Amendments in the Rules for Entry – Protection against Property Fraud or Bureaucracy?

On 25th July 2014 the Council of Ministers of the Republic of Bulgaria accepted amendments in the Rules for Entry, published in the State Gazette, issue 63 from 1st August 2014.

According to the new Para. 3 of Art. 51 of the Rules, the Registry Agency will no longer provide uncertified copies of entered acts - in other words, the Agency will only provide certified copies. This way, copies can be required only by the parties or their legal successors, or authorized representatives.

According to the legislators this amendment will decrease and hinder the possibility of fraud and misuse of immovable property. But is this goal actually being achieved?

Acts that are entered into the Agency are those with which ownership rights are transferred, donations, exchanges, contracts for acquisition of property against life care obligations, and acts, with which real rights are arranged, transferred, changed or terminated (right to use, ownership over a building, etc.). Real estate division agreements, lease agreements with a deadline for more than one year, as well as preliminary contracts for purchase of real estate (when the parties request it) are also entered into the Agency. In other words, all acts with which any legal and disposal actions with real estate are carried out are entered.

The working regime before the amendments envisaged that everyone could get an uncertified copy of entered acts after submitting an application form in which all of the applicant’s personal data are filled in. This way, in case of misuse of the received by the Agency documents, it was easy to check who did it, when it was done and exactly what documents were requested. The new provisions of the Rules read that the Agency issues only certified copies to the parties, their legal successors or authorized representatives (either representative by law or by private authorization). This means that only the owner of the property can receive copies of the deeds which testify for the legal history of the property.

The future purchaser of the property is excluded from the circle of persons who have the right to receive certified copies of the entered into the Agency acts because they are not a "party" in the legal sense. They, however, cannot receive uncertified copies either since the Agency no longer issues such. It is precisely the future purchaser of a property, their lawyers and/or brokers that are the ones who are the most interested in receiving information, to check the property and judge whether the ownership is clear back in time and whether the property is clear of encumbrances. The only possibility given to a future purchaser is to seek cooperation from the seller or to purchase the property.

It is worth mentioning the gathered fees. According to the Agency’s Tariff, one page of an uncertified copy costs the applicant 10 cents, and one page from a certified copy (i. e. with a stamp from the Agency) costs BGN 2. Since uncertified copies are no longer issued, after the amendments applicants will have to pay 20 times more for each issued document.

Even if we disregard the above-mentioned considerations regarding the newly accepted amendments, there is another significant problem with the text accepted by the Council of Ministers. The amendment of Art. 51 of the Rules contradicts Para. 1 of Art. 93 of the Law on the Cadastre and Property Register, which reads that every person has the right to receive a copy of an entered document on the real estate’s batch.

It turns out that the provisions of the Rules disable the provision of the law itself which is unacceptable. In the hierarchy of normative acts the law, which is introduced by the National Assembly, is of higher status than the Rules for Entry, which is introduced by the Council of Ministers in connection with the proper application of the law. In the legislation, rules and other regulation acts are issued in view of the proper application of the law, not the other way around.

As a lawyer, I cannot help but support the statement that legislative amendments should be initiated when the development of public and commercial relations determines and imposes changes and, of course, when the latter are coherent with the legal order. In this particular case, the amendments envisaged in the Rules for Entry not only fail to achieve the set goals adequately, but also bring about conflicts in their application.