Bad Press in the UK

Hello again!

There was some bad press about Bulgarian real estate from one of the UK tabloids this past week. You may have heard about it - maybe not. In any case, it was complaining about the assumed horrid fate of some British investors in Bulgaria who (apparently) bought a house without the ownership of the land it stands on. A few questions ...

- Who is stupid or ignorant enough to buy a house without the land it stands on?

- What were the arrangements about land?

- What realtor would do this to somebody?

Well, I guess the answer to the first question is relatively clear - at least a "few dozen" Brits according to the tabloid report. (LOL) But think, how many Brits own houses in the UK without owning the land they stand on? Quite a few in the major cities, I think. They live in houses on land with a long-term lease (typically 100 years or more). Furthermore, at least according to a Bulgarian real estate lawyer, the house owners are fully protected under Bulgarian law - they have full control of the land for as long as the house stands unless the contract states otherwise.

As a matter of fact, probably a large majority of apartment owners find themselves in the same boat! Some own an indivisible portion of the land and the public areas of the building their apartment lies in, but that certainly does not give them "control" of the land, only a vote with their voting rights based on the percentage their apartment is of the total ownership. Hmm. Probably the building the newspaper is printed in is not owned by the newspaper. What about that, "Daily Express"?

I expect that this was a reaction to the Bulgarian legal situation where only Bulgarian citizens are allowed to own land. The realtor(s) involved in the cases above found a novel (and maybe less expensive) way around the problem - the house-owner does not own the land, ergo no problem! It also retains the appreciation of the land value for the land owner, who presumably can sell the land or retain it, but cannot control it. Depending on the agreement and local zoning regulations, he might also be able to build a second house on the land and sell that as well! The "standard" solution for non-Bulgarian citizens who want to own a house is to form a small Bulgarian company, and use this company to buy the land and maybe the house as well. On the technical side, I suppose their company then could sell the house to its owners if the people really wanted the house (maybe for a less expensive mortgage or for tax reasons?)

As for the third question, the answer has to be "almost any realtor in Bulgaria or the UK!" Standing practices are accepted pretty much everywhere. Certainly, my company would do this, assuming certain protection was provided for the buyer.

References: see the news clippings at http://good2004.biz/news.htm.

Ciao for now...

Craig