D. Vladimirov & Partners – Legal Services for Financial Institutions

We have a long-standing reputation for dispute resolution and have over recent years built up strong corporate and regulatory practices which means we can provide our clients with a full legal service across our sectors of focus.

Banks and other financial institutions are an essential part in the corporate world. Our banking and finance practice has developed to encompass all manner of Bulgarian & international banks, and other financial institutions.

In the last couple of years our experience ranges from infrastructure and project finance, ship and aviation finance and leasing, to domestic finance, trade finance and private equity, as well as regulatory issues, complex accounting issues, investment fraud, and banking and finance related litigation. Clients value the in-depth industry sector experience we offer, and the significant value this can add when they have banking and finance transactions/claims.

Our legal company has got experts in the regulations determined in incorporating, registration and license of credit and non-banking financial institutions, respectively their branches in Bulgaria. Our services include:

• Drafting of consumer and corporate contractual lending documentation,
• Drafting of GTCs, internal procedures, statutory rules, regulations of credit and other financial bodies.
• Structured, Commodity and Trade Finance
• Commercial Litigation
• Corporate Finance
• Investment Fraud prevention
• Infrastructure and Project Finance
• Regulatory
• Domestic Finance
• Restructuring and Insolvency
• Shipping Finance
• Overall legal services to banks and financial institutions with regard to their general banking issues.
• Legal support in agreements and all the additional documentation related to bank accounts, deposits, bank guarantees, letters of credits, loans and others.

Here is what we can do in corporate lending:

• Preparation and negotiation of financial contracts on behalf of lenders and borrowers.
• Drafting security documentation.
• Structuring of all types of equity and debt financing, including project finance, real estate finance, acquisition finance and others.
• Preparation of financing contracts on behalf of both lenders and borrowers. Negotiations and drafting security documentation related.
• Due diligence and thorough assessment on credit facility documentation. Check up on the collaterals and the additional guarantees,
• Advices on transaction settlement instruments (escrow accounts, trust account agreements and others).
• Bank receivables restructuring.

Project financing

Legal Services for Financial Institutions

We are providing legal analysis of different aspects of investment projects, also European financing and programs. Our company is doing negotiations over banking and non-banking financing of many different projects. Our assistance also includes:

• defining the tranches of financing and the repayment schedules;
• drawing-up documents necessary about to the project financing;
• negotiating with all parties involved in the project financing – investors, financing parties, construction companies, project operators, subcontractors, suppliers, consumers of the product, export insurers, state authorities, etc.;
• analysis and assignment of the respective permissions, licenses or concessions connected to energetics, road infrastructure, mining, telecommunications, sport facilities and others.

Legal assistance in collateral, operating and financial leasing

• Legal advices and overall analysis according to the legislation in force and effect on:

1. possible securing of receivables;
2. preparation of agreements and other related documents;
3. entry into the relevant registers for the purpose of securing receivables through pledging, registered pledges on movables etc.;
4. mortgages on real estates.

• Taking the actions necessary and providing legal assistance upon necessary exercising by a creditor of economic rights of a debtor.
• Preparation of the documents and contracts needed on operating and financial leasing according to the law.

Parking regulations, Condominiums rights Bulgaria

The parking space is located on the free part of the Building, which is built with building or buildings. 

If the building or buildings are built on the basis of a building right, the free areas can be used by the owner of the site, respectively, to be given for use by third parties, including as separate parking spaces. In such a situation are the owners of sites in residential complexes.

So far, there is no extensive practice in Bulgaria for the renting of parking lots as public parking spaces, especially as citizens have a widespread understanding that the construction of the car parks and the infrastructure to them has been financed by the owners of the respective dwellings.

But purely such a practice is possible; as it is possible to rent out as parking lots parts of streets, squares, subways and other municipal property.

In any case, the Art. 64 of the Ownership Act,  according to which the owner of an object in the building is entitled to use the land as much as necessary.

But it must be emphasized immediately that the parking of one or more family cars is definitely not a necessity of using land under Art. 64 ЗС.

The legal situation with the regulation of parking places in BULGARIA

If we are faced with a building in superfood mode and the owner has transferred a dealership with a notary deed to a third party „parking“ on the empty space before concluding that there is a negligible deal, the will of the parties should be carefully examined.

It is possible in the form of a „parking space“ the owner of the UPI to have set up the person the right to build a future garage; and precisely in order for this foundation not to transfer to the other owners an ideal part of the land. However, building with garages is not always possible from an urban point of view.

It is possible in the form of a „parking space“ the owner of the UPI to have established the right of use on a real part of the terrain (with a view to using it for parking). Although the right of use under Bulgarian law is inconvenient for its non-transferability, its acquirer is not devoid of interest in acquiring it. There is no legal obstacle to establishing a right to use on a real part of the UPI.

A parking space can also be acquired through a rental agreement, as in the case of a commercial transaction, the principle 10-year limit under Art. 229, para. 1 of the CPA. However, the possibilities for such an interpretation are severely narrowed to cases where the „transfer“ of the parking space is indicated by a time limit, and such cases do not actually occur.

Last but not least, we should consider that there is a complete and initial nullity of the order.  If the owners of the building or buildings also own the corresponding ideal part of the ownership of the land, the problem of using part of the yard as a parking space should be solved on the floor of the condominium, because the yard will be a common part.

The possibilities for establishing parking rights in a yard – a common part of condominium property, are not large. The only cases where the area of ​​the yard will be sufficient to provide parking space for all owners will be singular. On the other hand, a decision of the general meeting of the condominium can not deprive the owner of his right to use the yard for parking. There is only the possibility – with the unanimous agreement of the owners – to provide for an alternation of usage by days of the week, by months or by years. It is possible (again with unanimity) to agree that a part of the owners who use the parking spaces will pay the others who will not use a rental sum.

