Purchasing an apartment “greenfield” – that is, during the construction phase or even before building has started – is becoming an increasingly popular choice among property buyers in Bulgaria.
In commercial practice, a “greenfield apartment” refers to a property that is not yet completed, offered for sale based on an architectural project, with the purpose of financing construction through payments made by buyers.
This approach allows for a lower initial price and the opportunity to select a home in a preferred residential complex.
However, it is important to proceed with careful due diligence – by verifying the developer’s reliability, obtaining professional legal advice, and having a clear financial plan.
Buying a greenfield apartment can be a smart, long-term decision for those seeking better value and flexibility.
Handled correctly, a greenfield deal can become the best step toward your new home or investment.
What Does “Buying a Greenfield Property” Mean in Bulgaria?
The term “greenfield apartment” does not have an official legal definition in Bulgarian law.
It is a widely used commercial and construction term describing a property purchase made before the completion of the building – usually at the design, excavation, or structural stage (Act 14).
In practice, buying “greenfield” means:
- Investing in a property that is still under construction, by signing a Preliminary Sale and Purchase Agreement and making stage payments tied to construction progress.
How Is a Greenfield Property Purchase Legally Structured?
Instead of a notarial deed, the buyer and the developer sign a Preliminary Sale and Purchase Agreement, regulated under Article 19 of the Bulgarian Law on Obligations and Contracts (ЗЗД).
This agreement includes all essential terms of the future transaction — price, property description, payment schedule, and construction deadlines.
What Does the Preliminary Sale Agreement Specify?
- The price of the property;
- A detailed description of the future apartment (area, floor, orientation, etc.);
- A payment schedule based on construction stages;
- Deadlines for the completion of key stages (issuance of Act 14, Act 15, and Act 16);
- The rights and obligations of both parties;
- A commitment to sign the final sale contract (the notarial deed) after Act 16 or upon full payment;
- Often, a guarantee clause ensuring timely transfer of ownership and penalties for delay.
The Preliminary Sale Agreement serves as a legal safeguard until the notarial deed is signed after the building is completed.
It represents a binding commitment between the buyer and the developer but does not transfer ownership rights.
Is a Final Contract Signed Before the Notarial Deed When Buying a Property “Greenfield”?
No. The notarial deed itself is the final contract.
The steps are as follows:
- The Preliminary Sale and Purchase Agreement sets out the intentions and terms agreed between the parties — price, deadlines, payment stages, and the obligations of both the investor and the buyer.
- The Final Contract is the Notarial Deed, which officially transfers ownership of the property.
Sometimes, during long construction projects, the investor and the buyer may sign an additional agreement (annex) to the Preliminary Contract.
This usually happens if there is:
- a change in construction deadlines or stages;
- an update to the price;
- adjustments in the level of completion or layout.
However, this is not a separate final contract — it is merely an update to the existing preliminary agreement.
When Does the Right of Ownership Arise?
Ownership of the apartment arises only after: the transaction is notarized before a notary, the Notarial Deed is signed, and the deed is registered in the Property Register at the Registry Agency.
Before this stage, the buyer holds only a contractual (obligatory) right, not an actual property ownership right.
Many developers prefer to formalize the notarial transfer after Act 16 and the issuance of the Permit for Use, ensuring that the building is fully completed and safe for occupancy.
At What Stage of Construction Can a Notarial Deed Be Issued, and Why Do Developers Often Refuse to Do So Earlier?
1. Legal framework
Under Bulgarian law, ownership can be transferred from the developer to the buyer after the building reaches at least Act 14 — when the structural framework is completed, and each apartment is physically and legally individualized (floor, area, boundaries).
Act 14 certifies that the building’s construction — foundation, walls, slabs, and roof — is fully completed.
At this stage, the property physically exists and can be legally identified (it has a number, floor, area, etc.).
Before Act 14, the property does not legally exist as an independent real estate unit — only the right to build (building right) can be sold, or a Preliminary Sale Agreement can be signed.
2. Why many developers refuse to issue the notarial deed before Act 16
There are several main reasons:
- Developer’s liability: The developer remains legally responsible to the municipality until the building is issued Act 16 and the Permit for Use. Without these, the building is not officially commissioned, which means there are still potential technical and administrative risks (e.g., unapproved installations, project changes, or compliance issues).
