Property without a title deed in Bulgaria: notary check, tax

Your grandfather’s house in the village has been yours for thirty years. You pay the tax, you mow the yard, you replaced the roof. But there is no document of ownership anywhere, and now you want to sell the house or leave it to your children.

The way to that document is called a fact-finding check (обстоятелствена проверка). It is not a check that someone carries out on your behalf. It is a procedure before a notary in which you prove that you have possessed the property long enough to have become its owner by prescription (придобивна давност, the Bulgarian equivalent of adverse possession).

The two routes to a declaratory notary deed

Many people say “fact-finding check” when what they actually need is something simpler. Art. 587 of the Code of Civil Procedure (ГПК) provides two separate routes, and they cost different amounts of time and nerves.

The first is by documents. If you have written evidence of your right, for example a decision of the land commission (поземлена комисия), an old deed in the name of the deceased together with a certificate of heirs (удостоверение за наследници), a partition agreement or a court judgment, the notary assesses those. There are no witnesses and no mayor.

The second route is the fact-finding check. It switches on only when written evidence is missing or is not enough.

Note one thing. You do not simply “find” the witnesses yourself. The law says the mayor names them, on the owner’s instructions. That is why the application goes through the municipality before it reaches the notary.

10 years or 5: which applies to you

The period depends on whether you are a possessor in good faith. The rule is short and is found in Art. 79 of the Property Act (ЗС).

Good faith does not mean “honest”. It means that you received the property on a legal ground that was capable of making you the owner, without knowing about the problem with it. The classic case is buying from a person who turned out not to be the owner. It is enough that you did not know about the problem at the moment you received the property, and good faith is presumed until the opposite is proved (ЗС, Art. 70).

If there is no ground at all, the period is 10 years. That is the case for most village houses for which there has never been a document of ownership.

Possession and mere holding are not the same thing

This is where cases most often fall apart. The law distinguishes two kinds of actual control, possession (владение) and holding (държане), and only one of them leads to ownership.

A tenant can live in a property for years and never become the owner, because the tenant holds it for someone else. The same goes for a person who looks after the house “for the cousins”.

The trap that defeats heirs

The most common real-life situation is also the most dangerous. The property is inherited, there are five heirs, but only one lives in it and has looked after it for decades. It looks like a clear case of prescription. It is not.

The law presumes that whoever exercises actual control exercises it for themselves.

Between co-owners, however, this rule works in a special way. In Interpretative Decision No. 1 of 6 August 2012 in interpretative case No. 1/2012 of the General Assembly of the Civil Chamber (ОСГК) of the Supreme Court of Cassation (ВКС) (an interpretative decision is a ruling that fixes how the courts must apply the law) the court explains that on inheritance, the possession of the deceased continues through all the heirs, even if only one of them stays in the property. The one who lives there possesses their own share and holds the shares of the others on their behalf. For prescription to start running for the other shares, that person must change their intention through open acts that deny the rights of the others and have come to their knowledge.

Which properties are ruled out altogether

Before you spend money on certificates, check whether the property is of the kind for which prescription does not run.

Public municipal property includes, for example, properties designated by law, properties serving the functions of local self-government and other properties for the lasting satisfaction of public needs of local importance, designated by the municipal council (Municipal Property Act (ЗОС), Art. 3(2)). For the state there is a similar list in Art. 2(2) of the State Property Act (ЗДС). All other state and municipal properties are private property of the state or the municipality and can in principle be acquired by prescription.

For private state and municipal property, however, a moratorium applied for years. From 1 June 2006 prescription for those properties was suspended by § 1(1) of the Act Supplementing the Property Act, and its term was extended several times. The Constitutional Court declared it unconstitutional.

The third brake is a planning one, not a property-law one. If you possess a physically defined part of someone else’s plot of land within the boundaries of a settlement, rather than the whole plot, that part must be capable of becoming a separate plot (Spatial Development Act (ЗУТ), Art. 200).

The minimum sizes under Art. 19(1) ЗУТ for low-rise residential development are: in towns at least 14 m of frontage and 300 sq. m of area; in resort settlements and resort zones 16 m and 500 sq. m; in villa zones 18 m and 600 sq. m; in villages with predominantly flat terrain 16 m and 500 sq. m, and in specific terrain and farming conditions and on main streets 14 m and 300 sq. m; in villages with predominantly steep terrain 12 m and 250 sq. m.

The law allows these sizes to be reduced by at most one fifth because of economic, technical or terrain conditions or because of the position of existing masonry buildings (Art. 19(3)). This happens only on the basis of an opinion of the municipal expert council. There is also an exception to the rule itself for the case in which the possessed piece is joined to a neighbouring property.

The steps: first the municipality, then the notary

The procedure has two clearly separate phases. The first is administrative and you run it. The second is notarial and the notary runs it. The description of the first phase below follows municipal practice, not the text of the law, so details differ.

The tax: paid as for a gift, not as for a purchase

This is where people get the most unpleasant surprise. Acquisition by prescription is subject to local tax, and the law expressly equates it with a gratuitous acquisition (Local Taxes and Fees Act (ЗМДТ), Art. 44(3)).