In order to avoid a situation where they do not have a parking space reserved for themselves, many clients of „green“ dwellings want the latter to be explicitly entered in the deed of their dwelling. Building contractors also do not mind such a practice because the sale of parking places guarantees them considerable profits without much cost.

De lege lata and in view of Art. 38 BC, we can not deny that the yard is predestined for the GENERAL PART of the condominium. Consequently, transactions with the parking lots on the common part will be null and void if the transfer of the parking space takes place in parallel with the transfer of the dwellings, as is the mass practice. 

But is it possible to transfer the parking spaces as a right of use, right to build or rent on real parts of the terrain before the developer has begun to transfer the objects to the building and thus establish a condominium? I think it is quite possible.

The law does not require terrain, which will become a common part, not be burdened with limited property rights or lease contracts. With the argument of Art. Pursuant to Article 237 of the IPA, the rented lease agreement would be binding on the acquirers of the condominium.

Therefore, de lege lata there are ways of „acquiring“ the parking spaces in the yard before the condominium is built up.

These methods, however, do not coincide with the practice of acquisition by entering in the same title deed which acquires the main object. The very „acquisition“ as the end result will be quite different from what is expected from the buyer, paying the parking space. Except when establishing the right to build, it will not become the owner of the parking space, but only a user of a right of use or a long-term lease.

The parking space is located in underground or overground covered parking. 

This type of parking space is considered to be 3, that there is no separate object and the deal with them is negligible. Indeed, in this case there is no way to acquire ownership of a real part of the parking lot.

However, I do not think that the case of the nullity is always applicable here. Negligence is an institute, the application of which we must resort to moderation and abstinence, especially in the commercial turnover.

With careful analysis of the outcome of the parties, we will see that the parking lot is a separate object in the non-residential building. This object is not an integral part of its nature or purpose, because it is designed to serve not all but part of the floor owners (the others may not be car owners, have garages on the ground, etc.).

The parties are not aiming to become sole owners of the parking lot, but to use it in general, each „knowing“ which part is. In my opinion, from this it follows that the will of the parties is the garage to be PRIVATE.

By purchasing the parking spaces an ideal part of the parking lot is purchased, and in parallel, the real estate is distributed in real way. Upon a subsequent sale of an object in the building we will have to consider it to be transferred as a „parking space“ and the ideal part of the parking lot.

To assume that the transfer of the parking space is a negligible transaction would mean allowing the developer and other landlords to invoke this nullification and shake up against the person who has in good faith bought his parking space. This, in turn, will lead to completely redundant disputes.

Still, the adopted construction remains controversial and uncertain in the case law. It is preferable for the parties to exercise extreme caution when acquiring parking rights and to require the transferor to further clarify in the notarial acts what the subject of the transaction is.

Particularly in the case of the acquisition of parking spaces in general (underground) parking lots, it is necessary to examine whether the parking spaces are not envisaged according to the projects for a common part of the condominiums. If they are not, the notary deed must explicitly state that an ideal part of it is acquired. It is even better if, prior to the transfer of the parking space, the developer has prepared and submitted to the future owners a future use agreement accompanied by a parking plan.

For the time being, it is not possible to expect an explicit legal regulation of the parking spaces. It would be nice if it was created. We believe that once a phenomenon has it in practice, it is preferable for the law to regulate it explicitly instead of making it not noticeable.

Bulgarian courts will freeze bank accounts of debtors and abroad

Lenders will be able to require the freezing of assets of debtors and abroad,This was made possible by amendments to the Civil Code. The amendments to Bulgaria accepted procedure called. European order for attachment of bank accounts. It’s about an EU legal instrument whose purpose is to facilitate cross-border debt recovery in civil and commercial matters.

Cross-border debt recovery in BULGARIA

The regulation, which establishes the procedure began to apply from January 18, 2017.Cross-border work is in two hypotheses.European Account Preservation Order (EAPO-regulation)

1. The first is where the creditor lives in the country – an EU member and the court imposing garnishment, bank account and subject to freezing, located in another Member State.
2. The second court in one country and bank account – in another. 

The authority entitled to issue a European arrest is the first instance court if the request for a lien to be done before examining the merits of the case. There is however an opportunity for the applicant to request an order at any stage of the case by the court sees it. If this happens in those proceedings, the order is issued by the appellate court.

Obtaining EAPO is available as an option in all phases of the litigation process – where the creditor would be interested to secure prospective proceedings, as well during a pending lawsuit, and also in cases where court decision (or similar) has already been obtained and the judgment creditor needs to secure its enforcement.

If the court refuses to issue an order, the creditor may appeal an interlocutory appeal. If the failure is ordained of appellate jurisdiction, the appeal before the Supreme Court.

Cross-border work is in two hypotheses. The first is where the creditor lives in the country – an EU member and the court imposing garnishment, bank account and subject to freezing, located in another Member State.

And in the second court in one country and bank account – in another. The authority entitled to issue a European arrest is the first instance court if the request for a lien to be done before examining the merits of the case.

There is an opportunity for the applicant to request an order at any stage of the case by the court sees it. If this happens in those proceedings, the order is issued by the appellate court. If the court refuses to issue an order, the creditor may appeal an interlocutory appeal. If the failure is ordained of appellate jurisdiction, the appeal before the Supreme Court.

We would like to pay attention to the fact this Regulation won’t apply in the United Kingdom and Denmark so freezing bank accounts of debtors held in these two countries won’t be possible under the above procedure.

The debtor will be able to seek annulment of the order in the same order.The European accounts Preservation Order will be a good option for the local creditors, whose debtors reside on the territory of the European Union. Contact us for more information.