Property deposits in Bulgaria: what to clarify before paying

Agree the terms before transferring money

A buyer likes the property and a seller wants evidence of serious interest. A payment may be a sensible next step, but its purpose must be clear first. A receipt, a reservation agreement and a preliminary sale agreement are not necessarily equivalent.

Check who signs, who receives the money, who owns the property and whether the recipient is authorised to act for the owner. Paying an intermediary does not by itself establish that the owner has accepted every promised obligation. Keep the signed document and evidence of payment.

Advance payment and earnest money are different

An advance payment is usually part of the price paid early. Earnest money under Article 93 of the Bulgarian Obligations and Contracts Act also secures performance. Where the statutory conditions are met, non-performance may permit retention of the earnest money or a claim for twice its amount. These consequences do not automatically apply to every payment described as a deposit.

The assessment depends on the agreement, the parties’ obligations and why completion failed. Do not rely solely on the heading or an oral assurance that the payment is always refundable.

Four questions to put in writing

Which property and total price are agreed? How is the payment credited towards the price? What is the deadline for the next agreement? In which specific circumstances is the money returned or retained?

If the buyer needs a mortgage, expressly address refusal of finance, a lower valuation and delays. Do not assume that a bank’s refusal by itself releases the buyer from an existing contractual obligation.

A practical example

Illustrative example: a buyer pays a reservation sum, but the document says nothing about a title problem discovered during legal checks. A more reassuring document heading will not solve this. The scope of the checks, the deadline and the consequences of an identified problem need to be agreed.

Before signing, prepare the draft, available title documents and a short account of what has been agreed. If payment has already been made and a dispute arises, also preserve correspondence. Legal advice should consider the whole file, not only the bank transfer.