Off-plan, you are buying
a company, not a building
A promise is worth exactly as much as the one who makes it, and exactly as much as the contract says. Between the two stands a check that cannot be done in half an hour online.
The buyer asked the only question that came to mind: when will it be ready. The answer was: in a month. The problem is that off-plan you are not buying a building but a company.
The stages Act 14, 15 and 16 are covered in a separate article and are not repeated here. This text goes through the rest: who is on the other side, what cannot be seen in the registers, and which sentences in the contract decide the outcome. If you are still choosing between building types, start with panel block or new construction.
Three registers, not one
The Commercial Register (Търговски регистър) shows capital, history, responsible persons, and any insolvency or liquidation proceedings that have been opened. It does not show a pending petition, nor the company’s condition between two annual reports. A company that looks clean today may have an insolvency start date set months in the past.
The Property Register (Имотен регистър) shows ownership of the land, mortgages, attachments, registered statements of claim, and the right to build (право на строеж) that has been created, with its date. It does not show preliminary contracts (предварителни договори), because they are not registered.
The Central Register of Special Pledges (Централен регистър на особените залози) is the third, and the buyer usually does not know it exists. A commercial enterprise can be pledged under Article 4(1)(6) of the Special Pledges Act (ЗОЗ), and under Article 21(3), second sentence, of the same Act, if individual assets are specified in the pledge contract, the pledge weighs on them even after they are separated from the enterprise. An apartment sold by a pledged enterprise can carry the pledge with it.
Outside the registers remain the approved investment project, which is the binding document, not the rendering; the company’s previously completed buildings; and in whose favour and when the right to build was created.
Banks that finance purchases at Act 14 work with approved lists of developers that have passed a preliminary check. The buyer has no access to the lists and does not see the criteria. The most thorough check on the market is done, but not by the buyer and not for the buyer.
The clock starts
before your purchase.
Under Article 67 of the Property Act (ЗС), the right to build is extinguished in favour of the landowner if it is not exercised within 5 years. The period runs from the creation of the right, not from the purchase, and later transfers do not start a new period.
“Exercised” means completed rough construction (груб строеж), not an issued permit and not an excavated foundation slab (Interpretative Decision No 1 of 4 May 2012 of the General Assembly of the Civil Chambers of the Supreme Court of Cassation, ОСГК на ВКС). The definition of rough construction is in the other article and is not repeated here.
A buyer who comes in during the fourth year inherits what is left of someone else’s clock. The date lives in the notarial deed (нотариален акт) creating the right, registered in the Property Register. It is not in the brochure, it is not in the conversation, and nobody asks, because nobody thinks of it.
A right created in 2022. A buyer comes in in 2025 with a 20% advance under a preliminary contract. In 2027 the five years run out without completed rough construction. Against €20,000 at a price of €100,000 stands an unsecured claim against a company that, at exactly that moment, usually has no money.
When the period expires, the right is extinguished in favour of the landowner, who acquires what has been built. In the classic “compensation in exchange for a right to build” scheme, the unfinished building goes to the owner of the plot, not to the developer. The buyer has acquired a derivative right, and the extinguishment of the main right takes the derivative one with it.
The bad sign is not the mortgage. The bad sign is the missing clause.
Almost every developer builds with a bank loan, and the collateral is a mortgage on the land. Its presence is not a bad sign in itself: it means a bank has approved the project, that is, the project has been through someone else’s assessment.
The mortgage, however, does not stay in the land. Under the principle of accession (Article 92 in conjunction with Article 111 of the Property Act), the encumbrance also extends to what is built. The wording here stays careful on purpose: the case law of the Supreme Court of Cassation from 2014 and 2015 sets additional conditions, among them an approved project and rough construction having been reached. There is no single clean rule, only a field where the matter is disputed.
The practical side is simpler and more unpleasant. The contract must contain a mechanism for removing the mortgage from the specific apartment against the payment for it. A general promise that “the encumbrances will be removed” is tied neither to the specific unit nor to a specific payment.
Without such a clause, the buyer receives a notarial deed for a mortgaged property. The fee for removing the mortgage is small, half of the registration fee under Article 3(1) of the Tariff of the Registry Agency (Агенция по вписванията). The problem is not the fee but the bank’s consent, and that depends on whether the developer has serviced its loan.
And if the enterprise was under a special pledge with the asset described, the apartment carries the pledge as well.
Construction acts or calendar dates:
the number almost nobody looks at.
The percentages are always discussed. The other dimension of the same schedule almost never is: what the instalments are tied to.
Tied to construction acts: a delay in construction also postpones the payment. The risk of delay stays with the developer.
Tied to calendar dates: the buyer pays on a schedule for construction that is falling behind. They pay for a stage that has not been reached, and in practice they finance the delay.
The two options look the same in a table of percentages. They differ by a few words in the neighbouring sentence, which the buyer reads last.
For reference: a typical split is 10% at the preliminary contract, 30% at Act 14, 30% at Act 15 and 30% at Act 16 (imotni.com, 10 May 2025). Bank logic wants between 20 and 30% of own funds at the start, with a minimum down payment of 10% (creditland.bg, 2 September 2025).
Between the two extremes there is no “right” percentage. There is a judgement about who takes which risk and at what price, and it is made on the specific contract, not on a table in an article.
Completely legal and completely unexpected
After the building permit is issued, only minor deviations from the approved investment project are allowed, under Article 154(1) of the Spatial Development Act (ЗУТ). The dividing line is in paragraph 2, points 1 to 8, and it is almost always overlooked.
