Development of maintenance relations in residential and holiday complexes in Bulgaria during the last decade

When I started my practicing 10 years ago as a conveyance solicitor, it was the peak of off-plan property purchases in Bulgaria. Property investors from different countries – the UK, Ireland, Russia, Greece, Spain, Italy, Norway, etc., were attracted by the projects for new developments, advertised by foreign and local real estate agencies, very often supported with offers for rental income. As a result, many residential and holiday complexes have been constructed through the years and put in operation - amounting totally to several hundred thousand newly built apartments, most of them - sold to foreign buyers.

These days are gone already and the real estate boom here is over. The developments that were completed and sold could not generate any more fresh cash for the developers who constructed them. So obviously in the last couple of years they had to find another way for generating continuous income since they could not start new building projects due to the crisis that occurred.

The first option for making more money out of it was via renting out the newly built apartments on behalf of the individual buyers/owners, against giving them percentage of the generated rental income. In most cases this has been the main idea prior selling the concrete project off-plan. As I detailed above, many foreign buyers were attracted by promises for 7-8-9% annual rental income if they agree to purchase an apartment. But this option faced many difficulties, like the overload rental market with too many apartments for rent in the same area (because too many complexes were built in the same time) which fact, together with the necessary expenses that had to be invested for furnishing the apartment and for managing the rental initiative, could not allow achieving of such huge income – neither for the apartment owner nor the developer. Also the Bulgarian resorts depend strongly of the season so good occupation is usually possible for 2-3 months roughly through the year.

The alternative option, that was easier and preferable by many local developers, was to provide maintenance services in the complex and respectively to charge the apartment owners with maintenance fee. In the past I’ve experienced many cases where off-plan buyers in holiday complexes were asked to sign a maintenance contract together with the preliminary (private purchase) contract. Here the outcome was also not very positive, because most of the companies-developers bankrupted through the years and could not deliver maintenance. In some situations where possible, the maintenance activities then were engaged to officially or non-officially related daughter companies (which usually receive as an asset also any apartments that could not be sold yet). One shortcoming of the direct relations between apartment owner and maintenance companies I’ve experienced in my practice was that although the maintenance in its legal nature relates only to the external and internal common parts of particular building (like stairs, elevator, lighting of common parts, outside walls, roof, etc.), a standard trick used by developers was to relate the maintenance fee with other objects – outdoor pools, gardens, parking lots or common security of whole complex area, etc. This has been done usually to defend the asked amount of the maintenance fee, although the mentioned above subjects usually were owned solely by the developers.

Then in 2009 the Condominium Act has been accepted by the local Parliament, to improve regulation of the maintenance relations among the apartment owners, and to create legal status of entities formed by them in relation to dealing with the maintenance and repairs in the building. The Bulgarian Condominium Law enables establishing of Condominium (also known as “General meetings of apartment owners”) and forming an entity which to deal with maintenance of the common parts of the building, instead of signing direct maintenance contracts with Maintenance Company.

This legal option has been often used since 2009 and in most cases it substituted the previously signed maintenance contracts between buyers and developers. Although this is a step forward in the development of the Condominium regulations, a problem that occurs particularly in residential or holiday complex is that where the developers still have unsold apartments in their names, they usually attempt to control the formed Condominium, and respectively its decisions – including voting for Manager and these establishing the amount of and the way of payment of the maintenance fees. This applies particularly in situations where most apartments within the complex are sold to foreign buyers. In a concrete case I just had recently, I saw unfair goals pursued - to manage collecting the maintenance fees by the apartment owners, and the (non)payment of maintenance fee for their own apartments. I’ve seen e-mails sent by the developers to the individual apartment owners, with the following content: “Be informed that the General Meeting has taken a decision about the maintenance fee, so you got to pay it”.

According to the local court practice through the last years there have been many examples of defective or invalid decisions of the Condominium usually related to the amount and collecting of maintenance fee, and very often including attempts for forcible collecting of the fee through the local courts. This is why very often apartment owners use to dispute such decisions in court. There are numerous cases already where such decisions have been proclaimed void by the court due to shortcomings or defects in the decisions or in the procedure for organizing and performance of General Meeting. I’ve seen examples where General Meetings have been organized in very short deadlines and on holidays (like on Boxing day!) namely to avoid any possibility for the foreign apartment owners to travel and attend the meetings.