- Control over payment: Developers prefer to maintain control until the full amount is paid. Since most buyers pay in stages, the developer risks losing protection if ownership is transferred too early. Once the notarial deed is signed, the property belongs to the buyer, and the developer has limited legal recourse if payments stop.
- Bank or legal restrictions: If the construction is financed by a bank loan, the land and building are often mortgaged to the lender. In such cases, the bank must authorize each separate transfer of apartments, which can delay the process.
- Tax and administrative reasons: Transferring ownership before Act 16 can create additional tax or procedural burdens for the developer (e.g., amendments to documents if the project undergoes technical corrections).
Why the Step-by-Step Approach Is Common in Greenfield Transactions
Because of the risks for both sides, greenfield property purchases are often structured as a two-stage process:
1️⃣ Preliminary Sale and Purchase Agreement — signed after the excavation stage or once the building reaches Act 14.
2️⃣ Final Notarial Deed — signed after the completion of construction, issuance of Act 16, and the Permit for Use.
This way, the buyer is protected by a binding agreement, while the developer retains control until the project is fully completed and the final payment is received.
What Are the Advantages of Buying a Property “Greenfield”?
- The main advantage is the lower price. Apartments purchased at an early stage of construction are usually 10–35% cheaper compared to completed properties.
- Choice of the best units – buyers can select the preferred floor, orientation, layout, and even request interior modifications.
- Flexible payment options – most developers offer installment payment plans tied to the construction progress.
- Potential for capital gain – if property prices rise before project completion, the value of the apartment may significantly increase.
In Which Cases Can the Price of a Greenfield Property Change Before Completion?
1. If the price is not fixed in the Preliminary Sale Agreement.
The safest way to secure the price is to have it clearly fixed in the preliminary contract.
If the agreement includes phrases such as “price subject to adjustment,” “indexation due to changes in construction material costs,” or “price may be revised upon mutual consent,” the developer has the right to change it.
Tip: Always have the contract reviewed by a lawyer, as such clauses may be hidden under terms like “additional costs” or “inflation adjustment.”
2. In case of a sharp increase in construction costs or inflation.
In recent years, many developers include indexation clauses — for example, if construction material prices rise by more than 10% according to official statistics. In such cases, the apartment price may increase proportionally (usually by 3–10%), if stated in the contract.
3. If there are changes in the project or apartment size. Sometimes, after final measurements are completed, it turns out that:
- the actual area of the apartment is larger than initially planned, or
- modifications have been made to layouts, common areas, or basements.
In these cases, the developer may request an additional payment, as the final price is typically calculated based on the actual area upon completion (Act 16).
4. In case of delay or non-performance by the buyer.
If the buyer delays installment payments or misses deadlines, the developer may:
- impose a penalty, or
- revise the terms (including the price) when renewing the contract.
5. In force majeure situations.
In rare cases — such as natural disasters, legislative changes, or VAT adjustments — contracts may allow price corrections upon mutual agreement between the parties.
When Can the Price of a Greenfield Property Not Be Changed?
If the Preliminary Sale Agreement clearly states: “The price of the property is final and not subject to change until the notarial deed is issued.”
Then the price cannot be increased, regardless of external circumstances.
Typical Payment Schemes When Buying a Greenfield Property
1. When paying with the buyer’s own funds, the most common payment structure is:
- 20–30% upon signing the Preliminary Sale Agreement
- 30–40% upon reaching rough construction (Act 14)
- 20% upon technical completion (Act 15)
- 10% upon issuance of the Occupancy Permit (Act 16)
2. For buyers using a mortgage loan, payments are adjusted according to the bank’s conditions.
At What Stage of Construction Do Banks Grant Mortgage Loans in Bulgaria?
- Act 14 (Rough Construction Stage): This is the earliest stage at which most banks are willing to issue a mortgage loan. Act 14 certifies that the building’s structure is complete — providing physical collateral for the bank.
Some banks, however, require additional conditions such as: the project being pre-approved or financed by the same bank, the developer having a solid track record, or a tripartite agreement between buyer, developer, and bank.
- Act 15 (Technical Completion): At this stage, all banks approve mortgage loans. The building is fully constructed but not yet in operation. The risk for the bank is significantly lower. Typically, the buyer pays 20–30% with personal funds, and the rest is financed by the bank.
