LM Legal Services Blog

All repossessed apartments which are sold by the judicial executors are already publicly announced in the regional courts. This practice came into effect with the launch of new Civil Procedures Code on 1 March 2008. Before that all judicial executors used to hide these sales as usually these properties have been sold for very cheap and well informed buyers used to acquire them.

The lists in Sofia are published in the family department of the Sofia Regional Court, which is situated in the building of the former head quarters of the Building Corps on Tsar Boris III Blvd. Because of the court holidays in August, the building was closed, but now it has re-opened doors. Already there are companies which purchase apartments at these sales at a much lower price and then re-sell them.

The banks wait for a few months for clients who are late with their mortgage instalments. After that they sale the repossessed property, and if the sale price exceeds the amount of the debt, according to the law, the former owner receives the difference. According to the Chairman of the Private Judicial Executors’ Chamber, “the problem is the sale price of a repossessed property, because it has to be 50% of the tax evaluation as per the new Civil Procedures Code and it is rather low.” That is why the judicial executors are forced to give higher evaluations of the prices of repossessed properties.

The biggest Bulgarian legal practices have made a claim at the Commission for the Protection of the Competition against 8 foreign legal firms operating in Bulgaria. The Bulgarian legal firms are unhappy that their foreign competitors are registered only as companies but not according to the Law for the Lawyers and thus avoid many requirements. This puts the Bulgarian lawyers in a position of disadvantage. Batkov, Stoev, Botev and partners, Boyanov and Co, Georgiev, Todorov and Co, Penkov, Markov and partners insist that the commission imposes sanctions for disloyal competition on DLA Piper, CMS Cameron McKenna, CMS Reich-Rohrwig Hainz, Wolf Theiss и CHSH Cerha Hempel Spiegelfeld Hlawati. According to the foreign legal firms, this is just an attempt by their Bulgarian competition to limit their activities in the country. According to the Bulgarian lawyers this is not true, and the law is new and it complies with the EU directives. Four of the foreign legal practices with offices in Bulgaria do not carry out legal work at all which is a precedent. The commission must come with a ruling in 14 days.

According to the draft of the monitoring report of the European Commission on Bulgaria (the official report will be published on 23 July 2008) the country’s progress is slow and more limited than expected. The fight against corruption is unsuccessful and Bulgaria does not demonstrate capacity for governing the European funds. The Penal Code is outdated and it is the reason for the overload of the judicial system, there are no results from the ongoing investigations, the administrative capacity of the judicial system is unsatisfactory and there are proofs of endemic corruption in the health and the education systems. Despite these, it is expected that the European Commission will not impose a safety clause on Bulgaria. However, it is expected that the commission will stop financing exceeding 1 billion Euros from the SAPARD and PHARE programs because of abuse of funds and corruption