Succession en Bulgarie
15-02-2023

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Can I retain some rights associated with the assets I give away? Can I reserve a right of reclaim?

Yes, it is possible in cases of forms of transfer. This is a common practice for transfers without consideration (gifts) and transfers in exchange of care services for elderly persons. It is rather exceptional in cases of transfers with consideration as the person paying money will want to receive the asset free of encumbrances or restrictions. The transferor can reserve a right to use the asset. This is one of the limited kinds of rights in rem over an asset owned by someone else. Someone else gets to own the asset by transfer deed, but the transferor has reserved the right to use the asset, either for a period of time, or for the rest of his/her life. Thus, the right of use is for a specified or unspecified length of time – until death. In both cases, the user can waive the right to use in a separate deed. This deed is a written declaration, certified by a notary, and it has to be registered so that the register indicates the owner's name and surname and that such right in rem doesn't create any encumbrances. This right in rem is particular, in that it cannot be transferred - the only person who can use it is the person for whom it has been reserved or created.

It is possible for the owner to retain a right to use the real estate asset transferred both for him/herself, but also for third parties. In that case, the third party has to be included in the transaction. For it to be enforceable, the beneficiary has to make a declaration indicating that he/she wishes to benefit from the agreement made in his/her favour. Such a transfer subject to a right to use is called a transfer of “bare ownership” because one of the rights of ownership - use -  is not included in the transaction. Once the right to use comes to an end, if the user waives it or dies, ownership is automatically completed by the initial right to use. The right to use allows the user to receive the fruits or natural yield or other benefits of the asset, e.g. in the case of a field, the user can plant and harvest it or, in the case of an urban real estate, he/she can rent it out and receive rent for it. Interestingly, the user and not the owner will have to pay the land taxes and waste disposal taxes to the municipality.

The kind of transaction according to which the transferor is under an obligation (provided certain conditions are fulfilled) to return an asset to the transferee falls within the realm of trust law. Trust law mirrors many provisions from property law which comprises possession, use and disposal of an asset. Thus, when someone is an owner, he/she can dispose of the asset at any point in time and can do so by transforming, dividing or destroying it. He/she can also dispose of the asset in legal ways. Hence, there can be no obligation to make restitution towards third parties or in the transfer deed, as this would contradict the legal principles of property law. The transferor and the transferee can secretly negotiate and agree between themselves that the asset will be returned on certain conditions. However, this is a confidential agreement and should the owner, despite such agreement, decide to dispose of the asset to a third party, the transaction is valid as there has to be legal certainty. The initial owner, whose trust has been abused, could have a claim against the buyer based on the agreement between them, but not against the third party.  

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Notary Chamber of Bulgaria

46-48 A rue Opalchenska

BG - 1303 Sofia , Bulgaria

Tel.: +359 2 980 99 32

Fax: +359 2 986 77 35

chamber notary chamber org

notary-chamber.org

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