Preliminary contract Bulgaria
Preliminary contract Bulgaria
The practice established in real estate transactions, considering the usually high price, is that the parties enter into a preliminary contract which stipulates the conditions for the future performance of the formalities related to the deal at the notary’s office.
The first serious legal step is the elaboration and signing of a preliminary contract for the purchase and sale of real estate. Typical forms, which are abundantly circulating among brokers as well as on the Internet, can serve only as a general guide.
They do not include all the specific features of your particular case. That’s why you need the help of an experienced colleague who thoroughly insights into the individual features of your transaction and checks all documents related to it.
The legal framework of the preliminary contract is given in Art. 19 of the Law on Obligations and Contracts (APA) and in Art. 362-364 of the Civil Procedure Code.
At first sight it is quite clear, even trivial, that the preliminary contract for the purchase and sale of real estate is valid only if it is concluded in writing. It happens, however, due to hurry or for other reasons, first to pay a deposit (deposit) with the stipulation that a day or two later will be signed and a preliminary contract.
From a legal point of view, this is a risky move – you must know that without any written pre-contract, any money you give may be anything but a deposit. Even if you have a receipt from which it is clear what the relevant amount is paid for and what character it has.
If the seller refuses to enter into a final contract in the form of a notary deed, the court will decide that you have made a payment on the basis of a void and you you want the maximum amount (if you prove the payment itself), but not double; much less you can take advantage of the possibility provided in Art. 19 para. 3 of the APA (the conclusion of a preliminary contract can not be proved by witnesses or by indirect evidence, unless it is in writing, it will in any case be void due to a conflict with the law).
At the same time as the contract is signed, the buyer pays the seller a deposit (deposit) . According to Art. 93 of APA “the deposit serves as evidence that the contract has been concluded and ensures its execution”. If the buyer who gave the deposit fails to fulfill his obligation, the other party may withdraw from the contract and withhold the amount. If the obligation is not fulfilled by the seller, then the buyer may request the double payment. Certification of the transfer of the deposit is made either by an express clause in the Preliminary Contract itself or by a receipt, protocol or other document that forms an integral part of the contract. It is important for the payment to be linked to the legal basis for what is the pre-contract in this case.
Another crucial point – due to the proximity of the deposit to other legal institutes, such as forfeiture, for example, in the text of the preliminary contract must be very clearly formulated the will of the parties to perceive the transfer of a sum as a deposit.
Moreover, it is permissible for the parties to agree a penalty and an advance payment of part of the agreed price of the property. Naturally, the parties must be aware of the legal nature and consequences of the said legal institutions, as well as any clauses in the preliminary contract. So do not be afraid to ask any questions to your lawyer before signing.
Not always the non-conclusion of a final contract leads to detention, respectively. claim to return the double deposit. If the conclusion of a final contract becomes impossible due to force majeure – force majeure (fire, flood, etc.) or conditional (although unusual, it is permissible for the parties to conclude the preliminary contract, for example if the buyer is granted bank credit – question of wording of the relevant text in the preliminary contract), there is no wrong party to compensate for the damages to the wrong. The pre-contract may be spoiled and the deposit returned and if (and when) the parties agree to do so.
The obligations of the parties, as well as their purpose, are not only to appear before the notary but also to prepare the conclusion of the final contract, to provide all the documents necessary for the notarial deal. Of the extent to which the parties will fulfill the contract stipulated in the preliminary contract and the extent to which all the circumstances relating to the property will be carefully studied, the security and the surprises in the acquisition of the property depend on the time between the signing of the preliminary contract and the notarial act of the transaction (or other proprietary right that is subject to transfer).ude a preliminary contract. This is an advisable part of the process as some of the check-ups require more time.