Buying real estate is a responsible step, usually involving many financial resources.
Therefore, it is important to take all possible measures to ensure your peace of mind and security.
A hasty transaction can cause serious problems, costing money, time and nerves.
We will introduce 5 measures to consider before buying real estate, in our LegalMasterClass article.
1. Assign the work to an attorney
First of all, trust an attorney. With his/her experience and legal knowledge, he/she will greatly help you both at the beginning of the negotiations and until the end of the deal.
Unlike the other parties involved in the transaction, he/she will be solely responsible for your protection and that of your interests and will inform you of any problems related to the ownership of the property.
With the help of your attorney, you may decide appropriately whether to move on to another property or get valuable guidance on further handling the situation.
You can read more about the benefits of using an attorney in property transactions here.
2. Commission a full survey of the property
Before signing anything, do (or have your attorney do it for you if you have considered our first recommendation above) preliminary research of the property. This encompasses its ownership history, a land registry check, a certificate of encumbrances, etc.
In this way, you protect yourself from possible ownership problems or encumbrances that the seller and the real estate agency have no interest in communicating with you.
3. Enter into a preliminary contract
The sale of real estate takes the form of a notarial deed, a contract drawn up and signed before a notary.
Often the parties to the transaction are not ready to immediately sign a deed.
The conditions might not be in place or the parties may have other considerations (they are waiting for bank financing, an old mortgage must be deleted, etc.) before signing.
In such a case, it is highly advisable to conclude a preliminary contract. It provides the necessary certainty in the relationship between the seller and the buyer of the property before the transaction is realized and attested.
We recommend an attorney to prepare the preliminary contract, assist in the negotiations between the parties, and set out the supporting clauses in it.
4. Do not hide the real price of the deal
Often, to save money on notary fees and local tax, the parties settle the transaction at a lower price than the real price.
We at LegalMasters.bg do not recommend this practice to our clients for several reasons:
First, if the full price of the deal is recorded in the title deed, in case of any future claims by a third party for the ownership of the property, you might claim everything you have paid to the seller and refund your money. In case you have settled the transaction at a lower than the actual price, you will only be able to claim the amount that is recorded in the title deed. In practice, you will lose a large part of the price paid.
Second, if you agreed on one price and the deed states another, you are making a false statement for which you could theoretically be criminally liable.
Third, large amounts of cash are given when hiding the real price. This is again subject to administrative liability (the law prohibits cash payments for amounts over BGN 10,000) and you can incur a financial penalty.
Fourth – you lose the ability to prove payment of the money in the future unless you draw up a receipt, but even with a drawn-up receipt, you cannot be 100% guaranteed. You can find a blank receipt here.
Fifth – you cannot prove the origin of your money in future transactions you undertake.
Last but not least – if you have hidden the purchase price, but decide to sell the property within 3 years and the new buyer wants the deal to be settled at the actual price, you will owe a 10% tax on the difference between the two values, which in this case will be significant compared to the real difference.
5. Declare the property in the municipality
As the new owner, you should declare the property before the district municipal administration after the transaction has been finalized.
This must be done within 2 months of the transaction. When it comes to properties under construction – the term runs from the commissioning of the building.
If you have a real estate transaction and need legal assistance – we at LegalMasters.bg are here to help. Contact us via our website legalmasters.bg, our Facebook page, email contact@legalmasters.bg or phone. 0893 050 449.
Dear Readers, All materials published on LegalMasters.bg are for informational purposes only. These materials reflect the personal views and professional opinions of the respective attorneys from the team. They should not be perceived as comprehensive legal analyses or particular legal advice. Before taking or not taking legal action on the issues discussed, seek professional legal advice for your specific case.