The regulations governing tenancy agreements in Bulgaria are contained in the Bulgarian Law on Obligations and Contracts (ZZD) and, in contrast to the German Civil Code (BGB), where tenancy agreements for residential property are specifically regulated, the subject matter of the contract is irrelevant under Bulgarian law. This article takes a closer look at the rental agreement from the perspective of Bulgarian legislation in comparison with German law, with an emphasis on the rental of immovable property, although the regulations can in principle also be applied to movable property.

Form

Neither Bulgarian nor German law requires a specific form for a rental agreement to be valid, i.e. verbal rental agreements are perfectly valid and binding on both parties. The difference is that, according to Section 550 of the German Civil Code (BGB), a contract that is not concluded in writing is valid for an indefinite period. Such an assumption does not exist in our law. However, it is recommended that contracts concluded for a period longer than one year be registered for the purpose of providing proof to a new owner of the rented property.

This is one of the main differences compared to German law. According to the BGB, when the residential property is sold, the third party takes the place of the landlord and has the same rights and obligations towards the tenant. In Bulgaria, this rule applies for the entire term of the contract, but only if it has been registered in advance – Art. 237 (1) ZZD. Another option for the new owner of the rented property to be bound by the contract is to sign it on a credible date, i.e. to have it certified by a notary. In this case, the new owner is bound by the terms of the contract until the end of the term, but not longer than one year after the transfer – Art. 237 (2) ZZD. If, on the other hand, the contract was concluded verbally or in simple written form, it is valid for the new landlord for an indefinite period and termination would be easier in this case.

Term

In Bulgaria, the rental agreement can be concluded for an indefinite or fixed term, with the term being limited to 10 years in accordance with Art. 229 of the Civil Code, provided that it is not a commercial transaction. Any agreement for a period longer than the maximum permitted period is invalid and the rental period is deemed to have been concluded within the legally permissible time frame.

Another restriction introduced by the legislator is the possibility of subletting to third parties for up to three years by persons who are not owners of the property (e.g. administrators, users) and have no power of disposal over the property.

Transfer of use to third parties

This institution is known in both German and Bulgarian law, where the regulations are similar. An important aspect here is that when the rented property is transferred to third parties for use, the tenant is liable to the landlord for his actions or for any damage caused by him.

Rights and obligations

The contracting parties have the following rights and obligations:

1. The landlord undertakes to hand over the rented property in a condition suitable for the agreed purpose of use, unless otherwise agreed. If the property is handed over in a condition that is contrary to the agreement, the tenant is entitled to demand rectification, a reduction in price or termination of the contract. For this reason, an acceptance/handover report is always drawn up, recording the condition of the property/item at the time of handover.
2. The landlord is prohibited from interfering with the undisturbed use of the property, which may manifest itself in eviction, access to the rented space without the tenant's consent, carrying out major renovation work without the tenant's consent, which also deprives him of possession of the property, or renting out the rented property while the tenancy agreement with the previous tenant is still in force. The landlord is liable for these actions.
3. A fundamental obligation of the tenant is to pay the agreed rent. In contrast to German law, our legislation does not contain any provisions regarding the deposit, which has become an integral part of the contractual provisions in recent years. The legislator has left this agreement to the will of the contracting parties. The BGB contains detailed provisions on the operating costs of the flat, and the ZZD merely stipulates that the tenant is responsible for these costs. As a rule, these include the costs of electricity, water and heating. These amounts are rarely included in the rent and are not usually included in the contract, as their amount varies from month to month and depends on the tenant's consumption, for which they are responsible.
4. The tenant is obliged to use the property in accordance with the contract or its intended purpose (e.g. a rented flat may not be used as a nightclub).
5. The tenant is responsible for the maintenance of the property and the costs of minor repairs resulting from normal wear and tear. The legislator provides an incomplete list of examples of such damage: soiling of the walls in the rooms, rust damage to taps, etc. All other necessary work is to be carried out by the landlord, unless the tenant is responsible for it. In this case, the tenant is liable both for his own culpable actions and for those of the persons belonging to his household. It is permissible to offset the repair costs against the rent payable in favour of the contracting party who has borne them through no fault of their own. In this context, the tenant is obliged to notify the landlord immediately of any damage or interference with the property. Otherwise, they shall be liable for the repair or compensation.
6. The house rules provided for in the BGB are equivalent to the tenant's obligation under the ZZD to comply with the provisions governing the management and administration of condominiums, insofar as the rented premises are part thereof.
7. Upon expiry of the contract or in the event of termination, the tenant is obliged to return the property and to pay for any damage caused by him. He can only be released from this liability if he can prove his innocence with regard to the damage. In the case of regular tenancies, it has become common practice to draw up a second acceptance/handover report when the rented property is handed over, recording the condition of the property at the time of termination of the contract.

Termination

The tenancy agreement in Bulgaria ends when the agreed term expires. If, after the end of the contract period, the tenant continues to use the rented property with the knowledge and without objection of the landlord, the tenancy is deemed to be extended indefinitely.

According to Art. 238 of the ZZD, leases for an indefinite period may be terminated by either party with one month's notice, either verbally or in writing.

The above reflects the basic legal principles that the parties are obliged to comply with. However, depending on their wishes, the parties may agree on additional provisions, rights and obligations relating to the settlement of disputes in the event of non-payment of rent, claims for damages, eviction from the property, repair of damage, etc.

The negotiable nature and degree of abstraction of the provisions of the ZZD require many special considerations when concluding a tenancy agreement, which should be taken into account by the contracting parties. Tenancies are one of the main components of economic life and, as such, they open up a variety of possibilities for agreements that are not regulated by the legislator and cannot be regulated on a case-by-case basis. For this reason, rental agreements should be approached with understanding and caution, regardless of the intensity of their conclusion.

Special features and important information

The written form is recommended as proof that the agreement has been concluded between these parties and under these conditions. This allows tenants to avoid unilateral termination without notice or rent increases. All payments – for rent, electricity, water, etc. – should be made by bank transfer, as these serve  as proof of fulfilment of contractual obligations and do not depend on the landlord – who should not issue a receipt to confirm receipt of payments, as the payment is considered to have been made when the credit has been credited to the recipient's account.