May 19, 2023
Blog
What do we need to know when buying а real estate?
Buying and selling a property is an important step in everyone's life. Therefore, such a deal should be approached carefully and an informed decision should be made.
This type of deals is associated with many subtleties and moments, which can be a problem later if not approached with caution. It is important that those involved in real estate deals have a clear understanding of the laws regarding these types of deals to ensure that their rights are protected and the deals are legally sound. Consulting a lawyer with expertise in this area can save you the stress and uncertainty that can arise during the entire property buying procedure.
In the following lines we will list the things that in our opinion can be a major problem and for which you should be careful when buying and selling a property.
1. Checking ownership.
This is one of the most important elements and processes of a real estate acquisition transaction. All previous deals on the property are checked in detail, as well as the participants in them. The aim is to establish whether the person who currently identifies himself as the owner is indeed such and how he acquired the property. We advise that ownership be verified back at least 10 years.
2. Watch out for encumbrances on the property.
It is important to establish whether there are encumbrances on the property to be acquired - foreclosures, mortgages, limited property rights, etc. When transferring the ownership of a property, the rights of third parties are retained. Failure to carry out a good quality search may cause problems for the potential new owner and restrict his exercise of property rights.
The Certificate of Encumbrances on Property provides information on all entries, notations and deletions of encumbrances and rights at the time of its preparation or the lack thereof.
It is important to check these encumbrances before signing a preliminary agreement. Thus, if there is a foreclosure and/or mortgage registered on the property, the preliminary agreement may stipulate an obligation for the seller to repay his obligations to creditors and to ensure the deletion of encumbrances before the notarial deed of sale.
3. Preliminary agreement.
When purchasing real estate, the preparation of the definitive deal, which will transfer the ownership of the property, begins with the signing of a preliminary agreement to protect the rights of the seller or buyer until the moment of notarization of the transaction. This agreementmust include all the terms and conditions that the definitive agreement will include - price, parties, deadline for the final agreement, etc. Usually, the parties agree that part of the sale price will then be paid when the preliminary agreement is signed. By signing it, the parties undertake in the future to sign a definitive agreement before a notary, in the form of a notarial act, but under all the conditions mentioned in the preliminary agreement.
Either of the parties to the preliminary agreement may bring an action to have it declared a definitive agreement if it has fulfilled its obligations under the preliminary agreement. In this case, the definitive agreement shall be deemed to have been concluded from the date of the court decision.
Another function of the preliminary agreement is to stop the offering of the specific property on the market. The process is secured by the buyer paying a certain percentage of the total value of the property as a down payment.
It is common for real estate agencies to offer their clients template preliminary agreements. Given their importance, it is advisable to have it drawn up or at least checked by a lawyer specialising in this area. This will largely reduce the risk of concluding an unfavorable deal.
4. Preparation of documents before finalizing the deal.
After signing the preliminary agreement, all necessary documents must be prepared for the signing of the deal before a notary. Before that, it is good to check again for any encumbrances on the property to be purchased. To finalize the deal, a set of documents such as Current sketch of the property, Current tax assessment of the property, etc. are required.
The documentation to be submitted to the notary is really voluminous, the obligations of the parties are many. Their preparation requires time and effort, so you need to arm yourself with patience or leave this to people who are specialists in the field.
5. How can we help you?
KGK Law Firm's team can assist you in the entire process of acquiring or selling real estate - from obtaining and drafting all documents necessary to conclude your real estate transaction to its final execution before a notary. KGK Law Firm has extensive experience in various real estate transactions, and in the last year alone we have advised on transactions worth over BGN 35 million. You can rely on us to provide reliable advice and quality legal assistance.
Investments in construction and real estate are one of the main driving forces of the Bulgarian and global economy. KGK Law Firm represents local and foreign investors before administrative authorities, contractors and courts.
In addition to mediation, negotiation and preparation of the necessary documentation, KGK Law Firm represents legal entities and individuals in every phase until the desired result is achieved.
Do not hesitate to contact us.
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