Article: Bureaucracy, Documentation and red tape when selling
This article briefly considers the logistical and administrative nightmare that can evolve when selling a Bulgarian property. Good agents or conscientious solicitors will shield vendors from all of this and get the task done no matter what, however, if you are selling property in Bulgaria and would like to know more about the common issues that are faced during your conveyancing period, please read on.
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In recent months it has become increasingly difficult for Bulgarian property owners to complete the sales of their properties due to a seemingly ever increasing tangle of required documents. The traditional requirements of banks and notaries are changing and the results have been a rise in costs for vendors, problems for agents and delays for all parties.
When buying or selling a property in Bulgaria you do not need to travel to sign paperwork, it can all be done from the comfort of your hometown. Generally five documents must be signed by married couples and three by any single owner. Under Bulgarian law all assets aquired after marriage are equally owned regardless of who is named on the deeds, as such the consent of both parties is required. As the prevailing law will always be that of the seat of the property, there are two options to satisfy the Bulgarian authorities; either visit the Bulgarian embassy in London or Dublin (or any other) or opt for ‘Apostille’. Apostille is an official government stamp that is recognised by most European countries, it validates documents to enable their application under foreign laws. The Foreign Office provides this services and it can be achieved by booking online or visiting in person. This is the most commonly the solution for British and Irish vendors to satisfy the Bulgarian authorities (without leaving their home town), that their documents are real, genuine and signed overseas with their full consent. This route has been operational and successful for decades, yet now we are finding it is not always the case. |
Lack of ID numbers - lost in translation:
Bulgaria issues personal ID numbers and ID cards to each and every citizen, as this is not done in Britain it has proven difficult for the Bulgarian institutions to accept that a Briton cannot prove that they are single and they cannot prove that they have never been married. There is no official government registry that their ID number can be checked against and a report printed from. Bulgarian banks find it tough to fathom a society where that is possible and yet lending and finances continue without issue, indeed on a much greater scale. In order to prove singledom, we have had letters written and Apsotilled by the local vicar to help demonstrate the owner is indeed single and no additional consent is required from an ex-husband or wife. Technically and legally, the vendor signing the government’s ‘status declaration’ should suffice, but the banks have created their own rules and given that they hold the buyer’s funds, which you the vendor do require, we all have to comply.
Unnecessary documents:
Marriage certificates are frequently demanded, these prove only that a couple have been married on a certain date in the past and offer no assurances to whether they are indeed still married or have subsequently divorced. However, if this is supplied (at the vendor’s cost) the bank’s administrative staff can then tick a box and we as an agency get a progressive answer that is not ‘the computer says no’, as such it is supplied as part of the vendor’s legal bundle and helps the conveyancing continue through to the necessary completion that we and the vendor seek.
If you have ever been married under any jurisdiction, the banks will also demand a report from the Bulgarian prenuptial registry, even if you have been divorced for decades or originally got married in China. This again is at the vendor’s cost and has no relevance at all to those who married outside of Bulgaria, which is nearly every foreign owner in our experience.
Other languages:
If you are located outside of UK, Ireland, Malta, Canada etc where English is not an official language, you will find that the documents have to be translated into the language of the region, even when the Bulgarian notary in the Bulgarian embassy is speaking English and Bulgarian. This is an additional cost to you the vendor as this must be done by an official Bulgarian translation agency who are registered to certify the accuracy of their work. Furthermore, documents that contain text from the home country, such as marriage certificates etc, must be translated into Bulgarian and this text must then be certified by the Bulgarian Foreign Office. In effect, an unnecessary document (such as a marriage certificate) that provides no relevant proof is required by a bank’s internal policy, must be purchased by the vendor (£80 in the UK), Apostilled by the vendor in the UK (£44.50), translated by an official translation agency (15 Euro / page) and then Apostilled again by the Bulgarian Foreign Office (30 Euros).
Documents for Bulgarian Banks – when your buyer uses a mortgage to purchase:
Difficulties have arisen with Bulgarian banks who lend mortgages to buyers, especially in Sofia, as they have recently entirely declined to accept Apostilled Power of Attorney documents, despite this being the recognised route for all countries signed to the Hague Convention since 1961. For reasons unknown, the private banks have decided that Apostille from foreign governments are insufficient proof of consent to selling and thus will no longer be acceptable. This has forced vendors to use the services of Bulgarian notaries, either at the embassies or actually by travelling to a notary Bulgaria, which are often neither convenient nor cost effective.
Even when owners have used the Bulgarian embassy’s notary services, we have seen that in 2013 a 180% increase in the number of documents rejected by the lending banks. Cases where entire sets of documents, which cost 500 Euros to sign by the multiple owners, have been declined due to a middle name not being included by the vendor when handwriting their name under one of the many signatures. Likewise, documents have been rejected due to the notary stamps not being numbered consecutively, through no fault of the vendor, despite the official record clearly identifying the signatory and their consent to the content.
Selling to companies:
When the buyer for your property is a company, the aforementioned problems are multiplied. For example, if a company borrows to acquire your property, the bank will not only require the excessive documents from you the vendor, but also from the directors and the shareholders, each of whom must have life insurance and sign paperwork in their own language consenting to the purchase. If you can believe that a single commercial mortgage in Bulgaria requires no less than 290 signatures, then multiply this by each shareholder, then add in the time and cost to have all paperwork officially translated and certified, you quickly see the problem the bank’s policies create. In reality, if Microsoft was looking to buy your Sofia apartment to accommodate its executives, then the Bulgarian banks would expect Bill Gates himself to appear in branch and kneel before them. The end result is that they lose completely viable business through shear belligerence, but you too lose your buyer and thus its relevance is clear.
In a market where buyers are tough enough to find, it is remarkable that institutions willingly assist in racking up the costs and prolonging the conveyancing timeframe to inevitably maximise the risk of vendors being gazumped. However, this is the reality at the current time and all vendors should be aware of it. Agencies and solicitors who undertake the conveyancing will struggle at every step to comply with the demands of banks and notaries for varied documentation, often finding impossible and frustrating problems to solve resulting from red tape and shear bureaucracy. It is important for vendors to be aware of this and stick with the sale, even if the requests for bizarre and apparently unnecessary documents seem ridiculous.
Although vendors cannot do a great deal to help, should you be fortunate enough to have found a buyer and agreed a satisfactory price, our best advice is to act immediately upon any documentation that you are asked to sign, present or process by your agent or your solicitor. Your shortened timescale to react can often mean the difference between completing the sale or losing the buyer to a rival offer.