Not every purchase goes through a bank loan. Sometimes the buyer is a relative, sometimes they are waiting for the proceeds of another sale, and sometimes the seller simply prefers to sell faster for part of the price now and the balance in instalments. A deal like this is entirely lawful — but it carries more risk than it appears to.
The reason is simple: ownership passes to the buyer when the notarial deed is signed, not with the last instalment. From that moment the unpaid part of the price is just a claim the seller holds. If it is unsecured, the buyer can sell or mortgage the property, and the seller is left suing someone who no longer owns it.
1. Final deed only after full payment. The parties sign a preliminary contract, the buyer pays in instalments, and the notarial deed is executed after the last one. The seller is protected, but the buyer pays for months or years without owning anything. The risks of that route — deposits, penalties, a court claim under Art. 19 of the Obligations and Contracts Act — are covered in our guide to deposits and preliminary contracts.
2. Deed now, balance in instalments secured by a mortgage in the seller's favour. The buyer becomes the owner straight away, and the seller holds security over the same property. This is the balanced option, and it is what this guide is about.
3. A bank loan for the balance. Where the buyer can get a mortgage, this is usually the cleaner route: the seller receives the full price at once.
Bulgarian law gives the seller of real estate a statutory mortgage (законна ипотека) over the property sold, for their claims under the transaction (Art. 168 of the Obligations and Contracts Act, ЗЗД). It needs no separate agreement and no consent from the buyer — but it only works once it is entered in the Property Register. Registration is made on the seller's application, and in practice it should be done immediately after the deed itself is registered, before the buyer has any chance to dispose of the property.
Two points that are often missed:
Instead of — or alongside — the statutory mortgage, the buyer can grant the seller a contractual mortgage by notarial deed (Arts. 166–167). It states the exact amount, term, interest and property.
The practical advantage is recovery. A notarial deed recording the debt and a mortgage contract are grounds for an order for immediate enforcement under Art. 417 of the Civil Procedure Code (points 3 and 6). On default, the seller can reach a bailiff considerably faster than with an ordinary lawsuit.
The more detailed the deed, the fewer grounds for dispute. At a minimum:
How to read and check each of these parts is explained in our guide on reading a Bulgarian notarial deed.
The seller has two main routes, and they lead to different outcomes.
Recover the money. With a registered mortgage, the seller can enforce against the property — it is sold at public auction and the seller is paid ahead of unsecured creditors. The mortgage follows the property: if the buyer has sold it on, the security stays in place.
Rescind the contract. Contracts that transfer ownership of real estate can be rescinded only through the courts (Art. 87 of the Obligations and Contracts Act). That means a lawsuit, not a letter. The statement of claim is registered so that it binds third parties. On rescission each side returns what it received — the property goes back to the seller and the instalments paid go back to the buyer.
Which route is better depends on the market and the amount. If prices have risen, getting the property back may be worth more; if the balance is small, recovery is usually faster and cheaper. It is a decision to take with a lawyer before the first formal demand goes out.
An instalment deal can feel like a concession, but the buyer carries risks too:
The notary fee and the municipal transfer tax are calculated on the full agreed price (or the tax valuation, if higher) and are paid at completion — spreading the price does not spread them. On top come the fees for registering the mortgage and, later, for cancelling it. Whether the seller owes income tax on the sale depends on the property and how long it has been owned — see our guide to tax when selling property.
An instalment deal between two private parties can work well for both sides — provided it is written to survive the bad scenario. If you are considering selling or buying this way, call us or come into the office. We will review the terms, prepare the draft deed with the notary and tell you exactly what protects you.
Verified October 2026. This is general information, not legal advice for a specific case.
