Legal division of property

In Bulgaria, property ownership can take various forms, each with its own legal implications.

The two primary types of property ownership are freehold and leasehold.

Freehold ownership grants the owner full rights over the property, including the land it sits on, while leasehold ownership involves the right to use the property for a specific period.

Legal Framework and Regulations:

The legal framework governing property division in Bulgaria is primarily based on the Civil Code and the Ownership Act.

These laws define the rights and obligations of property owners, ensuring a transparent and secure real estate environment.

It’s essential for property owners to familiarize themselves with these regulations to navigate the division process smoothly.

In Bulgaria, property transactions are typically executed in the presence of a notary public, who ensures the legality and authenticity of the documents involved.

Notarization is a critical step in the property division process and provides a legal foundation for ownership changes.

Property Division Process:

The legal division of property in Bulgaria involves several key steps:

1. **Due Diligence:**

Before initiating the division process, it is crucial to conduct thorough due diligence on the property.

This includes verifying ownership, checking for any encumbrances or debts associated with the property, and ensuring compliance with zoning and building regulations.

2. **Agreement of Intent:**

Parties involved in the division must draft and sign an Agreement of Intent.

This document outlines the terms and conditions of the division, including the share each party will receive and any financial arrangements.

3. **Notarial Deed:**

The next step involves the preparation and signing of a notarial deed before a notary public.

This document officially transfers ownership and must include details such as the property description, purchase price, and the parties involved.

Once the notarial deed is signed, it needs to be registered with the local Property Registry.

Registration ensures that the ownership change is officially recognized and provides legal protection for the new owners.

Tax Implications:

Property division in Bulgaria may have tax implications, and it’s essential to be aware of these considerations.

Capital gains tax, transfer tax, and other fees may apply, depending on the specific circumstances of the division.

Seeking advice from a tax professional is recommended to navigate the tax aspects successfully.

Understanding the legal division of property in Bulgaria is paramount for both local and international investors.

By following the proper legal procedures, conducting due diligence, and seeking professional advice when needed, individuals and businesses can ensure a smooth and legally sound property division process.

With its transparent legal framework and scenic landscapes, Bulgaria continues to be an attractive destination for those looking to invest in real estate.

First stage of the legal division of property

In the first phase of the partition the issues between who will be partitioned, which properties and what is the part of each ofthe partitioners are clarified .

The action for partition is not extinguished by prescription.

The subject matter of a division may be all or part of the property, unless the law provides otherwise, or if it is incompatible with the nature or purpose of the property.

If one of the co-owners does not take part in the division, it is entirely null and void.

The court decides by a decision on the admissibility of the division, which is subject to self-appeal, after its entry into force, a new hearing is scheduled and the division continues in its second phase.

At the request of some of the distributors, the court ruled on the issue of the temporary distribution of the use of the property until the end of the divestment and the sums that the users should pay to the others.

– Second phase of split of property

In the second phase of the division a real distribution of the shares admitted to partition is made between the parties that are recognized as co-owners and according to the established shares with the court decision of the first phase of the admission of the division.

Whenever possible, each of the partitioners should receive a real share of the objects subject to the divestment, as the units are equalized with money.

In the second phase of the division, if submitted, the following shall also be considered:

• the claims on the accounts of the distributors to recognize the costs he has incurred to increase the value of the property
• claims to increase the inheritance (inheritance split)
• as well as for the assignment of an indivisible residential property (in the case of a divorce of a matrimonial property community or an inheritance).

The casting may be done by drawing lots or by partitioning where the prerequisites provided for in law are available.

Where a property is unalterable and can not be placed in one of the lots, the court shall order it to be put out for public sale.

This phase of the division ends with a court decision that has the power of a notary deed on shared real estate and is subject to entry in the Registry Office on the location of the property.

Public sale of the real estate

Where the co-owner to whom the property is awarded fails to pay the remaining monetary equation within six months, the award decision is invalidated by law and the property is exported to a public auction.

When making the sale, the distributors take precedence over the third parties involved in the sale, each of them being able to buy the property at the highest bid.

If several distributors wish to redeem the property at the highest price offered at the first sale, a new sale is only made between these dividers, which is carried out under the general rules.

After that the actual distribution is executed.

With the help of an expert the court divides the real estate by creating of separate shares for each co-owner after which each of them receives his property by lot.

Each party of the case for judicial division pays the outstanding court fees according to the market price of the received share.

There are no obstacles for the parties to make an agreement about the way of termination of the co-ownership during the judicial division and to arrange a court settlement.

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