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 BUYING PROCESS STEP BY STEP |
 Write down what kind of property you want and describe the experiences you have about property in Bulgaria. Is your goal to make a good investment or to buy a summer property abroad for pleasure for the family in many years to come and to spend much time in your third age. |
 Based on your notes we will discuss LUNA Bay as being the right choice for you. The intention is to attract investors and residents who support the idea to create a well organized Black Sea oasis and a relaxing atmosphere. |
 Choose your preferred villa suitable for your requirements and your budget. Take contact to your private banker and get a financing offer and counselling from us about tax and revenue from letting out. When these questions are settled next step is to make a reservation in connection with a visit on site prior to signing the preliminary contract. |
 When your villa has been chosen we sign a reservation form and 5,000 EUR must be paid to the Construction Company’s Danish account in order to make the reservation firm. Not later than 14 days after construction right is obtained the buyer is obliged to transfer first instalment. If this 14 days respite expires without payment of first instalment 4,000 EUR will be refunded (5,000 EUR less 1,000 EUR as administration charge). |
 When you have decided for this unique project you must choose which payment term you prefer (see below). On receipt of this information and your personal data we will send you the filled-in preliminary contract. We recommend you to get counsel from you banker and lawyer specialised in Bulgarian/Danish law to ensure all legal aspects are understood. |
*Some of the documents are available ready for download – see under INFO PACKAGE |
| THREE POSSIBLE METHODS OF PAYMENT |
The traditional method of payment
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30 % of the property price is paid upon signing the contract deducted the reservation fee already paid; |
40 % of the property price is paid upon the raising of the rooftree; |
20 % of the property price is paid upon issuance of a due certificate of completion of the site; |
| 10 % of the property price is paid upon issuance of a legal occupancy certificate and execution of the conveyance deal. |
30 / 70: the bank guarantee method of payment
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The buyer pays 30 % of the property price upon signing the contract and the bank of the buyer issues an irrevocable bank guarantee for the remaining 70 % of the property price in favour of the bank of the construction company. These 70 % of the purchase price can technically be released by the construction company’s bank upon issuance by the independent construction controller of a legal occupation certificate and, possibly, also certificate of a finishing works controller - if this process is needed in the specific case. The normal procedure is that 70 % of the property price is paid by the buyer to the bank of the construction company upon issuance by the independent construction controller of a legal occupation certificate and after a due check for defects in the construction and the final handing over of the completed site. This arrangement is only possible if your bank will issue a bank guaranty securing the 70 % to be released, when permission for occupancy has been issued. In Denmark this is typically not a problem, but for other countries in the EU the bank procedures can be different. |
Discount for cash payments
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When SUN Village, one of BM Development’s projects in Biala, was being built, 1/3 of all buyers chose to pay 98 % of the whole price of the property upon signing the contract, in order to get a considerable discount. The purchasers of holiday homes in LUNA Bay Villa Resort can also take advantage of similar off-plan discounts in case they decide to make a bigger down payment:
If the buyer pays 50 % of the purchase price upon signing the contract the buyer gets a 5 % discount calculated from of the total price exclusive VAT.
If the buyer pays 90 % of the purchase price upon signing the contract, the buyer gets an 8 % discount of the total price exclusive VAT.
In all cases the remaining 10 % of the property price are paid upon issuance of the occupancy certificate and are kept in the account of the Danish Law firm until all possible defects are rectified. All discounts have been calculated under condition that the current regulations concerning VAT due for construction rights remain in force. |
| An opportunity to gain a low-risk profit |
Although you buy a property abroad with an expected considerable property gain due to the growth of the property market, the low off–plan prices, the forecasted price rise and the revenue from letting the property, the risk is just theoretical and is fairly limited, since the bank of the construction company provides a large part of the financing. With its involvement in the process the latter bank shows with its active involvement that the project is financially sound from the local bank’s point of view.
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| Buyer’s guarantee and safety |
The buyer is obliged to secure (through her/his bank) the outstanding amount of the purchase price, as well as the maintenance expenses for the first year. The reason for this is to ensure that all buyers are solvent and that in spring 2008 there will be no unfinished units in LUNA Bay Villa Resort once the development is completed and ready for use. Upon payment of the first instalment the construction rights is transferred to the buyer, thus entitling him/her to some considerable advantages. |
By obtaining the construction rights upon payment of the first instalment, compared to obtaining it upon completion of the whole building, the buyer saves VAT on 30 % of the whole property price, amounting to approximately 6 % of the gross amount. |
These real rights, acquired by the buyer, are entered in the Land Register and represent a guarantee of ownership, provided that the due payments under the contract are paid in a timely and due manner by the buyer. |
The purchaser saves fees, due to the Bulgarian authorities, amounting to roughly 1.5 % of the total price. |
| Land ownership acquired by buying shares in the management company |
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Foreigners have no legal right to own land in Bulgaria, but they can own the building on the land without limitations. Therefore the ownership of the land is technically arranged upon subscription of the shares in the LUNA Bay Villa Resort limited liability company, unencumbered with mortgages and debts, which put the land at the disposal of resort according to an iron clad contract securing the rights of the villa owners.
Upon making the final payment, the respective shares in the LUNA Bay Villa Resort Company are transferred to the name of the buyer. The price of these shares is included in the total price of the property; therefore buyers do not pay extra for acquiring the shares. When all shares in the company have been transferred to the new owners, this company starts to function as a property management company (LUNA Bay property management company). All common facilities, including the swimming pools, restaurants, garages, etc., shall be owned and administered by the management company.
BM Development OOD undertakes to manage the resort in accordance with its budget, the provisions and conditions stipulated in the contract. The LUNA Bay company shall pay to BM Development OOD an annual fee in accordance with the management consulting agreement concluded between the two companies. All property buyers will be expected to pay a yearly maintenance fee of approximately 8 EUR until 2009. Therefore, if your villa has a total area of 110 m², the owner shall pay approximately 880 EUR per annum pre-paid total expenses. |
| Follow these steps to make a reservation in LUNA Bay Villa Resort |
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