Considering that recently I’ve read also decisions voted on General Meeting for forcible collecting of maintenance fee against apartment owners who do not pay (although they usually do not reside more than 30 days per year in the apartment and should be released from payment of maintenance fee), I can conclude that the Condominium Law should create more effective options for control of these decisions, to avoid situations where writ of execution could be obtained against an apartment owner who resides abroad and obviously has not been informed at all about the performed General Meeting and the taken decisions that may harm his/her interests and rights.

The Burqa Ban – where personal rights contradict with the public rights

Shortly ago in the cities of Nice and Cannes and on the island of Corsica in France, a prohibition has been announced for face and whole body covering on the beach (known as “burqa ban” or “burkini ban” because it affects the Muslim veil). The prohibition does not allow wearing the so-called “hijab” on the public beach. Published reasons by the authorities are safety ones, security ones (due to difficulties for clear identification of the person), aims for avoiding disorder and also hygienic reasons. The prohibition affects mostly the Muslim tourists who would like to rest on the beach, bearing their religious rules about face and body covering. Therefore there have been many disputes about the conflicts which such ban could create and does it harm the freedom of exercising the person’s religion belief.

For myself, I am religious person – most of the people in my country are within the Orthodox Christian family. As a lawyer I have always supported the freedom of personal religious beliefs, bearing that it ways goes with “attachments” – i.e. these small or serious religious rules and orders, that should be followed to express belonging to the particular religion. I believe that every person has the right to exercise their own religion and to obey its rules for behavior. This is a supreme personal right in my view, and it is also constitutionally guaranteed in many countries. I would never allow myself to separate people due to their religion – although I admit I may not understand in details other religions, but for sure people from other religion are not supposed to understand mine as well, neither to understand our religious rituals here.

But one specific thing that we learn about in the Law faculty, is the public right and public order. Public rights express the need of the society to receive legally guaranteed rights that anyone could join and benefit of. In other words – equal rights for all the members of the society. These are superior rights and in every developed country there is a legal principle “Area of covering of personal rights ends there, where protection area of rights of other rise”. This involves protection of the public rights, i.e. the rights of the society, against the personal rights. The reason for creation and protection of public rights is simple – we all live in the one and the same society and we all must share same rights and same rules, not allowing particular people to affect the public rights of the society when expressing their personal rights.

Therefore the burqa ban prohibition on the public beach in France cities should be supported, as long as the legal reasons for issuing it serve the public needs. The public interest should be in superior position compared to the personal right of following religious rules. People need to put understanding in the fact that public orders should be obeyed even by others who do not share the same beliefs. There is a simple example: I have been in the Emirates on vacation, and I learned there that there are particular behavior rules in public (originating from the Islam religion) that should be followed (like travelling separate men from women in the city metro, like the ban that prohibits eating in public during the Ramadan period in August, like the rule for keeping the whole body covered and taking your shoes off when walking in the White Monk in Abu Dhabi, etc.). As far as I understood, there were serious penalty for not obeying the public rules and prohibitions. I personally love Dubai and I followed the public rules there without arguing, or asking for more personal rights – just because in my understanding, these are the rules in this particular society, so if I want to be part of it even for a couple of days, I have to follow their rules. At the end of the day nobody forces me to stay there if I don’t like the public rules for behavior. But as I said, I have followed these and my whole visit was terrific, it’s a perfect spot for a tourist like me and I would love to visit the Emirates again one day on vacation.

So let’s convert things now – as visitors and residents obey the rules in public in one country (for example a Muslim country in my case), then why the burqa bank in France should be a subject of protests and arguing? France has its own public rules for behavior on public places (like the beach); so if these provide prohibition of face and/or whole body covering, then let it be. I guess we all should follow it without protest, just like we do not protest to ride in different wagon, separated from our women, in the Dubai metro. As I said above, at the end of the day nobody forces people to visit the public beach and to reside in France in total, if they are not happy with the local public rules and orders for behavior on public areas. Just like there is no prohibition for these women who take-off their hijabs on the plane leaving Arabia towards Western Europe. People are still free to reside in their home countries, where the rest of the society shares their own beliefs and behavior.

In conclusion, religious beliefs and rules for personal behavior following the religious traditions, should not contradict with, neither affect public rules. Everyone is free to exercise their own religious beliefs, but should obey the rights of others and the public rights. As well when visiting or residing in another country, the cultural and public specifics of the local society should be respected. Especially where at the same time, we expect the same from foreigners in our own country too.

