When the Other Side Will Not Sign — Enforcing a Preliminary Sale Agreement

In Bulgarian property deals, the notarial deed is usually preceded by a preliminary contract: price, deposit, deadline for the final deed, and what happens if someone pulls out. Most of the time the parties simply meet at the notary on the agreed day. Sometimes one of them does not — the seller has found a better offer, the buyer has cold feet, a family member objects.

The law gives the other side a powerful remedy. Under Art. 19(3) of the Obligations and Contracts Act, either party can ask the court to declare the preliminary contract final. The judgment then takes the place of the notarial deed.

The conditions

• The preliminary contract is valid and contains enough agreed terms to make a valid final contract — at minimum, the property and the price.
• For a sale of real estate, the seller is shown to be the owner; the court checks this itself under Art. 363 of the Civil Procedure Code.
• The contract has not been terminated by either party.
• Any condition the parties attached to the final contract has been met.

The last point matters in off-plan purchases. If the contract says the final deed will be signed once the building has its permit for use (“Act 16”), and that permit has not yet been issued, the claim is not lost — but it is premature, and the court will not grant it until the condition is fulfilled.

What if the buyer has not paid the full price?

For years, courts disagreed on whether a buyer who still owes part of the price can win. The Supreme Court of Cassation settled the question in Interpretative Decision No. 4/2020, delivered on 9 May 2023.

In short: full payment is not an absolute precondition, even where the preliminary contract says the price must be paid before the final deed. The court can declare the contract final, but on a condition — the buyer must pay the outstanding amount within two weeks of the judgment becoming final (Art. 362(1) CPC). If the buyer does not pay in time, the judgment can be annulled under Art. 362(2) CPC and ownership does not pass.

The court also addressed buyers who are themselves in default. A buyer’s culpable delay does not automatically defeat the claim. The seller’s answer to a defaulting buyer is to terminate the contract — and that requires actually notifying the buyer, before or during the case. As long as the seller has not done so, both sides are treated as still having an interest in completing the deal, and the court resolves any dispute about how much is still owed.

Practical points

• Act within five years. The claim is subject to a five-year limitation period, counted from the date by which the final contract should have been signed.
• Register the claim. Recording the statement of claim in the Property Register protects the buyer if the seller tries to sell the same property to someone else while the case is pending.
• Keep the paper trail. Proof of payments, invitations to the notary and the other side’s replies all become evidence.
• Draft for this scenario from the start. Clear terms on price, deadlines, conditions and the deposit make a later claim far simpler. We review preliminary contracts before signature for exactly this reason.

Questions clients ask

This guide is general information about Bulgarian law as it stood on the date of publication. It is not legal advice for your specific case.