"Rent-to-own" sounds like the perfect answer for someone who does not yet have the deposit or the mortgage approval: you move in straight away, pay monthly, part of the money comes off the price, and in a year or two you buy. For the owner it is a way to sell at a better price without waiting for a buyer with a loan already in hand.
The catch is that Bulgarian law has no separate "rent-to-own" contract. What people call by that name is a combination of two familiar agreements — a lease and a preliminary contract of sale (a promise to sell). How safe the deal is depends entirely on how those two are written and registered. This guide explains how to do it properly and where the traps lie, for the tenant-buyer and for the owner alike.
It builds on two of our earlier guides: deposits and preliminary contracts and selling a property on instalments without a bank. The focus here is on what sets rent-to-own apart: you live in the property as a tenant while you are not yet the owner.
The usual structure is:
Until the notarial deed, the seller remains the owner. Everything the tenant has paid up to that point is protected only as far as the contracts allow.
Without a preliminary contract, the "right to buy" is just a promise. To be enforceable in court, the contract must:
Notarising the signatures is not compulsory but is strongly advisable: it fixes a certain date and removes any dispute about who signed what.
If the owner refuses to transfer the property, the tenant can bring a claim under Art. 19(3) ЗЗД — the court declares the preliminary contract final, and the judgment takes the place of the notarial deed. The statement of claim must be entered in the Property Register (Art. 114(1)(b) of the Property Act): rights and attachments acquired by third parties after that registration cannot be enforced against the claimant.
The price in the preliminary contract is fixed when it is signed. In a market where prices are rising at double-digit annual rates, an owner who has promised to sell in two years at today's price has a strong incentive to back out. A tenant whose income has fallen has an incentive to back out if prices drop.
So agree expressly:
If part of the payments is a deposit (задатък), the rule in Art. 93 ЗЗД is clear: if the buyer defaults, the seller keeps the deposit; if the seller defaults, they return it twice over. If it is an advance, it is in principle refundable when the deal does not go ahead. That is why the contract must say exactly what each payment is.
This is the most common source of disputes. If the contract says only that "30% of the rent is credited against the price", then if the deal collapses the parties will argue over whether that 30% was rent (not refundable), a deposit (lost or doubled) or an advance (refundable).
Set out the monthly payment on two separate lines:
| Part | What it is | What happens if the deal fails |
|---|---|---|
| Rent | Payment for using the property | Not refunded — the tenant has lived there |
| Payment towards the price | An advance or a deposit — agree which | Refunded (advance) or settled under Art. 93 ЗЗД (deposit) |
Pay by bank transfer with a clear reference — "rent for [month]" and, separately, "payment under preliminary contract dated …". That is your evidence, and it is also the right basis for tax: rental income is taxed as such (see our guide to tax on letting property), while payments towards the price form part of the sale price. The owner should confirm with an accountant exactly how to declare each.
Until they own it, the tenant is exposed to anything that happens to the owner:
How to protect yourself:
If for any reason the property changes hands, the fate of the lease depends on Art. 237 ЗЗД: a registered lease (leases for more than one year are registrable) remains in force against the new owner until it expires; an unregistered lease with a certain date binds them for up to one year from the transfer. Details are in our guide to buying or selling a home with a tenant in it. On a two-year arrangement, registering the lease is cheap extra protection.
The whole arrangement often rests on the tenant getting a mortgage after a year or two. If that does not happen — income falls short, rates change, the bank's valuation comes in below the price — the deal is left hanging.
Agree in advance:
If you are planning to borrow at the end, talk to a bank before you sign — so you know realistically how much you can raise.
The arrangement carries risks for the seller too:
The notary fee and the municipal transfer tax are calculated at completion on the agreed price or the tax valuation, whichever is higher — amounts paid earlier do not reduce the base. You can estimate the costs with our notary calculator.
Rent-to-own can work — between relatives, for example, with an owner who is in no hurry, or for a buyer who is only a short time away from mortgage approval. But it is not an off-the-shelf product; it is a structure built from two contracts, and all the protection lies in the detail: which payment is what, what happens on withdrawal and on a refused loan, and whether the rights are registered in time.
If you are considering a deal like this — as tenant or as owner — call us or come into the office. We will check the property, review the draft contracts with our lawyer and tell you where the risk lies in your particular case.
Verified November 2026. This is general information, not legal advice for a specific case.
