The mortgage falls away by itself.
The attachment does not.
And that is exactly what shows up in the certificate of encumbrances (удостоверение за тежести), it is why the bank refuses to finance a resale, and it is why the property stays frozen.
A public auction (публична продан) is not a contract. There is no seller who answers for anything, no notary to check, and no preliminary contract in which anything can be agreed. There is an act of state authority.
The practical consequence is a single one, and a heavy one: no one on the other side is liable for the condition of the property or for the rights over it. In an ordinary deal the seller is liable for eviction and for hidden defects, and the notary checks the encumbrances and owes a warning. Here both are missing.
Ownership may have been established by possession
Under Art. 483 of the Civil Procedure Code (ГПК), the private enforcement agent (ЧСИ) describes the property after making sure that it belonged to the debtor on the day of the attachment (възбрана). But the law expressly allows that, in the absence of reliable data, this may be accepted on the basis of possession.
In other words, the machinery of the state can sell a property about which it has itself established only that someone holds it. Almost no one reads this article. How someone else’s possession turns into a right: acquisition by prescription.
The discount is not negotiated.
It is written into the code.
The starting price from which bidding begins at the first auction is 80 per cent of the valuation by the court-appointed expert (вещо лице) (Art. 485(4) of the Civil Procedure Code). If the auction does not take place, the new one starts at 90 per cent of the starting price of the first (Art. 494(2) of the Civil Procedure Code), which is 72 per cent of the valuation.
⚠️ Some legal portals still publish 75 and 60 per cent. That is an old version: the figure was changed by the act amending the Civil Procedure Code, State Gazette (ДВ) No. 86 of 27 October 2017. A legal portal without the date of the version is not a source for a verbatim quote from the law.
And the upper end, which almost no one calculates. Under Art. 489(6) of the Civil Procedure Code, a bid more than 30 per cent above the starting price is invalid. Starting from 80 per cent, this means bidding can lawfully reach 104 per cent of the valuation.
The statutory 20% discount disappears with a single competing bidder. And since each bidder is entitled to only one bid, there is no way to respond to someone else’s.
The line is the first mortgage
The true fact is Art. 175(1) of the Obligations and Contracts Act (ЗЗД): once a public auction is carried out, all mortgages on the property, as well as all rights in rem created after the first mortgage, are extinguished. The false conclusion is “so the property comes out clean”.
The provision has an internal limit in time. Everything after the first mortgage falls away. Everything before it remains. A parent’s right of use (право на ползване), a registered long-term lease, an easement in favour of a neighbouring property: if they predate the first mortgage, they survive the auction and bind the buyer.
And this is not rare. The debtor’s home is exempt from enforcement if he and his family have no other, and the protection falls away when there is a mortgage on the property in favour of the enforcing creditor. So almost every home that reaches public auction has been mortgaged, and the first mortgage is rarely the first document registered on the property’s record.
A lease has its own regime: registered after the first mortgage, it cannot be asserted against the buyer, and delivery of possession (въвод във владение) proceeds against the tenant as well. Registered before it, it binds the buyer for its whole term. Unregistered but with a certified date, it binds for up to one year. What a right of use looks like from the inside: a property with a registered right of use.
⚠️ And the most important point in practice: the notice under Art. 487(1) of the Civil Procedure Code must state the owner, the description, whether the property is mortgaged, whether there are limited rights in rem, registered statements of claim, attachments and lease contracts, the starting price and the dates. But only whether they exist, not when they date from relative to the mortgage. The two most recent Varna notices on the portal of the Chamber of Private Enforcement Agents (КЧСИ), checked on 4 September 2026, have an empty field for encumbrances.
The most expensive misunderstanding
in the whole topic.
Half of the legal websites write that attachments are lifted automatically or are deleted when the decree becomes final. Both are wrong, and the text they cite does not mention attachments at all.
The Supreme Court of Cassation (Върховен касационен съд) ruled explicitly: registered attachments are not deleted after a public auction is held, except in the cases expressly provided for by law (Interpretative Decision No. 1/2015 of the General Assembly of the Civil and Commercial Chambers, ОСГТК, delivered on 10 July 2018, item 3).
The reason is protective: the attachment protects the enforcing creditor if the sale falls through and the property returns to the debtor. Those entitled to request deletion are the authority or person that imposed the attachment, not the buyer as such. The buyer can apply to the registry judge (съдия по вписванията) once the decree has become final, but at his own risk, and the burden is on him to prove that the proceedings are over and there are no unsatisfied creditors.
The consequence is financial, not theoretical. While the attachment stays on the property’s record, no bank will finance a resale and no buyer will pay against such a certificate of encumbrances. The buyer owns something he cannot sell.
Two weeks, with your own money
The bid deposit (задатък) is 10% of the starting price, is paid before the bid is submitted and is lost if the price is not paid. Each bidder is entitled to only one bid. The deadline for paying the full price is 14 days from the close of the auction, while for the next bidder in line, if the first does not pay, the law has stayed at one week, because the correction there was missed when the deadline was extended in 2017.
That is also why the bank practically drops out. The chain with a mortgage loan is signing, registration, a certificate of the registered charge, disbursement, and it takes five to ten working days after the deal alone. Here there is no deal on which a mortgage can be created before the price has been paid in full. The bank would have to finance a purchase where no one knows in advance what amount will win the auction, the deadline is fourteen calendar days, and an attachment may remain registered on the property.
That is why a public auction is in practice a market for buyers with their own funds. The property comes at a twenty per cent discount, but it is paid in cash within two weeks. The two sentences are one sentence. How the usual chain works: the mortgage loan.
