Newestate
« BACK
Bulgarian Power of Attorney (PoA) – The significance and the risks

Bulgarian Power of Attorney (PoA) – The significance and the risks


Power of Attorney is a common document in every legal system, it is a written authorisation to represent or act on another's behalf in private affairs, business, or in this case the legality of selling a property asset.

 

Bulgarian PoAs can vary considerably from allowing another party to drive your car through to setting up and operating bank accounts on your behalf. This document is crucial in the sale of any property when the buyer or the vendor is not able to be physically present. Although relatively uncommon in the UK, PoA’s are part of day to day business and personal life in Bulgaria; institutions such as amenities suppliers right through to locksmiths require them before acting upon someone else’s property.

 

Once a property is under offer and a deposit has been collected the vendor either needs to come to Bulgaria and visit many different departments to collect a variety of documents themselves (at least 14-21 days – see full details of the process by clicking here), or alternatively they can appoint a representative, typically this is their Agent or their Solicitor via a PoA.

 

It isn’t comforting to hear, but it is legally true, any PoA signed (with a solicitor or agent) ultimately only comes down to a matter of trust, that the third party empowered will do what they say they are going to do. Of course the same applies to anything when you put good faith in another party, such lending your car or house keys, but with cash involved and by being overseas the risk is always amplified. However, there are two ways to limit your exposure to fraud, cost disputed or hidden charges:

 

1)      Don’t sign any PoA that is unlimited, be sure that the figures you agreed to sell for appear in the PoA. If they don’t then the empowered party can legally sell for any price they choose, thus allowing them to potentially deduct a commission two or three times that agreed, or worst case scenario send you no money at all.

 

2)      Research the company and the people you are dealing with, find out what they have to lose if the worst happens and they do not act in your best interests or don’t send you the full balance of funds. Be sure that they are sizable and cannot afford a legal investigation or have their reputation brought into disrupt. If their business is worth more than your property, you are sure to be fine.

 

After 9 years of business and more than 1000 PoA’s we are proud to say that our honour has never been questioned, but it is not true for all agencies or indeed all solicitors, especially in tough times when money is tight many be known to become tempted to exploit the trust of their clients. Sadly we have a long list of clients who have come to us after having been poorly treated by their empowered representatives, costing them money, their property or both. Naturally it is only true in the smallest number of cases, but had these people read this article first and taken its advice, their problems would have never existed at all.

 

Many vendors naturally fear the worst case scenario; that the PoA will entitle their representative to sell the property and run off with the money. The truth is that without you (the owner) being in Bulgaria for the 3-4 week conveyancing, speaking Bulgarian and knowing the whole procedure and going to all the right departments, queuing, form filling etc there is no other safer way to do it.

 

Technically a PoA entitles a third party to act for the vendor and handle the funds at some point in the deal, thus it is possible for fraud to take place if the empowered party is immoral and intent on criminal activity. As such, if you are dealing with a ‘one man band’, a poorly branded or under invested website with a mobile number, a company without staff, without history, assets, articles, reviews, real client references from real people, journalistic acknowledgments (not paid for advertising junk) etc, you best not empower them as your property will potentially mean more to them than their ‘business’.

 

Much better is to stick with larger firms who are dealing with millions of Euros of property transactions and thus shoulder a vast responsibility for the correct processing and accounting of it all. You can rest more assured that they have a huge amount to lose and they need to get the job done for the sake of the future of their company. The same applies to solicitors; like agents they are only individuals and should they decide to consciously commit fraud and use the PoA against your interests then they too have to fear something to lose and a criminal record too.

 

It is worth stating at this point that unlike in the UK, all Bulgarians have an ID card and an ID number, almost nothing can be achieved without using it, be it registering for a new internet connection or paying a credit card bill. As a police state, this process of identifying everyone is quick and efficient and offers a great defence against the type of fraudulent behaviour being discussed here.

 

The best way to be sure that you will get your money is to ask for client references from your agent or solicitor. This is only necessary once the deposit has been collected, before that it is premature, but any decent company with an unblemished trading history will willingly supply you with contact details of previous clients who are the best source of an honest unbiased review of their conduct.

 

Remember that the PoA empowers an individual, not a firm, as such the advantages of empowering  a solicitor over your agent for this non legal task of conveyancing is only a matter of trust and personal choice, there is no additional professional protection one way or the other.

View selection  (0)
Valuation request
What is your property worth?
Name
Telephone
Email
Property location
More info