The difference in money is large. The rate on an acquisition for consideration, that is, an ordinary purchase and sale, is set by the municipal council within a range of 0.1 to 3 per cent (Art. 47(2)). The rates for gratuitous acquisition are in Art. 47(1): from 0.4 to 0.8 per cent for a gift between brothers and sisters and their children, and from 3.3 to 6.6 per cent in all other cases.

Art. 47 itself does not mention prescription expressly, so the exact rate is a matter of interpretation. The logic is as follows. Art. 44(3) taxes prescription as a “tax on gratuitous acquisition”, and the rates for gratuitous acquisition are in Art. 47(1). With prescription there is no transferor from whom you receive the property, so there is no way to be their brother, sister or child. What remains is the range of 3.3 to 6.6 per cent. By the same logic the exemption for gifts between relatives in the direct line and between spouses does not apply either (Art. 44(6)). The exact percentage is in your municipality’s ordinance, so ask for the calculation in advance.

The base on which the tax is calculated also has a peculiarity. For prescription it is set not as of some past date but as of the moment the deed is issued (ЗМДТ, Art. 46(1)). There is no price, so in practice the base is the tax valuation of the property.

An example calculation: with a tax valuation of €20,000 and a rate of 5 per cent in the municipality’s ordinance, the tax is €1,000. It is paid in the municipality where the property is located, at the moment the deed is issued (ЗМДТ, Art. 49), and the notary issues the deed after establishing that the tax has been paid.

Other costs

Besides the local tax you pay a notary fee under the Tariff of Notary Fees, adopted by the Council of Ministers (Notaries and Notarial Activity Act (ЗННД), Art. 85). For the fact-finding check the Tariff applies the same proportional scale as for a notary deed on a transaction (item 11 in conjunction with item 8). You can see its logic in our article on notary fees.

The conversion follows Art. 11(2) and Arts. 12 and 13 of the Act on the Introduction of the Euro in the Republic of Bulgaria (ЗВЕРБ). Where the deed states no price, the recording fee is calculated on the tax valuation under Annex No. 2 to ЗМДТ (Registry Agency Tariff, Art. 2(1)). On top come the cadastral sketch, the tax valuation certificate and, if you hire one, a lawyer.

How long it takes

The law sets no deadline for the whole procedure. The municipal service has a deadline, and each municipality sets its own. In the Devin municipality’s entry in the Administrative Register it is 7 days, the fee is €5.11 and the express service costs 2.5 times more. Check your own municipality’s entry instead of planning around someone else’s number.

In practice time goes on two things. The first is the round of certifications, which drags on in big municipalities. The second is finding a notary who accepts fact-finding checks. Law firms that handle such files write that relatively few notaries take them on, and give an overall average duration of 10 to 12 months.

What the declaratory deed does not do

The deed is a document of ownership and with it you can sell, mortgage and bequeath. Two things, however, do not follow from it.

First, it does not legalise construction. If the house has no building permits (строителни книжа), it stays without them. Your ownership is recognised, while the legality of the construction is a separate question under the Spatial Development Act.

Second, it is not unchallengeable. The notary procedure is one-sided and does not resolve a dispute. If someone claims the property is theirs, the dispute is decided by a court (ГПК, Art. 537(2)). The deed still gives you a big advantage in that dispute.

Frequently asked questions

Can I get a deed for a property that is already mine?

Yes, if you have no document for your right. Then the easier route by documents (ГПК, Art. 587(1)) often applies, rather than the full fact-finding check. But if you have a recorded notary deed and have only lost it, you do not need a new deed: ask for a certified copy from the Recordings Office.

Who chooses the witnesses?

They are named by the mayor of the municipality, district or mayoralty, but on your instructions, and where possible they must be neighbours of the property. In practice you propose the names in the application-declaration, and the municipality checks their details and certifies them. Then the notary questions them.

I possess the property together with my spouse. Whose does it become?

Under Art. 21 of the Family Code (СК) property rights acquired during the marriage as a result of joint contribution belong jointly to both spouses, regardless of in whose name they were acquired, and joint contribution is presumed. Acquisition by prescription is not among the exceptions in Art. 22(1) СК that make an inheritance and a gift personal property. So if the prescription period expired during the marriage and you are under the statutory regime of community of property, the property as a rule becomes joint, even if one name is written in the deed. If possession began before the marriage, if you are under a separation-of-property regime or have a marriage contract, the answer may be different and it is worth asking a lawyer.

Can I count my father’s years?

Yes, but be careful how. If you are an heir, according to the reasoning of Interpretative Decision No. 1/2012 your father’s possession continues through the heirs by operation of law, that is, through all the heirs together. So his years count, but for the shares of your brothers and sisters the trap above applies. If you received the property by purchase or gift, you can join the possession of the person you received it from (ЗС, Art. 82).

What if the notary refuses?

The notary rules by a reasoned decision in case of refusal too. A refusal can be appealed by a private appeal (частна жалба) to the regional court (окръжен съд) (ГПК, Art. 577(1)), and the deadline for a private appeal is one week from notification (ГПК, Art. 275(1)). The notary fee paid is not refunded. The other route is a court action by which ownership is established against a specific defendant. Before all that, check whether the problem is not a missing document that can be obtained.

If you want to read the provisions themselves, they are in the Property Act and in the Code of Civil Procedure. A deeper survey of property law is in our legal analysis of the Property Act.