- Act 16 (Occupancy Permit): Once Act 16 and the permit for use are issued, the property is officially completed and ready for occupancy. Mortgage loans at this stage come with the best conditions — lower interest rates and higher financing ratios (up to 85–90% of property value).
- Exceptions – Partnered Projects: Some developers cooperate with specific banks (e.g., BACB, UniCredit Bulbank, Postbank, DSK). In these cases, the bank may issue loans from earlier stages (even before Act 14), as it already monitors the project and developer.
Risks to Consider
- Construction delays – especially common with smaller or newer developers.
- Unreliable developer – check the company’s previous projects, track record, and financial stability.
- Existing encumbrances or mortgages – ensure that the land or building is free of unresolved debts or liens.
- Project modifications – layout or common area changes may affect the final apartment.
- Unfavorable contract clauses – without legal review, the buyer may miss important details such as deadlines, penalties, or termination terms.
How to Protect Yourself When Buying a Greenfield Property?
To ensure a safe and successful transaction with minimal risk, you should:
- Verify the developer’s reputation and financial stability – review past projects, client feedback, occupancy permits (Act 16), and financial reports.
- Check the specific project documentation – review the construction permit, land ownership deed, contracts with the construction company, and any encumbrances.
- Review the Preliminary Sale Agreement carefully – a legal expert should analyze all clauses and suggest corrections before signing. Both parties’ interests should be equally protected.
- Monitor construction progress – the buyer should receive regular and transparent updates about each construction phase.
- Verify project financing – if the project is backed by a bank, this provides an additional layer of security.
Whom to Trust for These Checks and Legal Support?
Buying "Greenfield" Property – Through a Broker or Directly from the Developer?
Purchasing a property “Greenfield” can be an excellent investment, but it also carries certain risks. One of the most common questions buyers ask is: is it better to buy through a broker or directly from the developer?
Let’s take a look at both options.
1. Buying a "Greenfield" Property Through a Real Estate Broker
Advantages:
- Protection of the buyer’s interests.
- A professional broker represents your interests — they verify the developer, the contract, the payment schedule, and the property’s actual market value.
- Legal review and consultation.
- Reputable agencies (such as VIDELI, for example) offer a legal review of the Preliminary Sale Agreement, construction documentation, property history, and encumbrance checks performed by a qualified lawyer.
- Access to more offers and comparison options.
- The broker has a clear overview of the market and can present similar properties from different developers, helping you choose the best option.
- Negotiations on your behalf.
- An experienced agent can negotiate better terms and prices, a more flexible payment plan, or even additional benefits (such as free upgrades or discounts).
- Support until the final Notary Deed.
The broker assists you throughout the entire process — from property selection and viewings to due diligence, document review, and finalizing the deal.
Disadvantages:
- A broker’s commission is paid (usually between 1.5% and 3% of the purchase price, depending on the type and value of the transaction).
- The quality of service depends on the broker’s competence, ethics, and professionalism — choosing the right broker is therefore crucial.
2. Buying a Greenfield Property Directly from the Developer
Advantages:
- No commission — you pay only the property’s price.
- Faster communication regarding deadlines, construction progress, and documentation.
Risks:
- The developer protects their own interests, not yours.
- Contracts are often drafted entirely in favor of the developer, with little or no possibility for amendments.
- There is no independent verification of documents, building permits, property history, project financing, or existing mortgages and encumbrances on the land.
- Difficult to compare with similar properties on the market.
- No legal assistance when signing the Preliminary Sale Agreement or in case of disputes.
- Harder to negotiate better terms or prices if the buyer lacks experience.
Which Option Is Better?
1. Combination Approach:
- You choose a property directly from the developer, but hire an experienced and qualified lawyer to review and amend the contract, verify the construction documents, property history, encumbrances, and the developer’s stability.
2. Work with a Professional Broker:
- Choose a broker whose commission includes all the above checks, legal reviews, and who works closely with a qualified lawyer.
Both options will provide the professional protection that every serious investment deserves.
Buy “Greenfield,” but not “Blindfolded”!
The right partner in the process can save you time, money, and unnecessary stress -
and turn your purchase into a secure and successful investment!