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Condominium

Concept
Under Bulgarian legal doctrine, a condominium covers the exclusive ownership of the premises in a separate building and co-ownership of the common areas in the same building. This type of property is regulated by several legislative acts - the Property Act (Art. 37-49), the Condominium Management Act and the Regulations for the application of the same Act.

Occurrence
The law does not recognise any specific methods for the emergence of condominium. It is assumed that the condominium arises whenever two persons have exclusive ownership of the premises in the same building and have shares of the common parts thereof. Several methods deserve mentioning with regard to this interpretation. If the building is subject to joint ownership, condominium may occur in the event of voluntary or court partition. Another possibility of its occurrence is by transferring part of a property by its exclusive owner to another person through a legal transaction.

Termination
A condominium may be terminated in several ways. Since the object of a condominium is a building, the loss of the building leads to termination of the condominium. If the rules governing the construction so permit, a condominium may be terminated if the building is rebuilt in such a way  that a single unit remains (e.g. by removing walls). In the event that all individual units are transferred to one person, it will again lead to the termination of the condominium.

Common parts
Common parts can be the land, foundations, exterior walls, roof, interior bearing walls, stairs, etc. (Art. 38 of the Property Act). These parts are the subject of condominium, but not subject to neither legal nor voluntary partition. Where a person acquires an individual unit, it also acquires shares of the common parts proportional to the ratio between the value of the individual premises which they own, calculated at the time of establishing the condominium ownership (Art. 40 (2) PA). Thus if the value of the building is EUR 1 million and the unit costs EUR 50,000, then the ideal part of the general parts of this storey amounts to 5% for the respective floor owner. When an owner of a floor or part thereof transfers a separate part of its property to another person, the shares of the transferee and the transferor in the common parts of the building shall be determined by the ratio between the transferred and preserved part at the time of the transfer (Art. 40 (2)). The building, whose regime is subject to the rules of the condominium may be subject to superconstruction or additional constrction, but only with the written consent and notarized signatures of the condominium owners. In this case the new owner acquires, for consideration, the respective shares of the common parts (Art. 40 (2) PA). All floor owners must participate in the expenditures necessary for the maintenance and restoration of the common parts in accordance with their share.

Condominium management
This is a particularly important issue which is dealt with in both the Property Act (Art. 42-44, Art. 47 ) and the Management Condominium Act. In terms of governance the MCA distinguishes two types of condominiums - ordinary condominium and condominium in residential complexes with restricted access.

  1. Management of condominiums in buildings in residential complexes with restricted access is governed by a contract with notarized signatures concluded between the investor and the floor owner. It identifies the conditions and means of building maintenance and the cost of remuneration for staff. The contract is entered in the book of the Land Registry and opposable to all subsequent transferees.
  2. The CMA governs two varieties of condominium - condominium with up to three separate premises and one with more than three premises.
    1. Condominium of up to three separate premises - this condominium is governed by Art. 42-44 of the Property Act. Management is carried out by the general meeting of the condominium owners and the thereby elected manager. A quorum of 51% is requied in order to hold the general meeting. Decisions are taken by simple majority.
    2. Condominiums with more than three separate premises may be governed by the General Assembly of the floor owners or the owners association.

The first governance unit consists of three bodies - the general meeting and the thereby appointed manager/management board and supervisor/supervisory board.

The General Assembly is convened by the manager at least once a year or at the request of the condominium owners who hold more than 20% of the common parts. The general meeting can take place if the floor owners who own more than 67% of the common parts are present. Decisions are taken:

  • Unanimous vote - for superstruction and additional construction of the building, as well as establishment of the right to build;
  • By majority vote of condominium owners who hold more than 75% of the common parts - for removal of the floor owner under Art. 45 PA;
  • By majority vote of condominium owners who hold more than 67% of the common parts - for overhaul;
  • By simple majority - on all other issues - appointment of a manager / supervisor, acceptance of the annual report, etc.

The Manager/Management Council is the executive body. It is appointed for a term of two years. The Management Board consists of at least three people who elect a chairman among themselves. This body represents the condominium before the state bodies and other individuals and legal entities and supervise the adherence to the rules of procedure.

The Supervisory Board consists of an odd number of members, but minumum three, who elect one of them as chairman. The chairman is also elected for a term of two years. The Supervisory board/supervisor controls the activity of the manager and at least once a year performs a check on the financials.

The association as a form of Condominium Management is selected voluntarily by all floor owners. A constituent assembly must be convened, where all floor owners take the decision to set up a legal entity with "Condominium management" as its main activity. Condominium owners take a unanimous decision on the establishment of the association as well as on the content of the agreement and with a simple majority - the appointment of the management board and supervisory board. The agreement should specify the name and the rights and obligations of condominium owners. Within 14 days the President of the Constituent Assembly files for registration of the association in the public register. The association also has three bodies - general meeting of condominium owners, manager/management board, supervisor/supervisory board.

The General Assembly of condominium owners consists of all floor owners. In order to hold a general meeting, the presence of condominium owners who hold more than 67% of the common parts is required. Decisions shall be taken as follows:

  • Unanimous vote - for superstruction and additional construction of the building, as well as establishment of the right to build;
  • By majority vote of condominium owners who hold more than 75% of the common parts - for removal of the floor owner because of the systematic violation of the internal order;
  • By majority vote of condominium owners who hold more than 67% of the common parts - for overhaul and termination of the condominium;
  • By simple majority - for all other issues.

The Manager/Management Board are appointed for a term of two years. It represents the association before the state authorities and other individuals and legal entities, implements the decisions of the General Assembly, etc.

The supervisory board/supervisor is also appointed for a term of two years. It consists of at least three members. Their duties are to control the work of the Manager as well as the finances.  

The association may be terminated by a decision of the General Assembly, with the loss of the building or the expiry of the period for which it was established.