Bulgaria Nightmare!

TrickyDicky

sammyh82 wrote: »

we have to pay a sum of money to the government in tax though when he turns 18 i think, this is to prevent money laundering, apparently people discovered a loophole, sign the house over to the kids & avoid taxes, think its 10% of the value of the house or something.

And with this grasp of finance you bought an investment property abroad! And failed.

maninthestreet

sammyh82 wrote: »

we have to pay a sum of money to the government in tax though when he turns 18 i think, this is to prevent money laundering, apparently people discovered a loophole, sign the house over to the kids & avoid taxes, think its 10% of the value of the house or something.

What tax or taxes are you referring to? I own a house, the only tax I pay on it is council tax. Where and how does potential money laundering come into this?

Spartacus_Mills

sammyh82 wrote: »

my mother is the trustee as she paid my mortgage off & put the house is his name, when he turns 18 the house belongs to him, this is to prevent any man entering my life and trying to take half my house.....UNDERSTAND?

I appreciate you are stressed but do not get stroppy with people who are trying to help you.

FWIW I think you should cut and run as well. The investment is a dog and you run the risk of further losses.

maninthestreet

OP - sell the apartment for a giveaway price - if fact, giving it away for nothing may even be advisable. You can't afford the mortgage, you can't get a re-mortgage, the apartment is incomplete, and you face paying thousands of pounds extra to the builder to get it completed. Even when it is completed, it won't be worth what you paid for it, and there is no guarantee you will be able to find tenants that will pay the rent required to cover the mortgage payments.

DesG

sammyh82 wrote: »

my mother is the trustee as she paid my mortgage off & put the house is his name, when he turns 18 the house belongs to him, this is to prevent any man entering my life and trying to take half my house.....UNDERSTAND?

The house can't be in his name, but I understand now, sorry for bringing it up, just sounded strange.

Back to the problem in hand. Are you heading to Australia for good? If so bankruptcy may be a good option as you have no real assets. Although if the house was in your name until recently and then transferred into a trust that might rule out the bankruptcy option as they would see it as hiding assets.

There is always the head in the sand approach to avoiding the debt.

You can make good the outstanding payments and keep paying into the mortgage, and pay more to get the apartment finished, but personally I would kiss goodbye to your deposit and try and get rid of the problem one way or the other. I guarantee you it won't be worth what you paid for it, sorry to be blunt.

It is going to have to be your decision really, none of us can tell you what to do for your circumstances, just give you some options after getting a bit more detail.

Cheers, Des.

sammyh82

I fully appreciate the constructive comments & advice that people have given, just don't think telling me I've made a huge error buying in Bulgaria helps anyone at this stage so I wasn't being stroppy just stating the obvious!
I'm going to try to sell at roughly the price of the outstanding mortgage (60% of the valuation 3 years ago) & give up on getting my deposit back & I just want to say thanks to the comment from Tricky Dicky......... really sound advice there........oh wait it was just another pointless negative comment!!!
Well at least I have some ambition & positivity in life, & don't just go around preaching to other people about what they've done wrong, I brought an apartment in an up & coming area & had my ex not left me, I wouldn't be a single parent struggling to pay the mortgage & asking people with 'financial expertise' for advice, so no I don't regret buying in Bulgaria at all & I would happily continue fighting with the rest of the owners group if I could afford to.
Can anyone offer me any constructive advice on selling in Bulgaria? estate agents? websites to advertise on??

sammyh82

TrickyDicky wrote: »

And with this grasp of finance you bought an investment property abroad! And failed.

................................Kn*b!

SouthCoast

I have been confused by this thread.:(

Rodin

Where is the apartment?
Not to be negative but if it's not finished how will you sell it?
Also if you keep the apartment you, and the others in the complex, will be responsible for :
local taxes
poss company returns
maintenance costs

There are some companies buying on behalf of Russians on the Black Sea but they will offer you approx 50% of what you paid.

read this for more info:

He's a 55-year-old construction entrepreneur from London and one of the victims of property fraud, an issue that thousands of Britons have encountered in Bulgaria.

We'll call him Steven because he does not want his identity revealed. Right now he is in Britain and the last thing he wants is to meet journalists. We talked to his lawyer in Sofia, who also asked not to be named because the court action is still pending. But the story we are about to tell is very much real.

Auspicious start
The year is 2005. Under the influence of ubiquitous advertising in British newspapers, Steven decides to buy an apartment on the Bulgarian Black Sea coast through Bulgarian Dreams – one of the largest and most popular property intermediaries during the boom era.

He picks the Windows to Paradise development near Kavarna because of the golf courses under construction nearby. Steven's dream is to buy a second home in Bulgaria, which at the time is already certain to join the European Union. He picks a 123 sq m apartment on the fifth floor of one of the buildings in the future development. The price is 108 000 euro and Steven pays half of it.

After the promising start comes the shock.

No fifth floor
A year after paying for his apartment, Steven received an e-mail from a Bulgarian Dreams representative informing him that construction would be delayed, although it did not say for how long. More shocking, however, was the revelation that the building would only have four floors.

Turns out that Kavarna town hall did not approve the fifth floor in the building where Steven paid for the apartment. In the name of Bulgarian Dreams, he is offered to choose another apartment for the same price in a future building, without specifying which building.

Steven refused and asked for his money back, along with interest and damages.