Google will sanction websites with aggressive advertisement

According to official message on their blog, Google will start sanctioning websites which use aggressive ad tactics and deliver too much pop-up add content on mobile devices, effective 2017. This relates mostly to smartphones and tablets that deliver mobile online content towards users of internet services. One of the main reasons declared is that pop-up ads use the whole screen of the device and have to be closed manually by the user to enable using the small screen of the device.

This is good news and I have been waiting for these measurements by Google for a long time. As a person who uses a lot a couple smartphones and tablets I surf online almost all of the time (both during work and in my spare time). Since many websites have recently improved their mobile versions, upon reaching a particular website I’ve been asked on many occasions to download applications, to check advertisements or ad applications, etc. With the interstitial format, before I even open content of the website, or at some time during read, I note a huge add that popped up on the whole screen, and have to remove (close) it first, to be able to open the website and reach the needed content, or to continue reading. There are even websites which constantly ask to download their mobile version, every time I try to open them.

I find couple huge differences between pop-up adds due to their technical specifics on one hand, and the mainstream advertisements on TV and radio, on the other. Let’s split it two ways: Following your personal interest, you have the right of choice to skip the (upcoming) adds you don’t want to see on TV - via simple click on the remote control button; but you don’t have the right of choice and have to look through the add that popped-up on your cell phone, until you find and press the closing button on the add. In the view of public interests, with the mainstream media, there are very serious regulations to establish when exactly advertisement may be screened, so you can expect when they may deliver adds to the public - (for example, between the different TV-shows). On the opposite, can’t predict when a pop-up add will list on your mobile device and will prevent you working with it until you actually close the ad. In other words - you just cannot avoid seeing an ad which you don’t want to see, on your mobile (of course there are versions of “pop-up blocker” software, but not everyone uses it). This may result in watching in all cases the particular advertisement so the advertiser achieves their goal while there is no benefit for you. Also I believe there is a negative influence of watching too many ads, as many of these use manipulative tactics that affect person’s choices and habits in one way or another. At the end of the day, the main goal of the science “Marketing” is to make consumers to spend money and buy things, right?

Therefore I support the upcoming changes planned by Google as I believe it develops the right of choice of users to decide what to watch and what – not while surfing online on their mobile devices. Obeying and protecting their privacy is a supreme goal in my view and all efforts on this matter should be encouraged. As well it is one step close to creating better regulations about online advertising in common.

Protected green urban areas

The Municipal council here in Sofia is the authority to accept major regulation city plan, which regulates the different planning areas within the Sofia Municipality, for the purposes of its management. These are - areas for residential construction, areas for public management (for public needs), areas for green areas, etc. The major (common) regulation plans are compulsory for the public and private land owners and have to be obeyed by them. For example, there are serious building restrictions and prohibitions for urban territories which have got “green space” protection. According to our Laws, when private property has been included unilaterally by the Authorities in the new main regulation plan as green area (to serve the public needs for urban green space), then it should be expropriated (taken) by the municipality, against payment of compensation towards the landowner.

The problem arises with the extraordinary term, stipulated in art.17 of the specific Act for management and building in Sofia Municipality, for expropriation of the green plots (and respectively pay compensation for it to its landowners) – namely 15 (fifteen) years as of the said Act of legislation has entered in force (in 2007). This means that for a period of 15 years, any property owner, whose plot receives “green area status” will not be allowed to exercise in full their ownership rights, i.e. they cannot use without limits their land, because the new “green” legal status has been given to it without possibility for appeal. On the other hand, they do not have any legal instrument to force the Municipality to expropriate the land against paying compensation, because the Law is clear – 15 years deadline for paying compensation. So these particular private landowners are not legally able to claim any damages until this term expires. Not to mention the fact that a land plot with given “urban green space” status is not attractive for any investor due to construction restrictions. There is a city part in Sofia for example, which includes many plots of land totally amounting to tens of thousands square meters, recently listed as “green open space” with a new common plan entered in force 2009. Obviously Sofia Municipality does not have enough money to compensate so many private owners for expropriation of their plots with given “green space” status. Therefore such huge 15-years deadline for expropriation and compensation, in my view has been established to give the Authorities unfair supreme position against the citizens, and it conflicts with the interests of the involved real estate owners.

This is a serious shortcoming of the mentioned local legislation, because on one hand it harms the legal and financial interests of private landowners whose plot’s legal status has been changed to “green urban area”, and on the other hand it details a method implemented in the local legislation, of dominancy of the local official Authorities over the citizens. So if they ask me what do I presume will happen after expiration of the 15-years deadline for expropriation (and paying compensation) of private plots listed as green areas, then I would bet that a new 15-years deadline will be proclaimed by the local lawmakers. I personally support development of green city areas, but its establishment should not be done via tying the hands of the local citizens who own plots with changed unilaterally by the Municipality legal status to “urban green spaces”.

