Also note that it is very likely that the buyer may have got a proper lawyer who will definitely want to ensure that the documents for the property are available and will request to examine these documents before allowing their client to enter into the purchase.
- Note that in Bulgaria there a Cadastral Map has been entered in force, where all properties have been listed with individual numbers for each one of them (for example, a property in the area of Sunny beach should have an individual number 51500.3456.23 etc.). And when you re-sell your Bulgarian property, you are obliged to obtain from the local Cadastre Agency in your area a Cadastral Scheme listing visually your property – this cadastral scheme you will have to present to the local notary public who will witness the sale. This is especially valid if you own a property in Sunny Beach, Bansko, Pamporovo, Kavarna, Sozopol, etc – where the Cadastral Map is already in force. This means that after buying the property back in the days, you or your representative should have applied to be registered as actual owners of the property, at the local Cadastral Agency. The reason for it is that on the cadastral scheme of your property, needed to be issued for selling the property, you have to be listed as owner, and not listed the person you have bought from – otherwise a local notary public won’t witness the sale, neither the Land Registry Agency will register it. Visit our sections Cadastre registration for more information and guidance.
This why it is very important, once you have bought your property, to apply to be registered as owner at the Cadastral Agency, – so you will save money and time later, once you decide to re-sell. We can help you on this matter – on your behalf we can register you as owner at the local Cadastral Agency no matter where in Bulgaria the bought estate is situated.
- Entering into the sale: There are two options: direct signing of the Title Deed for the sale of a local Bulgarian property, or signing of preliminary contract against receipt of advance deposit (for example, due to agreed mortgage matters or stage payments by the buyer). This is the most important part of the sale, where we can prepare/design the preliminary contract and/or the Title Deed for sale on the base of the collected documents (resp. the preliminary contract) in your favor and will ensure the actual receipt by you of the purchase price. Usually we prepare draft versions of the related contract, we translate it and we present it to our client for their approval, before signing. Once approved the contract may be sent to the buyer or to their Bulgarian lawyer for their approval on it as well. We can then manage a completion date before the related local notary public in the area where the property situated and to appear on the sale to sign the new Title Deed on your behalf as seller (so you won't have to travel to Bulgaria at all).
- Once the sale has been completed: Once the new Title Deed has been signed, we can provide to you (and to the buyer, if requested) a copy of it and to unregister the property from your file at the local Tax Authority, so to ensure you won’t be charged with annual property taxes any longer for this particular property. We can also change the water and electricity batches in order to ensure that you won't cover on a later stage. So as you can see, each of the above steps requires guidance which we can provide to you, or we may perform on your behalf in order to cut your expenses related to the sale. Contact us if you need any assistance on the above detailed matters.