Sale of a property in Bulgaria using a Power of Attorney05 September 2017
If you are an owner of property (real estate) in Bulgaria and you wish to sell it using a Power of Attorney, using a representative, you should be aware of its content and effect.
There are varying opinions on the drafting of such a Power of Attorney and what it should contain in order to be valid under Bulgarian law. The main area of contention relates to whether a sale price must be mentioned. Accordingly, this issue was recently referred for consideration to the Bulgarian Supreme Court of Cassation.
It was argued that the Power of Attorney should be very detailed and contain individual terms in relation to the property, including the essential terms and conditions of the contract, specific sale price and the identity of the buyer. The Supreme Court of Cassation by its Interpretative Decision No 5/2014 (issued on 12 December 2016), adopted another point of view, according to which the essential terms and conditions, including the sale price, were not to be included on an obligatory basis. Pursuant to the Court's decision, Bulgarian legislation contains very few mandatory requirements on the content involved. Therefore, it is sufficient for the Power of Attorney to only set out the general will of the principal. It is not necessary to mention the detailed specification of the transaction as long as the principal’s intention can be determined. If a statute establishes certain requirements on the content, the Power of Attorney should meet them in order to be valid. The decision also states that a relationship between the principal and its representative is based on trust and the principal may, but is not obliged to, limit the powers granted by indicating the respective property, the specific price and buyer.
Additionally, the Interpretative Decision provides a response to the question as to what the legal affect of a completed sale, based on an invalid Power of Attorney or in excess of the rights granted to the representative. The Bulgarian Supreme Court of Cassation does not consider that such transaction is absolutely null and void. If the principal confirms or ratifies the performed sale, it will still be effective. Accordingly, the validation has a retrospective effect and the transaction is valid at the time of its execution. Only the principal or subsequent successors may claim that the transaction is void. With regard to third parties, such sale is valid, until is declared void.
In conclusion, it is highly recommended, when a property owner in Bulgaria decides to sell by a power of attorney, that advice is taken from an experienced Bulgarian lawyer on the contents of the document of Power of Attorney, in order to avoid any future legal problems and potential fraud.
For further information, contact:
Bojov Law Firm, Sofia, Bulgaria
t: +359 2 865 03 61
m: +359 8 84786297