What followed was five months of tortured correspondence between Steven and Bulgarian Dreams, in the course of which he was once again offered to buy a smaller apartment in Bansko or Pamporovo. In the end, he was promised that he would get his money back, but was referred to Bulgarian Dreams' Bulgarian partner – Interlink BG.

After more talks with the lawyers of the Bulgarian company, he was refused a refund because not all shareholders of Interlink BG gave their approval.

In court
Steven was lucky to find a good Bulgarian lawyer who began actively pursuing Interlink BG. First, he secured an impounding of the company's bank accounts, but finding no money there, he persuaded the court to impound two plots owned by the company. In the end, the court ruled in Steven's favour, ordering the company to pay back the money plus interest.

We are telling you Steven's story because it is a typical case involving British nationals. There are hundreds of such court actions in Bulgarian courts and a big part of them are deals brokered by Bulgarian Dreams.

"Most of them signed blindly, without even reading their contracts. Many contracts have no date or builder signature. To a large extent, the blame belongs to the Britons themselves, who were overly trusting in their dealings. Many of them did not consult a lawyer, thinking it an unnecessary expense," said Milen Hristov, a lawyer who represents several British buyers burned by Bulgarian Dreams.

So far, he has secured one out-of-court settlement to recover 20 000 euro for a client who bought an apartment in the Windows to Paradise development near Kavarna.

After boom, bust
Bulgarian Dreams is the most often cited name whenever one talks of Britons having problems with their Bulgarian properties. It started as a family business, founded by Briton Robert Jenkin and his spouse Maria Georgieva. Business grew as the generous advertising campaign and promises of quick returns won new clients.

Hundreds of properties in several large developments on the Black Sea coast and in Bansko were sold with the company acting as an intermediary.

The first signs of the impending fiasco came in March 2008, when the company was expelled by the London-based Association of International Property Professionals because of customer complaints. The crash came at the end of 2008, when the company surprisingly announced that it ceased trading, closed its Moorgate office and told customers on its website that "following the extraordinarily difficult economic conditions", customers should contact the Bulgarian building companies directly.

In March 2009, it was reported that the economic crime department of the City of London Police was investigating the company. The Sunday Times said at the time that Bulgarian Dreams held a prominent spot in the list of fraud investigations.

Representatives of Bulgarian Dreams and the Bulgarian companies linked to the firm could not be found for comment before Capital went to print.

Brilliant scheme
At least four developments in which Bulgarian Dreams sold apartments have been identified. These are Windows to Paradise in Kavarna, Cedar Heights in Pamporovo, Cedar Lodge and Orchard Lodge in Bansko.

Actually, Bulgarian Dreams is only a trademark operated by British company Berkley Square Trading Limited. The company worked with Bulgarian construction firms that were also investors in the property developments and sold the apartments.

"The real firm, registered in Britain, is Berkley Square Trading Limited, while Bulgarian Dreams is only a trademark – this is what Bulgarian courts cannot understand," Hristov said. "In Britain, the legislation allows you to register a company name, but trade under a different name, so they can identify themselves as Bulgarian Dreams and use that name in all the paperwork. The only trail that links them to the real firm is that their stationery features the name of the company and its identification number in the trade register."

British buyers paid for their apartments to Berkley Square Trading Limited accounts. It is assumed that the intermediary then wired the funds to Bulgarian builders.

The court actions against Bulgarian Dreams are further compounded by the fact that all payments were made through the intermediary, which is difficult to prove.

"The money transfer happened through the British intermediary, so none of the payments were made directly to the builder. This is the practice in Britain, when one advertises something, they have to sign an intermediation contract and the intermediary then has to transfer the money to the builder. This is why so many people agreed to pay that way. In Bulgaria, no one would do it, because people prefer to pay the builder directly," Hristov said.

Another story
Rachel Gawith is one of the numerous victims of Bulgarian Dreams. Her experience with the Bulgarian property market began in the summer of 2004, when she decided to buy an apartment in Bansko from Bulgarian Dreams, an intermediary well-known in London, paying 1100 euro a sq m. She later acknowledged that she signed a contract full of mistakes.

When she visited the development in October 2004, she found that, contrary to promises, it was much further from the ski lift and the view of Bansko was actually a view of the balcony on the neighbouring building.

Worried, Gawith contacted other owners in the same building, only to find out that they had the same unanswered concerns. Bulgarian Dreams told the Britons that their concerns would be addressed by the builder.

Having realised her mistake, Gawith decided to sell her Bansko apartment. After long negotiations with the building company, she managed to get back two thirds of her deposit, but Bulgarian Dreams refused to refund the 6000 euro commission paid to them. With the help of a British NGO, Trading Standards Institute, Gawith was later refunded the commission.

Her story does not end there. "Despite this initial setback I still loved Bulgaria and wanted to invest in property there but had decided that buying cheaper old rural property was a much better bet," she wrote on her blog, thetravelbug.org.

She would later travel throughout the country to get to know the different regions and meet real estate agents. She said she met both the kind that were "out just to rip you off" as well as some "really helpful and friendly". She bought several properties and had problems with them as well, detailing her experience in an e-book titled My Bulgarian Property Nightmare.

"Whilst Bulgaria is a lovely country in many ways and has much to offer, I do not know a single person that has moved here or bought here and not faced problems with agencies, builders and general difficulties of living in a different country and culture," she wrote on her blog. "Please just be careful, ask as many questions as you can, however silly they may seem and do not rush into anything, however a fantastic deal it may look."

sammyh82

The property is Cedar Heights in Pamporovo
Who are these companies offering 50%?