Monthly Highlights

  Right to land acquisition in Bulgaria by aliens – a prerequisite for our country’s EU membership

The rules valid for the European Union, should be valid for Bulgaria too
          Interview with Velislav Velichkov

Legal treatment of the option for acquisition of title over immovable property by foreigners in the european union members states

CHAPTER 4 FREE MOVEMENT OF CAPITAL




The rules valid for the European Union, should be valid for Bulgaria too
Interview with Velislav Velichkov,
Expert to the National Assembly Ad-Hoc Committee on Amendments to the Constitution, Chairman of Association “Public Project for European Constitution”
BNR, “Horizont”


How will you comment the forthcoming amendments to the Constitution in respect of the option aliens to acquire title over land in Bulgaria?
This is one of the six mandatory amendments that have to be made to our Constitution in relation to Bulgaria’s integration in the European Union and the ratification of the Treaty of Accession. This is one of the most important texts that will be changed, because the regime under Art. 22 of the Bulgarian Constitution is prohibitory, i.e. no foreign physical person or foreign legal entity shall acquire ownership over land in the Republic of Bulgaria, except through legal inheritance. Ownership thus acquired shall be duly transferred.
The draft wording, now proposed by the expert group and on which there is consensus in the Committee, is that they will be able to acquire ownership over land in conformity with international treaties ratified by the National Assembly, as well as under terms and procedures set forth by statute. I.e. the Legislator, the National Assembly will be able after that to set forth what restrictive conditions and what legal procedure should be provided for acquisition of ownership over land by aliens and foreign legal entities.

Does that mean that after that the specific conditions under which foreigners may own land here in Bulgaria will be set in a separate law?
The amendments to the Constitution are mandatory in view of the prohibitory regime existing now. At the moment Art. 22 explicitly prohibits the acquisition of ownership over land by foreigners. After the amendment takes place, there will be permission they to acquire ownership over land, but the Legislator may provide for certain restrictions. European practice shows that these are usually restrictions related to national security, preservation of historical sites, monuments of culture, nature reserves, restrictions in some border regions. All this will remain at the discretion of the Legislator. Ultimately, the conditions and restrictions that will be introduced at statutory level after a comprehensive debate shall be the responsibility of the Bulgarian state.

Have you heard that foreigners are buying land even now, getting around the law?
Of course, this is an open secret. The Bulgarian citizens are already aware that Art. 22 of the Constitution is very easy to circumvent by registration of commercial companies in Bulgaria. When this text was adopted in 1991 some fears were exploited related chiefly to the countries neighbors of Bulgaria – lest someone will come to buy out our land, lest foreign influence might penetrate in the country. Those were fears that were current of the day immediately after the fall of the totalitarian regime in the first years of democracy. I think that such fears in the 21st century are not serious. We are becoming part of a united European family with common order, common rules, common market, common currency and a future common organic law. After the adoption of the European Constitution this year and after Bulgaria becomes member of the Union we will be part of the constitutional and legal order of EU, which will have a common Government, common Parliament, common foreign policy. In this family the rules valid for Germany and France will be valid for Bulgaria too. Germans will be able to buy land in Bulgaria, as well as Bulgarians will be able to buy land in Germany. By the way, Germans are even now buying land here in Bulgaria – a legal entity is registered in Bulgaria that falls within the Bulgarian legal regime and through it ownership over land is acquired. I.e. this text has been circumvented for 13 years now, but it creates objective difficulties for foreign investors, creates distrust and instability, because fears arouse that when land is acquired through a Bulgarian legal entity the property might be alienated in case of changes in the regime.

Will this future change apply to EU citizens only or to all aliens?
This is being considered by the Committee at the moment. It is also related to the main question whether to provide in the Constitution that powers are transferred and competences awarded to EU institutions and bodies, or to use the general text, which speaks of an international organization. My personal opinion is that it would be better to explicitly specify EU, as Bulgaria is going to become for the first time in its history member of such supranational formation. The EU itself will be a new, unknown to law and politics yet supra state formation, with almost federative structure and there will be shared areas of competence, common exercise of powers, EU acts will be mandatory on the territory of the Republic of Bulgaria too. That is why it would be better to explicitly state the transfer of powers to EU.
From there we go to the issue of land in particular – one option is to allow only EU citizens and legal entities to acquire ownership over land, but thus we are going to exclude very important potential foreign investors, such as for example USA, Japan, Russia. It would be much better to say “under the conditions of reciprocity, by a ratified by the National Assembly international treaty”. I.e. the Bulgarian National Assembly to be able to provide with which state and under what conditions such a treaty can be concluded, whereby the citizens of that state would be allowed to acquire ownership over land in Bulgaria and we there respectively. It would be better to leave the door open at a constitutional level, rather than closed, which will later hinder the inflow of foreign investment. Thus both the responsibility and the opportunities for flexible approach remain with the Bulgarian state institutions.




©SG 2003