Real estate lease agreements: Deletion of registration

Landlords in Bulgaria often face a practical problem upon premature termination of real estate lease agreements. The issue refers to the inability of deleting the registration of the respective agreement in the registry office[1], corresponding to the location of the real estate. The topic has become particularly relevant in the current situation of the COVID-19 pandemic.

A real estate lease agreement for a term of over a year may be registered in the respective registry office on the grounds of Art. 112 of the Property Act. In the event of transfer of the real estate, the lease agreement continues to be in force for the acquirer as a consequence of its registration (Art. 237, para 1 of the Obligations and Contracts Act).

However, there is a problem when the registered lease agreement must be terminated ahead of term due to non-fulfillment of the obligations of the tenant. A question arises as to whether, after proper annulment of the lease agreement, the landlord can independently make a deletion in the relevant registry office. As we have already established, the landlord has an interest in such deletion because it is relevant when transferring the property to third parties.

Bulgarian legislation does not regulate the deletion of a registered real estate lease agreement . The issue has been resolved in the mandatory case-law of the Supreme Court of Cassation, laid out in ruling № 230 / 02.05.2012.

The ruling states that, according to Аrt. 569 of the Civil Procedure Code (CPC), the actions listed therein are performed under the order of notarial proceedings. These actions include registrations, remarks and deletions, in the cases provided by law. By virtue of this norm of the CPC and of the Rules for registrations (RR), it follows that those registrations and remarks, for which it is explicitly provided, are deleted. The RR does not envisage the deletion of a registration of a real estate lease agreement as this action would be pointless. The registration of a lease agreement has a declaratory effect in relation to third parties and provides protection to the tenant . According to Art. 237, para. 1 of the OCA, if a lease agreement is registered, it becomes obligatory for the acquirer of the real estate. A lease agreement for a specific term is terminated upon expiration of that term. This also terminates the declaratory effect of the registration. In case the lease agreement is extended for a period longer than one year, it should be re-registered in order to protect the interests of the tenant for the term of its validity.

The ruling of the Supreme Court of Cassation is maintained invariably in the case-law (see Decision № 210 of 20.05.2013 of the Supreme Court of Cassation under civil case 3108/2013, II c.d., CC, rapporteur judge Zlatka Ruseva; Decision № 281 of 13.06.2017 of the Supreme Court of Cassation under civil case 375/2017, I c.d., CC, rapporteur Judge Kostadinka Nedkova; Decision № 613 of 1.12.2017. of the Supreme Court of Cassation under civil case No. 2812/2017, I c.d., CC, rapporteur Judge Rositsa Bozhilova).

The Court’s interpretation should be applied and, until the adoption of explicit provisions in the applicable legislation, as is the case for leases of agricultural land (Article 27, paragraph 2 of the Agriculture Lease Act), the deletion of a registration of a real estate lease agreement is inadmissible.

For the sake of completeness, it should be noted that the aforementioned does not refer to the possibilities for registrations and remarks with respect to registered real estate lease agreements.

[1] Until the establishment of a valid Property Register, all entries, remarks and deletions are made by the local registry offices.

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