The annual council taxes due to the local municipality

According to the Bulgarian tax legislation, every real estate, situated within the regulated borders of cities, villages and towns, is imposed with annual council property tax. This is obligation created by the Law so it cannot be avoided. Simply said, in theory the local municipality does not care whether you know or do not know how and where to pay your council taxes, because it is a sole obligation of every owner to declare the recently acquired property and then to take annually the necessary steps to find out what is the account of the municipality or to visit a cash desk and pay the taxes. The council tax is a yearly imposed one ,so this means that real estate owners have an obligation for each separate year to pay the tax for the same year. But in many cases the foreigners who wish to buy Bulgarian real estate, fail to inform themselves about the existence of annual council property taxes, and respectively either do not pay these, or, in some situations when related to apartments in holiday complexes, they have the wrong idea that these taxes are covered by the maintenance fee they are paying towards management companies. The common practice is, if property owner hasn't paid their council taxes for more than 4 years, the municipality to take the necessary steps to collect its money compulsory through a public bailiff. On the base of my 10-year practice I can conclude that this applies especially when the property is owned by corporate entity and there are several years of tax debts. The municipality has the right to ask the public bailiff to take some of the properties which the debtor owns on to a public auction for satisfaction of the debt. Taking care of the annual council property taxes, especially, if so much time has passed since the real estate purchase already, is a must, because the local municipalities may act not later than the expiration of the fourth year of the delay.

And I guess here is the place to point an important issue: Every foreign buyer who has purchased a real estate property in Bulgaria since 2005 must do two compulsory registrations : to register with a BULSTAT number within a week after the first purchase ( this is specific registration for supplying you with a tax identification number so you can pay your taxes correctly) and then declaring the property with the BULSTAT number he/she has received at the tax office in the local municipality in two-months deadline after the purchase. There is a fine for failing to complete these registrations,so in case you own a property in Bulgaria but you are not aware with the above registrations and council taxes, then it is important to establish first whether you have a BULSTAT registration number or not (if more than one buyer bought the properties together then all of them must have BULSTAT registration) and whether the properties have been properly declared in the municipality. As you can see one thing is related to the other and usually these registration should be done one by one from the beginning. In my practice I have registered in these authorities on behalf of foreign property buyers many delayed purchases (basically hired by people who want to re-sell, but not legally and technically able because of lack of declaring their purchased properties), so I can make the conclusion that this hasn’t been done previously due to lack of information in the usual case.

The useless procedure of appealing rejections for pre-case burden warrants

Art.390 of the Bulgarian Civil Code entitles claimants, before actually lodging a litigation claim, to apply before the local District court (which is the 1st instance court) for obtaining seizure warrant to secure their future claim (i.e. an order for placing a burden) on chosen assets that are owned by the debtor for the term of the prospective lawsuit. This is “one-party procedure” where the debtor does not participate. The role of this procedure is, first of all, to ensure that the defendant won’t release all his assets after been served with the court claim in order to save them, and secondly, to ensure that in case of positive decision, the claimant/creditor could reach effective satisfaction of their debt.

Once the said application has been submitted in court, usually the judge decides on it on the next day, as the Law pursues speed in such procedures. The goal here is to reach allowance a.s.a.p., so the claimant can get the issued warrant and via the local bailiff to place the burden on the chosen debtor’s assets to secure their prospective claim. In other words, the quick seizure of assets is pursued here. But sometimes, the application could be rejected directly by the court – usually if the judge considers that the debt is not yet due; or if there are no strong evidences to support the application, or court tax has not been paid, or there is lack of authorization towards the person who has signed the application, etc. This denial is direct - with no possibility of giving instructions towards the applicant to repair/improve their claim. In case of refusal for issuing preliminary seizure warrant, One of the available options for the claimant is to appeal it at the higher, 2nd instance court. But in this case the Civil Code obliges the court to involve also figure of the debtor in the appeal procedure, where it becomes “two-sided court process” and the debtor can dispute the application itself. Which given right to the debtor, in a procedure which initially starts and ends without their participation, is non-beneficial for the claimant/creditor, because once the debtor has been informed officially by the court that someone wants their assets frozen for prospective lawsuit against them, then the debtor can easily hide or transfer to third parties their own assets to prevent the actual success of such prospective legal actions. This danger puts the claimant in harmful situation and questions the effectiveness of the whole litigation process.

