New provisions (in force from 01/07/2011) were incorporated in the Notaries and Notarial Business Act (NNBA).
According to the new paragraph 8 of Article 25, NNBA, when performing legal acts for the creation, transfer, amendment or termination of property rights in real estates for consideration, the parties are obliged to declare in the contract itself that the price specified in it is the agreed consideration. Pursuant to the new para. 9 of Article 25, NNBA, where the total consideration due under the contract exceeds BGN 10,000, any payment of that consideration must be effected either to a special bank account of the notary, or to a bank account chosen by the parties.
A new Article 25a, NNBA institutes such notary public-held accounts.
The terms on which payments by the parties are made to the special notary bank account and the deposits are then disbursed are set out in a written agreement between the notary and the parties to the contract.
Such accounts are protected from enforcement for obligations of the notary.
These new provisions correspond to recommendations of the European Commission to Member State governments to legislate for the prevention of money laundering through property transactions, as well as for tackling corruption and property fraud. The changes also prevent concealing the real consideration. In turn, this cures evasion of local taxes payable upon acquisition of real estates and improves the quality of market information.
Less obviously, the changes in the NNBA would help in proving the authenticity of effected payments, as well as the receipt of the agreed price by the party to the contract. This should reduce litigation, enhance the legal certainty of the property transactions and the legitimate expectations of the interested persons.
AFI Europe group - ongoing legal support
In 2012 NBLO has continued to provide a full range of legal advice to its long-term client AFI Europe NV and its seven subsidiaries in Bulgaria. Our advice has ranged over a variety of issues – from day-to-day corporate governance and company secretarial work, to complex corporate transactions and banking and financing matters. We have also carried out two due diligence projects on behalf of AFI Israel Properties Ltd. in view of the contemplated public offering of the company on the Israeli Stock Exchange.
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