The most common real estate fraud schemes in Bulgaria and how timely legal action can prevent them 🛡️
Real estate fraud in Bulgaria is not accidental, exotic, or rare. It consists of repeatable legal patterns that adapt to the personal circumstances of the victim, the type of property, and the transaction structure. What these schemes have in common is that they directly affect the right of ownership and deliberately create an appearance of legality, capable of misleading buyers, owners, heirs, lenders, and even professionals involved in the transaction.
Unlike simplistic fraud scenarios, most real estate fraud cases do not involve missing documents, but rather:
- abuse of otherwise valid-looking documents,
- misuse of representative authority,
- manipulation of public registers, and
- procedural pressure through courts, arbitration, or enforcement.
Under Article 77 of the Bulgarian Ownership Act, ownership of immovable property may be acquired by:
- legal transaction,
- acquisitive prescription, or
- other methods expressly provided by law.
This plurality of acquisition grounds is precisely what fraudsters exploit — they construct a plausible chain of title, similar to how title fraud operates in U.S. jurisdictions when false deeds, forged powers of attorney, or fabricated conveyances are inserted into the public record.
Even though Bulgarian law requires that contracts transferring or establishing real rights over immovable property be executed in the form of a notarial deed pursuant to Article 18 of the Obligations and Contracts Act, formal compliance does not eliminate risk where:
- genuine intent is absent,
- representative authority is invalid or fabricated, or
- the identity of the parties is falsified.
This distinction between formal validity and substantive ownership mirrors U.S. real estate litigation, where a recorded deed does not cure forgery, impersonation, or lack of authority, despite public recording.
What do classic real estate fraud schemes look like in practice? 🔍
In real cases, these schemes almost never appear in isolation. They are frequently layered and staged, evolving over time. A single case may:
- begin with a forged power of attorney,
- continue with a notarised conveyance,
- proceed to registration, and
- end in forced enforcement or foreclosure-like pressure.
Below are the core legal mechanisms underlying the majority of real estate fraud cases, explained from the perspective of property attorneys, solicitors, and barristers dealing with complex ownership disputes.
Transfer or sale of property through a forged or falsified power of attorney 🧾
This is one of the most common and most dangerous real estate fraud schemes. The perpetrator does not impersonate the owner directly, but instead appears as a purported representative, relying on trust in the legal institution of representation.
Under Bulgarian law, representation arises:
- by operation of law, or
- by the will of the represented party — Article 36 of the Obligations and Contracts Act.
In fraud scenarios, however:
- the owner’s will is entirely absent,
- the power of attorney is forged or altered, or
- it is used after revocation, death, or termination of authority.
A critical safeguard is found in Article 37 of the Obligations and Contracts Act, which requires that when a transaction is subject to a special form, the authorisation must be granted in the same form. For notarial deeds, this means:
- a written power of attorney,
- notarised simultaneously as to both signature and content.
This requirement is functionally comparable to U.S. practice, where a forged or invalid power of attorney cannot convey title, even if relied upon by a closing agent or escrow company.
In practice, fraud emerges precisely here:
- the document appears formally correct,
- notarisation exists,
- but the authority never originated from the true owner.
Subsequent litigation focuses on:
- absence of genuine consent,
- lack of valid representative authority, and
- invalidity of the disposition.
Legal protection is typically pursued through:
- declaratory actions, and
- ownership claims under Article 124(1) of the Civil Procedure Code, analogous to quiet title actions in U.S. courts.
Impersonation of the owner during notarisation of a transaction 🪪
In this model, no representative is involved. The perpetrator personally appears before the notary and falsely presents themselves as the owner of the property.
This scheme is often supported by:
- unlawfully obtained data from notarial deeds,
- cadastral sketches, or
- ownership certificates,
allowing the fraudster to construct a convincing documentary identity.
The major danger for buyers lies in the fact that:
- the transaction is notarised, and
- subsequently registered.
However, registration serves a function of public notice, not a guarantee of material truth — a principle expressly reflected in Article 1 of the Rules on Registration.
This is directly comparable to U.S. law, where:
- recording statutes protect good-faith purchasers only within strict limits, and
- a forged deed conveys no title, regardless of recording.
When identity is falsified:
- registration does not validate the transaction,
- ownership does not transfer, and
- the true owner retains the right to seek judicial protection.
Litigation typically centers on:
- proving lack of identity between the signatory and the rightful owner, and
- unwinding subsequent transfers based on the defective root deed.
Creation of a fictitious ownership “legend” through false documents followed by resale 📁
This is a structured and often long-term scheme, commonly seen in high-value properties or inherited real estate.
The fraud unfolds in stages:
- fabrication of official or private documents suggesting restitution, inheritance, or contractual acquisition,
- construction of an apparently coherent chain of title, and
- presentation of these documents to institutions, buyers, or lenders.
The buyer encounters:
- a full document set,
- apparent historical continuity, and
- no obvious gaps.
This mirrors U.S. title fraud cases where:
- fabricated deeds are inserted into the chain of title, and
- subsequent purchasers rely on surface-level title searches.
The legal risk is severe because:
- absence of a genuine acquisition ground means no ownership ever arose, and
- subsequent transfers are vulnerable to challenge.
Such transactions may be attacked for:
- contradiction with the law, or
- circumvention of the law under Article 26(1) of the Obligations and Contracts Act.
Manipulation of cadastral data and property identifiers as part of the fraud 🗺️
Here, the objective is not an immediate sale, but the creation of administrative legitimacy.
Fraudsters submit:
- true or false documents,
- leading to changes in cadastral maps or registers,
- followed by issuance of sketches showing a “convenient” owner.
The practical danger lies in conflating:
- administrative reflection, and
- substantive ownership.
