Покупка на имот "на зелено" - какво да проверим

Buying property “off plan” can give you the opportunity to choose a new home at a better price and to participate in shaping it while construction is still underway.

However, the transaction is concluded while the building has not yet been completed, and it often takes about two years, sometimes more, until it is put into operation. During this period, delays, changes to the project, financing problems or encumbrances over the property may arise. Therefore, a good offer should not be assessed only by its price and visualisations. The most important factors are the investor, the documents, the contract and the way in which you will make payments.

Here are the checks that can help you make a more informed decision and limit the risks.

1. Start by Checking the Investor

The investor is one of the main factors determining whether the project will be completed with quality and on time. Before committing to the transaction, look for real information about their experience, financial position and previous developments.

History of Completed Projects

Review what the investor has built so far. It is advisable to visit older buildings completed by the investor and see how they look after several years of use. Check whether there are traces of leaks, subsidence, façade problems or other visible defects. Speaking with owners in already completed developments may also give you valuable information about quality and compliance with deadlines.

Legal and Financial Position

Check the company in the Commercial Register and the Property Register. Pay attention to attachments, court proceedings, liabilities and other circumstances that may indicate a financial risk. Often, the specific project is carried out by a new company created specifically for it. In such a case, it is important to establish which company is the parent company and whether there is a real company with experience, assets and a good reputation behind the project.

Encumbrances over the Land and the Future Property

It is not unusual for construction to be financed by a bank loan and for there to be a mortgage over the land. This in itself does not mean that the transaction is problematic. The important thing is for the preliminary contract to clearly state that the property will be transferred to you free of encumbrances and third-party rights. The contract should also provide for a specific mechanism for their deletion.

2. Check the Documents and the Exact Status of the Property

Before you sign or pay a significant amount, the documents should be reviewed by a specialist who protects your interests. The lawyers of the real estate agency, the investor or the financing bank may participate in the process, but their role and priorities are not the same as those of your lawyer.

Effective Building Permit

The building permit is one of the most important documents. It is not enough for it simply to have been issued — it must have entered into force, meaning that the period during which it could be appealed must have expired. For properties in Sofia, information can also be checked in the public register of Sofia Municipality.

Status of the Property

Check how the property is described in the construction documents and in the preliminary contract — as an “apartment” or as a property with another status, for example an “atelier”, “studio” or “office”. With such properties, difficulties may arise with permanent address registration, the electricity supply regime, requirements for natural light or bank financing.

Реална площ и архитектурен проект

Поискайте одобрените архитектурни проекти и проверете каква е чистата застроена площ на имота, какъв дял от цената се отнася за общите части и кои обекти са разположени около него. Описанието в предварителния договор трябва да съответства на одобрения проект – включително етаж, изложение, граници, помещения и прилежащи части.

3. Link Payments to the Actual Progress of Construction

One of the most important principles when buying “off plan” is that payments should follow actually reached construction stages, certified by the relevant documents, and not only pre-determined calendar dates.

Initial Instalment

При подписване на предварителния договор обичайно се заплащат между 10% и 20% от цената. Това показва сериозно намерение за покупка, без още в началото да излагате на риск прекалено голяма част от средствата си.

“Rough Construction” Stage

At this stage, the building has a completed structure, external enclosing walls and a roof. Reaching the “rough construction” stage has important legal consequences because the established right to build is transformed into ownership right. Often, it is precisely then that ownership of the specific separate property is transferred and a larger part of the price is paid — usually between 30% and 60%.

Important:the reached “rough construction” stage is proven by a protocol under Article 181, paragraph 3 of the Spatial Development Act, and not by the so-called Act 14. These are different documents and should not be treated as interchangeable.

Акт 15 и въвеждане в експлоатация

The practice is for part of the price — approximately between 20% and 40% — to be paid upon completion of construction, signing of Act 15 and putting the building into operation, often referred to as “Act 16”. The larger the amount that remains due until final completion, the stronger the incentive for the investor to comply with the agreed quality and deadlines.

It is advisable for the last approximately 10%–15% of the price to be paid only after the building has been put into operation. This is usually the strongest practical mechanism available to the buyer to insist on completion of the project.

Do not forget: until ownership of the specific property is transferred to you, you are still not its owner. In practice, you are providing funds with which the investor finances the construction, and your right is a contractual claim against them.

4. The Preliminary Contract Should Protect You, Not Merely Describe the Transaction

The preliminary contract is the main document that regulates your relationship with the investor until the final transfer of the property. Therefore, it should not be viewed as a standard formality. It should provide for what happens at each stage and what your rights are in the event of delay or non-performance.

Подробно описание на целия процес

Договорът следва да урежда проектирането, издаването и влизането в сила на разрешението за строеж, строителните етапи, въвеждането в експлоатация, прехвърлянето на собствеността, заличаването на тежести, степента на завършеност и отговорността на страните. Колкото по-ясни са тези правила, толкова по-малко място остава за различни тълкувания.

Detailed Description of the Entire Process

The contract should regulate the design, the issuance and entry into force of the building permit, the construction stages, putting into operation, transfer of ownership, deletion of encumbrances, degree of completion and liability of the parties. The clearer these rules are, the less room remains for different interpretations.

Specific Deadlines and Real Penalties

The contract should contain a clear final date for putting the building into operation. It is advisable to provide for a monthly penalty for each period of delay, as well as the right to terminate the contract and receive back the amounts paid if the delay exceeds a reasonably determined period — for example, six months.

Technical Specification

The contract should have a detailed appendix regarding the materials, installations and degree of completion of the property and the common parts. General expressions such as “luxury execution” are not sufficient when there is no specific description of what exactly will be handed over.

5. Secure the Financing on Time and Check What Will Be Around the Building

A good check does not end with the apartment. It is important to know in advance how the purchase will be financed and what the development plans for the area are.

Bank Loan and Own Contribution

If you will use a mortgage loan, keep in mind that banks usually start financing the purchase after the “rough construction” stage has been reached. Check whether the bank financing the project offers terms for buyers in the building. Prepare the necessary documents as early as possible, preferably before signing the preliminary contract, so that you do not find yourself bound by payments for which you do not have secured financing.

With bank financing, it is usually necessary to have your own funds for self-participation. It is advisable to provide for a minimum of approximately 10%–15% of the price, as well as additional funds for the transaction costs and completion of the property.

Future Development and Infrastructure

Check the detailed development plan for the area and the plans for the neighbouring properties. The open space in front of your future window may be built up over time. Inform yourself also about the plans for roads, street lighting, sewerage, public transport and improvement of the area. These circumstances affect both everyday comfort and the future value of the property.

Buying “Off Plan” Can Be a Good Transaction When the Risk Has Been Assessed in Advance

The safest approach is not to rush and not to make a decision solely on the basis of advertising materials or the promised price. Check the investor, the construction documents, the status and the encumbrances of the property. Agree on payments that follow the actual stages of construction and insist that the preliminary contract contain clear deadlines, penalties and protection mechanisms.

The market offers good opportunities, but the safer investment is usually the one where the buyer asks the right questions and has proper documents even before signing.

The team of KGK Law Firm has extensive experience in the field of property law and real estate transactions. We assist our clients at every stage of the process — from the legal review of the investor and the property to the review and negotiation of the preliminary contract and the finalisation of the transaction.

If you have any questions or need assistance with buying property “off plan”, you can contact us.