Notarized POA for real estate sale, signed abroad

June 20, 2016

Foreign notaries public can witness signatures on powers of attorney for Bulgarian real estate transactions, without having to witness its “content” (“clauses”).

With the changes in the local legislation, done in 2008 via acceptance of new Civil Code, a new requirement has applied – the powers of attorney, witnessed by local Bulgarian notaries, creating rights for performing real estate transactions in deed form (that are, for example, the acquisition-sale contracts related to immovable properties, the establishment of building right or a mortgage, etc. ) should receive notary witnessing both of signature and content, done altogether – according to art.37 of the local Contacts and Obligations Act /COA/. This actually represents aggregation of two individual verifications on the power of attorney:  On one hand, verification the signature of the authorizer, and on the other hand – verification of the content (clauses) of the document. These two should be performed by the notary public in the same day, and their registration numbers in his/her records, must be following ones. In practice, this double verification is performed with two stamps and two signatures of the notary public – one for certifying the signature, and the other one for certifying the content. Also under the provisions of art.590 of the Civil Code (CC) the power of attorney for property transaction in Bulgaria has to be signed in two identical originals (and this is why It costs more), where one original must be kept in the records of the notary public for period of 10 years. This hard copy has important role as a proof, because it keeps details who is the authorizer, as well the fact of controlling properness of the ac of authorization, and the identity with the other hard copy, used for the transaction itself.

In our capacity of Bulgarian property conveyancers, as we perform Bulgarian legal services related to local properties for us it is obvious that this heavier regime has been created by the local lawmakers to reduce the property frauds. This is why the provision of art.37 COA is imperative and any deviation will lead directly to insignificancy of the power of attorney, on the base of lack of valid legal form – i.e. non-proper POA would be useless in eventual attempt for property transaction related to the detailed in the document real estate.

So a question arises here: How a Bulgarian citizen residing abroad, could sign a valid power of attorney for property transaction with Bulgarian immovable property that could be used then before the local notary public in the area where the property is situated? The first option would be to sign power of attorney before the nearest Bulgarian consulate office, as the consular have functions to witness documents, with similar powers to the notary public (as the Bulgarian legislation governs their work). We have used in our practice many POA  signed this way. But not always this is convenient for the authorizer; so in such cases, the witnessing of power of attorney (or letter of authorization) should be done by the nearest notary public in the area (or solicitor, or commissioner of oaths – depending of the local legal system). The local laws in their country of residence, in most situations do not require witnessing both of signature and content of the letter of authorization. So the next question arises: “Should the Bulgarian notary public then (the one who has to witness the property transaction), deny accepting a letter of authorization (POA), signed and legalized abroad without verification both of the signature and content?”

There are two controversial opinions in the Bulgarian legal theory. The first one step on the established in Bulgaria legal order and proclaims that the requirement of art.37 COA should always be followed, regardless if the power of attorney has been signed in Bulgaria or abroad. The opposite opinion that defends the interests of the civil relations, the free business initiative within the EU and the free trading initiative, proclaims that the imperative clause of art.37 COA should apply solely in Bulgaria and should not stop or burden the legal order applicable in the country where the signing and witnessing is done.

Despite the polar differences in the legal theory, the binding court practice in Bulgaria accepts, and respectively follows the second opinion: “When the Bulgarian legislation requires a specific form of notary deed for property transaction, it is not necessary for the power of attorney to consists of both witnessing its signature and content, if the legal requirements for such authorization in the country, where this document is signed, have been properly fulfilled.

In addition, Art. 61 of the Code of International Private Law (CIPL) allows alternate establishment of the form of legal deals having international-private element – i.e. either following the law, applicable towards the deal itself /lex causae/ or, the law binding in the country where the transaction will be performed (lex loci actus). In addition, Art.98, al.5 CIPL proclaims that for the validity of unilateral statement in relation to existing or prospective agreement, it is necessary to follow the requirements towards its form, established by the applicable law, or the law in the country where this statement has been made.

On the base of our 10 years of work experience with powers of attorney, signed and legalized overseas in many different countries, and then used by us in Bulgaria, we can make the conclusion that POA creating rights for local property transaction in notarial form, which has been witnessed abroad not under the imperative provisions of art.37 COA, is valid for use in Bulgaria – as long as the requirements for validity in the country of signing, have been followed properly (which circumstance we supervise when preparing powers of attorney and during the process of its signing and legalization).  We have performed on behalf of our clients many property sales and purchases in Bulgaria via power of attorney, signed abroad. It would be inexpedient to accept the opposite opinion in the legal theory. Therefore the single-case practice of few notaries public, which we have personally experienced in the past (one notary in Pomorie and another one in Sandanski) to refuse to accept powers of attorney, witnessed by foreign notaries public abroad, without both verified signature and content, does not have legal bases and contradicts not only with the obligatory practice of the Supreme court, but also with the interests of the developing civil relations.

* If you need legal assistance for the discussed above matters, do not hesitate to contact our law firm: http://lexsofia.com/contacts/ 

Sources:

1. Rome Convention for applicable law towards contractual obligations 1980.

2. Code of International Private Law

3. Contacts and Obligations Act

4. Bulgarian Civil Code.

5. Act of Notaries and Notary work

6. Ordinance No.32 for work archives of notaries public and the notary offices.

7. Decision 101/05.04.2011 of the Supreme Court.

8. “Voluntary representation in notarial procedures under the binding force of the new Civil Code” – prof. Ekaterina Mateeva.

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