Check of ownership of real estate property
One of the mandatory steps from the perspective of legal security of deals in real estate prior to the purchase of a property is to check it for so-called encumbrances. Apart from the check for encumbrances on a real estate, the other mandatory aspect of pre-contract survey, from the perspective of security, is survey of ownership history. If the check is aimed at a landed property that was formed by combining a few smaller ones, the ownership and registrations for each constituent should be checked and not only for the resulting larger one.
Check in the Property Register
The Property Register maintained by the local Registration Offices at the district courts ensures publicity of the registered ownership acts, encumbrances, and other registrations and details. From a practical perspective, the check begins from survey of the current owner (seller) and goes back though past transfers. At some Registration Offices, for instance in Sofia, the registry archive is divided into old and new – respectively, from 1912 (the year changes due to the expiration of the 100-year storage limitation period) to 1989 and after 1990. Regarding older deeds (title deeds, etc.), the survey should be carried out at the Archives State Agency. Moreover, the property register is currently equipped with an electronic information system comprising the period since 1997, which allows for remote checks, but without receiving copies of deeds. The receipt of deeds is always done at the respective Registration Office.
Check at the Zoning Commissions
The adoption of the Ownership and Use of Agricultural Land Act (promulgated on 1 March 1991) regulates the so-called recovery of ownership (restitution) of agricultural land re-parcelled during the period of the National Republic of Bulgaria. In most cases, upon checking the ownership of a property, we find the quoted decision of the respective Zoning Commission thereby restoring ownership of the respective land. There are frequent cases in which it is exactly these decisions that turn out to be inexistent, not enforced, repealed, or null. In fact, this may mean that the ownership which was or will be transferred has not been recovered and there is an instance of state/municipal property. It is exactly because of this that the check of ownership is not exhausted by a review of the entries in the Property Register. The same applies for properties recovered pursuant to the Restoring Ownership Over Nationalized Real Estate Act (promulgated on 21 February 1992). In addition to the fact that if data is available of resolution for restoration of ownership over real estate, this resolution should be checked, the check at the Zoning Commissions should be completed by requesting a certificate that there are or there are not restitution claims in relation to the property. This certificate aims to guarantee that the restoration procedure has been completed.
Check at the municipalities and regional government offices
Next, ownership of the property at a certain stage may have been private, but this does not mean that there are no claims by the state or municipalities, or deeds certifying state/municipal ownership. What was said above regarding the certificate that needs to be obtained from the Zoning Commissions also applies to this check.
Check of the spatial development status of a landed property
When checking a landed property, another aspect that should not be omitted is the check of its spatial development status. A property may be sold as regulated, but may in fact have not been actually regulated. It is also possible for the seller to claim that the property has permission for average and high building construction, 80% construction density and 2.5 building intensity coefficient, but this may in fact refer to the landscaping area. Therefore, prior to the purchase of a landed property, the check should by all means cover its spatial development status, the detailed development plans approved, building plan, etc.
Check for illegal construction
Depending on the type of property – independent item within a building, landed property, or an entire building, another important aspect is the lawfulness of the building. For instance, there may be small violations – illegal installation of windows on balconies/terraces, or significant ones – illegal reconstruction of premises, main structures, additional adjacent and/or upper structures, etc. From the perspective of right of ownership, the legal status is irrelevant – it is possible to transfer any right unless explicitly prohibited by the law (outside civil circulation). The problem of illegal construction is the duration of the right of ownership, since there is a risk of destruction thereof at a given stage, thus removing a portion of the property, or the entire property.
Check for the past ten years
One of the common mistakes that buyers, sellers, intermediaries make when performing the deal before a notary, etc. is to request that ownership be checked for the past 10 years – a period equal to the purchase limitation period of an unfair owner. The mistake consists in the fact that if a property was state or municipal property, purchase limitation periods may not apply, i.e. even if more than ten years have passed, the property again would not be owned by the seller and the subsequent buyers, but by the state or municipality. This also means that all structures built on a landed property would become property of the state or municipality, should they claim ownership.