Investment in Bulgaria - advice welcome

P

peanuthead

Guest
Hi there


So a year ago I decided to invest in property in Bulgaria. It was a good idea at the time as myself and the partner were both working and we could well afford it.

We are both 25 and just have regular jobs. We bought it because we had some savings here (small amount and we got a loan to cover the bulk) and there was no hope of getting a mortgage in Ireland.

We did not buy it to make huge money back on it. We would be happy if money from renting to holiday makers covers the cost of maintenance and bills and thats all. Its more of a holiday home thing.

We invested in Nessebar, 3km from Sunny Beach.

I know it was foolish, but we didn't really look into it too well, and as our last payment was due to go abroad at the end of this month, it turns out there are a whole other host of costs we didn't know about.

1. Notary Fees. I knew about these, but I was under the impression that these could be paid when I'm signing for deeds.
2. Maintenance. The apartment is not yet built so why should I be paying this? I did sign a contract to say that I would, but that accompanied a contract from the developer stating that the apartment would be built by Dec 09. It's running behind so why should I start paying maintenance now?

When I asked about the notart fees, she said something about paying my solicitor for these? Also saying something like 250 of this will be needed asap.

As you can probably tell I do have a solicitor, but she is Bulgairan.

I will give you a copy of the email sent to me, and if someone could state what the meaning of this '700' is too, I would be grateful.

I am going to see an Irish solicitor about this tomorrow, but I am really worked up about it now and would appreciate some help to calm me down!!

thanks.



COPY OF EMAIL:
here you are the answers of your questions :

What is the 105 euro for? Where does this go? Do I only have to pay this amount again once I use that amount of electricity again? Does this follow on to other years? Is this for electricity and water? The reason I ask this is because due to financial circumstances beyond my control here in Ireland, I will not have any money to furnish this apartment until the end of 2010. I do not want to pay 105 for electricity unless I am going to be able to use it.


These 105 EUR are advanced payment for water and electricty.They go in your account with our company.The manager of the complex will keep them and if there is a usage of water and electricty which you can not cover in some reasons you and we will be used in a case of emergency .If these 105 EUR are not spent for water and electricty they can be redirected for future payments or given back to you.Our experience shows that such a payment is obligatory and neccessary.You and every owner will have to pay it in advance in order the apartment to be provided with such an amount and you and we to be insured that everything will be ok with this kind of expenses for a short period of time .Yes , this can follow onto the other yers,depending on how much of that amount would be spent or not.I understand your point of view about the furniture but it is better to cover the compulsory fees in order to be sure that the apartment will be managed properly.


Also - about the notary fees - are you telling me that I only have to pay 250 of this now? Or is 1442 required?


I am telling you that you will have to pay 250 EUR for issuance and preparation of notary papers obligatory to us.The remaining amount you can pay to your solicitor or to sort out by yourself.You can also pay the outstanding amount to us and we will take care after all of the services listed in my previous e-mail.

I am asking you again to provide me the contact details of yor Bulgarian solicitor.

I really don't see why I have to pay the maintenance on the apartment when it is not yet built. In Ireland, we would not pay maintenance on a building until we receive the keys.


Please , remember that the property is based in Bulgaria.We also would like to collect all of the compulsory fees in advance in order the apartment to be run properly.

About the transfer of ownership - I would like to do it myself, but as of yet I cannot give you a date that I will be able to visit. Also, when I do visit, I will visit the Sunny Beach area. Is it possible for me to get from Sunny Beach to wherever I need to be to sign the deeds? Maybe a shuttle bus service or something.


So we will bear in mind that you will transfer the possession personally.You can give us an approximate date , month , season just to have a simple idea.
Our office where I am based is located in Sunny Beach also , Sunny Day 6 complex is 2km far from our office,the notary service is located in Nessebar which is 2km far so you will be able to visit the notary easily .We will give you a lift from the office to the notary just will have to arrange a meeting .

Lastly, and most importantly, I need to know what other payments I am going to be required to make, both after this one and during the year 2010 and then each year afterwards.


You will have to pay the whole amount of the compulsory payments by the end of the present year as the amount of notary fees could be only 250 EUR.You will have to bear in mind that you can not sign the title deed without paying the state notary fees be themselves .They exact amount will be approximately 700 EUR .

Then after you have the property possession transferred on your behalf you will have to pay about 100 levs state taxes every year .
The amount of the communal expenses is not constant it depends for how long you will use the apartment.For a week it would not be more than 50 levs.
 
Hi Peanuthead,

I will try to be brief, Notary fees and maintenance charges are normal practice here in BG.

€105 for electricity & water ? some developers charge for the meter installation but the email says its for pre payment! never heard of it.

€250 is to prepare the notary documents..normally this is paid for by the developer not the purchaser.

Maintenance payments are normally due when the complex is complete.

On transfer of ownership you have to pay notary fees, the amount is based on the amount you paid for the apartment, if the charge is approx €700 then I assume you have paid in the region of €40k ??

State property tax is due each year in April, it is based on apartment size, a 1 bed is about 50 leva per year

The amount of the communal expenses is not constant it depends for how long you will use the apartment.For a week it would not be more than 50 levs.
This I have no idea about as your communal charges are the maintenance charges you will pay each year so there should be no extra communal charges after that payment..