Alternatively, in this one-sided procedure, in case of rejection by court to allow pre-case burdening of assets, the claimant may choose not to appeal it at all, but to follow the motives of the judge and to repair or remove any shortcomings or defects in their denied application in order to submit it again. But in this case, the claimant should wait first to be notified by the court for the refusal (which technically may take several days for serving if you don’t check on desk at court the file). And then to wait for expiration of further 7-days - the deadline for appeal - before the issued rejection enters in force, so then the claimant could prepare and lodge their application again, hoping that the same or another judge within the same court may approve their application this time. Unfortunately there is no option for the claimant, once found out that there is a denial by court to allow pre-case burden of assets, to lodge new (improved) application a.s.a.p., although they chase quick protection of their rights against the debtor. Even if they lodge it during this deadline, the court will reject their new application with the sole motive, that there is still pending application, the decision on it has not yet entered in force. This procedural prohibition for the claimant is non-logical, because in such procedures speed is vital; waiting 10 more days to lodge new application for seizure is not beneficial in any way for the claimant who seeks immediate protection of their rights.

Therefore a change should be made in the Bulgarian Civil Code, to avoid involving the defendant in appeals against refusals for issuing pre-case seizure warrants, and also to entitle claimants who have been served with court rejections, to submit new applications straight away and without having to wait a week or more before they will be entitled to do it again.

Illegal usage of intellecrual property downloaded from Facebook and other social media.

Many people use to keep personal profiles in online social networking websites like Facebook or Twitter, where members publish statuses, share statements and upload photos or videos. Some people prefer to manage the security of their profiles in order to keep their privacy on higher level; others, who are famous in the society (artists, sport players, politicians, etc.), usually share personally made photos or videos with the public (i.e. with their fans around Globe). For example, according to the Statement of Rights and Responsibilities on the Facebook website, the particular member of this social networking website declares and gives to Facebook non-exclusively, transferable, sub-licensable, royalty-free, worldwide license over the published Intellectual Property content (uploaded personal photos and videos, mostly).

I think Facebook is a wonderful method to connect you with other people; I like it and admire its creator. In my view there is nothing wrong to share photos and/or videos with the public, and people obviously don’t have problem with that, since they manage on their own the privacy on their own Facebook profiles and it is up to them to decide what to share with others and what not. I would like just to mention some particular situations where Intellectual property rights (author’s rights for example) of Facebook users may be harmed by third parties. According to the Bulgarian Intellectual property Law and the stipulated rules within the Author’s Right Act, such damage may occur in situations where third parties – usually TV media, newspaper publishers, other websites, etc. – download personal photos or videos from the profile of particular Facebook user, and then use this Intellectual property content for business reasons in their own products (newspapers, television reports, news articles on other websites, etc.) for their own profit and benefit. This happens without the knowledge and/or the consent by the owner of the said intellectual property content (personally photographed photos) and without paying remuneration to their author. Usually the placed argument by these third parties who use for trade purposes (i.e. not for personal use) such materials is that, since it has been already shared by the concrete Facebook user, then it should be considered as “public content” and would not represent a protected Intellectual material.

Well, in my personal view, such understanding is incorrect according to our legal system and our civil courts, and I would not buy such argument, because once published by users on Facebook (where the said non-exclusive license is granted to this social network), any personal photos and videos do not become automatically a property of any third parties for their free usage on other (business) platforms. Any third parties obviously do not have binding agreement with the social networking website, neither with the individual user who shared personal photos or videos, for using it for their business purposes. The license, initially given by the user to Facebook, has not then been passed to these third parties at all. Therefore they are not allowed to use this Intellectual property content, claiming that it already has become “public” once shared in Facebook. In other words, newspapers for example, are not legally allowed to make their own profit via posting personal photos that are downloaded from a Facebook’s profile, where they have not awarded the person who holds the author’s rights on this content.

This is why, according to the Bulgarian Intellectual Property Law, the third party - user of personal content shared in social networks like Facebook for their own needs, benefit and profit, is liable and responsible towards the author of this personal content, protected by the Law, for pecuniary damages caused by its usage for trading purposes outside Facebook without permission and without remuneration. Punitive (monetary) damages are subject of proof in court. Non-pecuniary damages are claimable too, according to our Laws; and these depend of the particular case.