Points 1 to 4 (breach of the detailed development plan, of protection regimes, incompatibility with the intended use of the area, breach of construction rules and standards) are not allowed at all after the building permit is issued.
Points 5 to 8 (a change to the building structure and the type of structural elements, a change of use of units or a substantial change to common parts, a change to common installations, a change to transmission and supply lines) are allowed at the request of the commissioning party, but with the notarised consent of the interested parties under Article 149(2) (Article 154(5) of the Spatial Development Act).
The practical question is who is an interested party at the moment of the change. A buyer without a notarial deed is not an owner but a party to a contract under the law of obligations, and their position depends entirely on the contract. Whether a particular buyer is such a party depends on the document and on the stage.
That is where the changes come from that people only learn about at handover: a moved shaft, a smaller common entrance, a room that has become an apartment. And a clause allowing “minor changes at the developer’s discretion”, combined with Article 154 of the Spatial Development Act, covers more than the buyer imagines.
The protection that
may not survive in court.
A contractual penalty (неустойка) secures performance and serves as compensation for the damage from non-performance, without that damage having to be proven, under Article 92(1) of the Obligations and Contracts Act (ЗЗД). That is exactly why it looks like the protection that solves everything.
A court can, however, reduce it when it is excessive compared with the damage suffered (Article 92(2) of the Obligations and Contracts Act). The prohibition under Article 309 of the Commerce Act (ТЗ) applies only to a penalty in a commercial transaction between traders. A buyer who is an individual is not a trader, so this protection does not work in their favour and the agreed number can be reduced.
More serious: a penalty agreed outside its inherent securing, compensatory and sanctioning functions offends good morals and is null and void (Interpretative Decision No 1/2009 of 15 June 2010 of the General Assembly of the Commercial Chambers of the Supreme Court of Cassation, item 3). A void clause is not reduced. It simply does not exist.
The contract usually also contains a penalty for delay by the buyer. The two are rarely symmetrical, either in size or in the mechanism that triggers them.
And termination under Article 87 of the Obligations and Contracts Act returns the buyer to the starting position only on paper: the claim for repayment of what was paid exists, and it is collected from the same company that failed to build. The action under Article 19(3) of the Obligations and Contracts Act can transfer only what legally exists, and before rough construction the subject is the right to build (Article 181(1) of the Spatial Development Act), not an apartment. A won court case does not produce a building. More on the mechanics of this contract: the preliminary contract.
And most importantly:
who pays for them.
The right instrument when paying before performance is an advance payment guarantee, issued by a bank on the developer’s instructions in favour of the buyer. Under the DSK Bank Tariff for business clients, in force from 7 July 2026, issuing one that is fully secured with cash and government securities costs “0.35% of the guarantee amount, but min. €50 per quarter or part thereof”, plus €25 for processing the request and €30 for SWIFT.
The point is not the price but who pays it. The guarantee is issued on the developer’s instructions, so the developer pays the commission and builds it into the price. A guarantee that costs the buyer nothing does not exist. Fully cash collateral means that the developer blocks its own funds: that is why small developers do not offer such an instrument, and large ones include it in a higher price.
Escrow and trust accounts are two different things: a bank escrow account, and a trust account (доверителна сметка) held by a notary or a lawyer. The additional fees are about €51 to €256 (BGN 100 to 500 at the fixed rate of 1 EUR = 1.95583 BGN), based on market observation from agencies, not on a tariff: the Tariff of Notary Fees under the Notaries and Notarial Activity Act (ЗННД) has no separate item for a trust account. The limitation is one of principle: escrow protects the payment, not the construction. It solves the risk “I paid and the deed was not registered”, not the risk “I paid and the building stopped”.
A notarial deed immediately after Act 14 is the strongest protection, but it brings the costs forward. In Varna at a price of €100,000: a notary fee including VAT of €565.49, local tax of 3% (€3,000.00) and registration of 0.1% (€100.00), a total of €3,665.49, paid for a unit that is walls and a roof. If the project stops after that, nobody returns this money.
Frequently asked questions
What exactly am I buying before the building is built?
Before the rough construction is completed, the apartment does not legally exist. The subject of the deal is a right to build, a limited right in rem over someone else’s land. What changes at each following stage is covered in detail in a separate article on Act 14, 15 and 16.
Why do I need to know when the right to build was created?
Because under Article 67 of the Property Act the right to build is extinguished in favour of the landowner if it is not exercised within 5 years. The period runs from the creation of the right, not from the date of your purchase, and later transfers do not start a new period. The date is in the notarial deed creating the right, registered in the Property Register.
Does a mortgage on the land mean the developer is risky?
Not in itself. A mortgage means that a bank has financed the project, that is, the project has been through the bank’s assessment. The encumbrance, however, also extends to what is built under the principle of accession, and the case law of the Supreme Court of Cassation sets additional conditions. The essential difference is whether the contract contains a mechanism for removing the mortgage from the specific apartment against the payment for it.
Does the bank guarantee protect me fully?
The advance payment guarantee is issued by a bank on the developer’s instructions and covers the money returned, not the finished building. The bank’s commission is paid by the developer and is built into the price. An escrow account has the same limitation: it protects the payment, not the construction.
Send us two things
The off-plan discount is real, and that is exactly why it is also the price of a risk that someone takes on instead of the developer. The three registers tell you who is on the other side, the contract tells you what happens if the building does not happen, and both are read before the meeting, not after it.
If you are looking at an off-plan property, send us the date the right to build was created and the stage of construction. We send back how much is left on the clock under Article 67 of the Property Act and which of the protections actually exist in the specific contract.
This material is not legal advice. The text of a specific contract should be checked by a lawyer for the specific deal.
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