Your bulgarian solicitor should be dealing with all these things for you, BTW did the developer get you the solicitor?
The only other thing I can say to you is to get your contracts out and have a good read, they will state what is due for maintenance & what the policy is regarding electricity & water. I dont think throwing more of your money to an Irish solicitor will do any good now, the best thing you can do is get to the bottom of the payments and get your property into your own name asap.

all the best Shelly
 
I know notary fees are paid when you officially sign for the apartment. Maintainance fees are normal and usually an amount per sq meter.
Did you do any due diligence on the place?
Where did you get solicitor from as they sound dubious in their replies.? You would not be paying any maintainance until it's handed over.
Perhaps someone could recommend a more 'straight' solicitor. You come across somewhat 'green' in the email and I think she is picking up on this. Nessebar is basically an extension of Sunny beach. Its only about 30 minutes north of Bourgas. Did you visit the place or meet anyone in person in relation to this? What kind of loan do you have if not a mortgage? I would not give over anymore money regardless of what she says for the time been, until you get some proper advice on all this.

One thing of note. By buying this apartment in Bulgaria you have used your FTB status in Ireland. You are 25 and as the average buying age is 30 you were a bit quick to assume you will never get a mortgage.
 
Thank you for your replies.

I didn't think I would NEVER get a mortgage here, I just didn't see myself getting one any time in the near future and I thought this would be a good idea for the time being.

Obviously I didn't look into all of this properly and I can see that now. But I didn't realise that this would mean I would lose my FTB entitlements here in Ireland. In 2007 when I called the Revenue a lady there explained to me that I wouldn't, so are you sure? I'm not challenging you, I just don't know what's going on anymore. I don't even fully understand what FTB entitlements involve.

Those emails are not from my solicitor herself, rather they are from the developer's office. What do you mean when you say I sound 'green' ?

@Shelly - thank you for your advice.

I'm not sure what the communal charges are that she is talking about either, I will have to find out about this.

Maintenance I am okay with, but what is the policy about paying for maintenance BEFORE a property is built?

In the region of 40k is correct.

Thank you for your help, I ahve sent you a PM shelly, I just wanted to ask you something in private,

thanks
 
If you own a property in Bulgaria you are not a FTB.

Do you have a solicitor representing you in Bulgaria?
You cant possibly pay maintainance charges on a building that has not maintainance as it's not built.. I would tell developer this instead of asking them... hence green.
Communal charges, I would have thought, are alined with maintainance charges. Which pays for lighbulbs in hallways, changing them, upkeep of gardens. Perhaps maintainance is for you specific apartment in between rental. Your solicitor should have what you signed NO?
I would ask them simply and request a detailed answer. I would not suggest to them a possible answer in the question however..
Never trust a developer and their answers. Another thing to watch for is to make absolutely sure the amount you pay for the apartment is specified on the title deed. I know in Bulgaria alot of Irish people bought apartments for one price with maybe a third of that price been on the title deed. The developer told them it was in their interest as notary fees are a percentage of amount paid and thus would be less if amount on notary deed is less. However if/when you sell for any amount above this figure you will be hit with a CGtax bill as it will be deemed profit. You would be paying 20% CGT on profit syou didn't make due to wrong title deed. It's important the title deed has correct amount on it.
I am not up to speed on current laws in Bulgaria but those notary fees you quote seem high to me.
Perhaps Shelly could recommend a solicitor as you dont seem to quoting your own solicitors advice on here. How did you find your solicitor? I have come across many hairy stories as they see Irish people ripe for the picking over there.
Bulgaria is a very corrupt place I would keep as much distance between my solicitor and the developer for as long as I could. You give your solicitor legal docs they send you etc. If the solicitors have any questions on these docs you can take them to the developer etc.
I would not trust anyone in Bulgaria, so be extra carefull and diligent about everything.
 
Ceatharlach said:
If you own a property in Bulgaria you are not a FTB.

Do you have a solicitor representing you in Bulgaria?
You cant possibly pay maintainance charges on a building that has not maintainance as it's not built.. I would tell developer this instead of asking them... hence green.
Communal charges, I would have thought, are alined with maintainance charges. Which pays for lighbulbs in hallways, changing them, upkeep of gardens. Perhaps maintainance is for you specific apartment in between rental. Your solicitor should have what you signed NO?
I would ask them simply and request a detailed answer. I would not suggest to them a possible answer in the question however..
Never trust a developer and their answers. Another thing to watch for is to make absolutely sure the amount you pay for the apartment is specified on the title deed. I know in Bulgaria alot of Irish people bought apartments for one price with maybe a third of that price been on the title deed. The developer told them it was in their interest as notary fees are a percentage of amount paid and thus would be less if amount on notary deed is less. However if/when you sell for any amount above this figure you will be hit with a CGtax bill as it will be deemed profit. You would be paying 20% CGT on profit syou didn't make due to wrong title deed. It's important the title deed has correct amount on it.
I am not up to speed on current laws in Bulgaria but those notary fees you quote seem high to me.
Perhaps Shelly could recommend a solicitor as you dont seem to quoting your own solicitors advice on here. How did you find your solicitor? I have come across many hairy stories as they see Irish people ripe for the picking over there.
Bulgaria is a very corrupt place I would keep as much distance between my solicitor and the developer for as long as I could. You give your solicitor legal docs they send you etc. If the solicitors have any questions on these docs you can take them to the developer etc.
I would not trust anyone in Bulgaria, so be extra carefull and diligent about everything.
Click to expand...


Thanks for the advice. I appreciate it.
 
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