Important for apartment owners in complexes: changes to the ZUES are coming

The Bulgarian property market offers all kinds of options – from a small house in a remote village to a luxury villa with its own golf course, from a modest room to a spacious apartment in the capital. The most popular option among foreign buyers, however, remains an apartment in a resort complex.

How things stand now

In addition to their own comfortable apartment, owners get well-kept, guarded grounds, a swimming pool, children’s and sports areas, restaurants and shops intended specifically for the residents of the complex. Of course, all these pleasures have to be paid for – every year apartment owners pay the so-called “maintenance fee”. Keeping everything in order and spending these funds is the job of the Management Company.

All of this is governed by the Condominium Management Act (ZUES). At the moment it does not work particularly well, especially in complexes where the apartments belong to foreigners. The reason is that, under the law, property owners must regularly attend general meetings at which the fate of the common areas is decided, the budget is set and the management company is appointed. Gathering property owners who come to Bulgaria for a couple of weeks’ holiday at best, and who are the last people who want to spend that time in meetings, is usually extremely difficult. The result is conflict. Management companies do not receive money for their work and do not fulfil their obligations, while owners voice dissatisfaction with the service. Even well-known people, figures from show business, run into such problems. A well-known Russian singer, for example, recently wrote about problems with a management company.

What happens next?

Amendments to this law are expected in 2019. As always, they are preceded by discussions – in this case, rather heated ones. Understandably, foreign owners very rarely take part in such discussions: some have no wish at all to get to grips with Bulgarian laws, others do not know the language.

It is not yet known exactly which amendments will be adopted, but the proposals are available to study here

Let us look at some of them.

• Property owners propose clearly defining the duties and responsibilities of management companies.
• In the view of the management companies’ representatives, it should be possible to fine apartment owners who do not pay the maintenance fee without a special decision of the general meeting (GM).
• General meetings are a sore point for many. Various ways of solving the problem are proposed. It is suggested that owners who do not take part in general meetings be fined. There are views in favour of limiting the powers of the GM, since those making such proposals believe that owners are not sufficiently competent or well informed and cannot take wise decisions. Besides, it is obvious that in many cases it is simply impossible to gather all apartment owners for a meeting.
• Some proposals concern precisely those complexes with foreign apartment owners. Problems arise because owners are unwilling to get to grips with Bulgarian laws. It is proposed to fine negligent non-payers and even to restrict their departure from the country if the maintenance fee has not been paid.
• Some proposals concern the size of the maintenance fee. It is proposed to regulate its amount by law, along with the formulas by which payments are calculated, and to create special funds to pay for urgent repairs
• Renting out property has not been forgotten either. Some want the maintenance fee for landlords to be raised, others propose banning renting out without the approval of the general meeting.
• It is proposed to introduce the concept of a “seasonal-purpose complex” and to provide special rules specifically for such complexes, where people live not year-round but only during the season.

Which of these proposals will be heard by the authorities is hard to say for now. One thing is clear: in its current form the ZUES suits very few people, so the law will be changed.

The question inevitably arises of whether owners of apartments in such complexes can be called the real owners of their property. The future will show whether it is possible to live in such housing year-round or to rent it out without additional problems. One thing is clear: the management companies’ terms will have to be met, and if their requirements are additionally backed by legislation, this may hit the finances of many foreigners who do not follow the process of legislative change.

See also:

Taxation of short-term apartment rentals in Bulgaria

Renting out apartments on a daily basis: legal requirements

Property by the sea. Bulgarian-style scam schemes, or how not to be taken for a ride