Preliminary Contract and Payment of Deposit

Once all the checks have been made and there appear to be no problems with the property,you may then sign the preliminary contract.

Nice rural house

The preliminary contract represents a legal commitment between both parties.The seller commits to sell the Bulgarian property and the buyer commits to buy the property. You do not have to certify the preliminary contract in front of the notary in order for it to be valid, although, if you do so, this provides more protection for both parties. The preliminary contract is usually drafted and signed in Bulgarian. In case any of the signing parties does not understand Bulgarian, there should be a licensed interpreter present at the signing, and the contract must be translated. There is no problem if the contract is also signed in English if, for example, both parties are English and understand the language, but if the contract needs to be presented to the court or any other state or local institutions, it should be officially translated into Bulgarian by a licensed translation agency. If your lawyer is signing the preliminary contract on your behalf, you may still ask for a translation so that you understand the terms and conditions.


The agreement must state your name or your company’s name as a Bulgarian property buyer, and the property seller’s name. If your Bulgarian company has not yet been fully registered, you can enter into the agreement on behalf of a company that is in a process of registration and all rights and obligations will be transferred to the company from the moment it is officially registered.

new house for sale in Bulgaria

It is important that all sellers, if there are more than one, sign the preliminary contract. Bulgarian property owners who have not signed the contract will not be bound by it and will not be obliged to sell you their share of the property in Bulgaria. If the property is owned jointly by husband and wife, both must sign the contract.

off plan house for sale in Bulgaria

The preliminary contract may be signed by your representative on the basis of the power of attorney but with your name and on your behalf. The seller(s) may also sign by proxy. In this case the power of attorney must be notary-certified and must clearly state that the proxy has the right to sell this exact property in Bulgaria and for what terms and conditions.

off plan property for sale in Bulgaria

The preliminary contract should describe in as much detail and as accurately as possible the Bulgarian property that is subject of the real estate deal. You may also list in the agreement any movables and furniture that are to be sold with the property. If there are any property repairs or any other work to be done on the property by the seller between the Preliminary contract and the notary act, as a condition of sale, it is important to describe the state in which the property should be when the notary act is signed. Further, the agreement should determine the term – date or event-on which the final notary act must be signed by both parties.

The preliminary contract should state also the price of the property. It should indicate the currency, whether it is payable by bank transfer or in cash, and what is the payment plan are when you should pay in full for the Bulgarian property that you are buying.

traditional house in Bulgaria

You should declare the full price that you are paying in the preliminary contract. There are dangers for both parties in not doing this. If the seller under-declares, the buyer might then try to force the notary act to be completed at the lower price and pay less for the property, but often sellers are unwilling to declare the full price in the preliminary contract as you (the buyer) can then use this as a lever to insist that the full price is declared in the final notary act. Such are the problems generated by the culture of underdeclaring In practice, in almost all cases, the preliminary contract states the full price paid. It is very important to state the full purchase price in the preliminary contract, it will be up to you and the seller what price will be stated in the title deed itself. It could be lower or the real purchase price.

The preliminary contract may include many other conditions. Make sure that you include all important and key points in the contract, especially if some of them are conditions for signing of the notary act.

wooden house

When you sign the preliminary contract, there is a deposit that the buyer should pay to the seller. Usually the deposit is paid in cash, but it maybe paid by bank transfer as well. The amount is usually 10 per cent of the purchase price. It is still common in Bulgaria that the deposit be paid in cash. The deposit is paid in order to secure the fulfilment of the preliminary contract. Generally, if the buyer pulls out of the deal or refuses to sign the notary act then the buyer loses the deposit in favour of the seller (assuming that the seller is not in breach of the contract). If the seller pulls out of the contract or sells the property to someone else, then the seller should return the double the deposit paid to the buyer (assuming that the buyer is not in breach of the contract). Where one of the parties is in breach of the preliminary contract, then the other party may ask the court to pronounce the preliminary contract as final. Then, instead of a notary act the buyer will have a court decision as a deed, if the court honours the claim. In most of the cases the court does honor such claims, and in these cases the buyer will owe to the seller the amount which is specified as a purchase price in the preliminary contract.

landscaped garden
A preliminary contract for purchase of an off-plan property in Bulgaria is slightly different from that described above. There are two types of legal relationship between the buyer and seller-the first relates to the actual purchase of the property and the second relates to the construction itself. Besides the general characteristics of the preliminary contract, as described above, it should contain additional clauses concerning the future construction, the stage of completeness of the apartment and the common parts, the exact specification of the construction work, the terms and conditions for the construction, the quality of the materials used, and the post-construction building guarantees.

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