Question: I am buying several properties in Bulgaria and would like some clarification about the stage payments I should be making. The developer is saying that I have to pay the final installment before completion, including 8,000 euros for the furniture package, and only then will I get a surveyor’s report which I have also paid for. This does not seem fair as I am paying in full before I know if the flat and furniture are OK. Is this normal?
Answer: This can be a tricky situation but which can happen not only in Bulgaria but in fact many other countries also. Most purchase contracts state that the last payment is made at the time of signing the title deed and the handing over of the keys. This will allow you to view the property and do a snagging list before you pay over the last payment. It also gives you some leverage over the developer (You would then be able to say to them things like - "The property is not up to standard and therefore you are not going to get the rest of the purchase price until you put it right"). However, some contracts state that the last payment is made on a certain date - which means that if the property is finished then contractually you may have to pay for the full purchase price before the property is finished. Obviously once the last payment is made there is very little incentive for the developer to complete the property or sort out any problems before the property is delivered to you. If there are any barriers (legal or otherwise) to the property being delivered (for example if the Habitation Certificate cannot be issued or the communal areas are not finished) then again you have very little room fro manoeuvre as you have already paid all the purchase price. In addition to this, some contracts do say that once you have paid the final instalment you have accepted the condition of the property and loose your right to have any snagging issues resolved - which would be impossible due to the fact that the property is actually not finished! Having said all that, it is sometimes possible to negotiate with the developer at this stage and to withhold the final purchase instalment until the property is finished - although you need to make sure that your lawyer gets the correct paperwork from the developer or else you might find that later on it is claimed that you are in breach of contract fro not having paid on time. In summary this can happen from time to time and it is important that you and your lawyer have thought of such an eventuality at the beginning of the case. The best solution is to have a good contract right from the beginning.
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