You have paid everything
and you are still not the owner.
Under Art. 496(2) of the Civil Procedure Code, the buyer acquires the rights from the day the award decree becomes final (постановление за възлагане). Not from payment and not from the decree itself. Between paying the full price and ownership stands a two-week appeal period, and if an appeal is filed, an indefinite time, because the law sets no deadline for the regional court.
And the acquisition is derivative: “all the rights the debtor had”. He had an undivided share, you get an undivided share. He had nothing, you get nothing. With a co-owned property, under Art. 500 of the Civil Procedure Code only the debtor’s undivided share is sold, which means you become a co-owner with strangers.
If it later turns out that the debtor was not the owner, Art. 499 of the Civil Procedure Code allows the buyer to claim back the price paid. The way back exists, but it goes through an ownership claim, a final judgment, a separate writ of execution and collection. The enforcement agent’s fee, the local tax and money put into renovation are not refunded by anyone through this route.
Delivery of possession proceeds against anyone who holds the property, and that person can defend only with an ownership claim. But there is no deadline for delivery of possession: the law says that it is carried out, not when. And against a person with a title that can be asserted against the buyer, meaning a right of use or a lease from before the first mortgage, delivery of possession does not work at all.
The property is cheaper. The day is more expensive.
The costs on top of the price are borne entirely by the buyer: a fee for the award decree of 1.5% of the sale price, capped at €1,533.88 plus VAT, the local acquisition tax (местен данък при придобиване) of 3% for Varna, registration at 0.1%, and delivery of possession at 1% plus VAT if the property is occupied.
The same property, the same price of €100,000 in Varna. At public auction: €4,900, which is 4.90%. With delivery of possession: €6,100, which is 6.10%. Through a notarial sale: €3,665, which is 3.67%. The difference is €1,234.51 in favour of the notarial sale, and €2,434.51 with delivery of possession.
The reason is the award fee: 1.5% of the price is more than the notary fee for the same price, even after the cap. And one detail that reverses the expectation about the rate: for Varna the local tax is 3%, the statutory maximum, raised by a decision of the municipal council. The 2.5% figure that appears in general articles is not the Varna figure.
How much of the discount remains when buying at the starting price: about 16% at the first auction and about 33% at the new one. When bidding up to the legal cap, however, you end up 8.6% above the valuation. How five different numbers come about for one property: the real price.
175 of 1,444.
Second place in the country.
A snapshot of the portal of the Chamber of Private Enforcement Agents on 4 September 2026: 1,444 properties advertised nationwide, of which Varna 175, against 137 for Burgas, 50 for Plovdiv and 38 for Sofia City. Varna has 4.6 times more than Sofia City.
⚠️ The figure is a snapshot of one day, not an annual volume: advertised properties change constantly. But the order of magnitude says enough, namely that this is not something exotic but a parallel market with around one hundred and seventy properties in the city on any given day.
And three figures that sources get wrong systematically. The starting price: some portals give 75%, the figure in force is 80%. The payment deadline: they give one week, the law has given two since 2017. The deadline to appeal the decree: some portals give one week, the law has given two since 2019.
Separately, there is a tax difference that cannot be seen from the notice: where the debtor is registered under the VAT Act (ЗДДС), the tax is included in the price. A registered person uses input tax credit, an individual does not. For the same property at the same price, a company and an individual pay a different real price, and the difference goes up to 20%. This is especially common with studios, commercial units and parking spaces.
Frequently asked questions
Do all encumbrances fall away at a public auction?
No. Under Art. 175(1) of the Obligations and Contracts Act, once a public auction is carried out, all mortgages on the property are extinguished, as are the rights in rem created after the first mortgage. Rights created before the first mortgage remain and bind the buyer. Since almost every home that reaches public auction has been mortgaged, the first mortgage always has a date, and everything registered before it survives the auction.
Is the attachment deleted by the public auction?
No. Interpretative Decision No. 1/2015 of the General Assembly of the Civil and Commercial Chambers of the Supreme Court of Cassation, delivered on 10 July 2018, held that registered attachments are not deleted after a public auction is held, except in the cases expressly provided for by law. Those entitled to request deletion are the authority or person that imposed the attachment, not the buyer as such. While the attachment stays on the property’s record, the property is practically unsellable and cannot be financed.
Can a property from a public auction be bought with a mortgage loan?
In practice, with great difficulty. The deadline for paying the full price is fourteen days from the close of the auction, while with a mortgage loan the registration of the mortgage and the disbursement happen after the deal. Here there is no deal on which a mortgage can be created before the price has been paid in full. On top of that, no one knows in advance what amount will win the auction, and an attachment may remain registered on the property. That is why a public auction is in practice a market for buyers with their own funds.
What price does bidding start from, and how high can it go?
The starting price at the first public auction is 80 per cent of the court-appointed expert’s valuation, and at the new auction 90 per cent of the starting price of the first, which is 72 per cent of the valuation. A bid more than 30 per cent above the starting price is invalid, so starting from 80 per cent, bidding can lawfully reach 104 per cent of the valuation. The statutory discount disappears with a single competing bidder.
One certificate, before the bid deposit
Obtain a certificate of encumbrances and look for two things: whether an attachment is registered, and the date of the first mortgage. Everything registered before it remains your problem, and the notice will not tell you. The bid deposit is 10% and it is forfeited, so the check costs two orders of magnitude less than the mistake.
Send us the notice and the property’s record. We send back which encumbrances fall away, which remain, and how much the day the property becomes yours will cost.
This material is not legal advice and is not a recommendation to take part in a particular auction. The specific case should be checked by a lawyer.
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