What if a client who buys a new property in Bulgaria and runs out of financing for the second deposit date? Is the first deposit forfeited?

If a client buying a new property in Bulgaria is unable to finance the second payment, the consequences depend on the terms of the Preliminary Contract and any additional agreements with the developer. Here are typical scenarios and possible consequences:

  1. Loss of first payment (down payment)
  • Non-refundable deposit: In many preliminary contracts, the first payment (down payment) is specified as non-refundable, meaning that if the buyer is unable to make the next payment as scheduled, the developer has the right to keep the down payment as compensation for breaking the contract.
  1. Possibility to negotiate with the developer
  • Renegotiation of terms: The buyer can try to negotiate new payment terms with the developer or obtain an extension of the payment term. Developers can be flexible depending on the market situation and the buyer’s individual circumstances.
  • Changing the payment schedule: It is possible to set up a new payment schedule that allows the buyer to settle outstanding payments at a later date.
  1. Loss of right to real estate
  • Breaking the contract: If the buyer is unable to make the required payment and fails to reach an agreement with the developer, the preliminary contract may be broken, which means losing the right to purchase the property.
  • Sale resumption: The developer may resume the sale of the property to another buyer.
  1. Legal implications
  • Contractual clauses: There may be clauses in the preliminary agreement that specify contractual penalties for failure to meet payment deadlines. It is important to read the contract carefully and understand the potential financial consequences.
  1. Financial support
  • Mortgage loan: the buyer may consider obtaining a mortgage to cover the missing funds. It is worth consulting with a bank to obtain a loan or to increase an existing line of credit.
  • Loans from friends or family: Alternatively, the buyer can try to get financial help from friends or family.