Cadastral registers have:
- an informational and identificatory function,
- but do not create ownership rights themselves.
Yet, in real transactions:
- buyers, banks, and even professionals may treat a cadastral sketch as proof of title.
Legal defence requires:
- separating cadastral data from ownership acquisition, and
- verifying whether the registered person actually acquired ownership under Article 77 of the Ownership Act.
This is comparable to U.S. reliance on assessor records or GIS data, which do not establish title.
Use of non-authentic or manipulated certificates of encumbrances to conceal legal burdens 🔒
This mechanism is designed to conceal one specific and highly material risk element in a real estate transaction – existing encumbrances such as mortgages, attachments, or enforcement measures. The fraud does not attack ownership directly, but rather distorts the buyer’s risk assessment by creating the illusion of a “clean title.”
In practice, a certificate of encumbrances is presented which:
- is entirely forged, or
- has been altered, or
- reflects a different time period or scope than the one relevant to the transaction.
The critical legal point is that the certificate itself is not the source of legal truth. It is a derivative document reflecting existing registrations. Under Bulgarian law, registration has the function of publicity pursuant to Article 1 of the Rules on Registration, not a guarantee that no risks exist. This is conceptually similar to U.S. title reports, which summarize public records but do not themselves create or extinguish rights.
When a manipulated certificate is used, the buyer may acquire a property already subject to:
- a registered mortgage,
- an attachment, or
- even ongoing enforcement proceedings.
Legal protection in these cases requires urgent action, including preservation of the property and a full reconstruction of the registration history, with particular focus on the buyer’s good faith and the consequences for the real right acquired.
Extraction of information from notarial deeds followed by document substitution 🧩
This scheme is rarely standalone, yet it is one of the most important preparatory stages for more complex real estate fraud. The perpetrators obtain access – lawfully or unlawfully – to data contained in notarial deeds or certified copies, including names, personal identifiers, property descriptions, and acquisition grounds.
The danger lies in the fact that the fabricated documents that follow are factually accurate in appearance. They contain real data, which significantly lowers suspicion among buyers, notaries, banks, and even experienced professionals.
This mechanism fuels:
- forged powers of attorney,
- identity impersonation, and
- artificial construction of ownership chains.
From a comparative perspective, this mirrors U.S. cases where fraudsters harvest data from recorded deeds and use it to produce convincing fake conveyances or impersonate owners in closing processes.
Legally, this stage demonstrates why data access and protection are directly linked to ownership security. Although preparatory in nature, it is often the key enabler of subsequent fraudulent dispositions.
Fictitious contracts containing arbitration clauses followed by procedural pressure ⚠️
This is a procedural real estate fraud, where the initial attack is not against the property itself, but against the owner through an alleged debt. A contract appears – frequently a preliminary agreement or a contract with penalties – which the victim claims never to have signed. Embedded within it is an arbitration clause.
An arbitration proceeding follows, often without the real knowledge or effective participation of the affected person, resulting in an arbitral award for significant sums. That award then becomes the basis for:
- attachment of accounts,
- registration of encumbrances, and
- enforcement against the property.
The risk is twofold. First, the owner often learns of the proceedings late. Second, enforcement actions are initiated swiftly. This has strong parallels with U.S. abuse of default judgments or fraudulent liens used to pressure property owners.
Protection requires immediate dual-track action:
- resisting enforcement measures, and
- challenging the underlying material right.
The Civil Procedure Code provides mechanisms for this, including declaratory claims under Article 124(1) and interim protection where, without it, the enforcement of rights under a future judgment would become impossible or severely hindered under Article 391(1).
Factual verification proceedings with false witnesses and declaratory notarial deeds 🏠
This scheme abuses the legal concepts of possession and acquisitive prescription. Under Bulgarian law, possession is the exercise of factual control over a thing held as one’s own pursuant to Article 68(1) of the Ownership Act, with a statutory presumption that the possessor holds the thing as their own unless proven otherwise under Article 69.
Fraud arises when possession is simulated, typically through coordinated witness testimony, leading to the issuance of a declaratory notarial deed. This deed is then used as a basis for disposal, despite the absence of real possession.
Often, reference is made to acquisitive prescription under Article 79(1) without the necessary factual elements. The defence in such cases is heavily evidentiary and focuses on:
- lack of actual control,
- absence of intent to possess as owner, and
- interruptions of possession under Article 81.
This resembles adverse possession abuse cases in U.S. jurisdictions, where fabricated occupancy or false affidavits are used to claim title.
Inheritance schemes involving substitution or insertion of heirs through documentation 🧬
Here, the fraud targets heir status, rather than ownership directly. After the owner’s death, documents are presented suggesting a different circle of heirs or a different inheritance basis, enabling disposition of inherited property or blocking legitimate heirs.
The legal focus is clear: inheritance opens at the moment of death, and ownership passes by operation of law. When false certificates or fictitious heir status are asserted, the dispute centers on the true heirs and the validity of dispositions made by persons lacking authority.
This is comparable to probate fraud in U.S. practice, where forged wills or false heir claims distort estate administration.
Use of fictitious or disputed family status as an entry point to property 💍
Closely related to inheritance fraud, this scheme relies on asserted marital or quasi-marital status to create apparent rights in property. Claims of spousal connection or cohabitation are used to justify participation in disposition or to obstruct the rightful owner.
The practical difficulty lies in the contamination of property law with family law disputes, significantly complicating and delaying resolution. Legally, the correct approach is to isolate family status from property rights and examine whether the person actually holds any real or contractual right in the property.
Abuse of vulnerable owners through trust, care, and dependency 🤝
Among the most serious schemes, these target elderly persons, persons with disabilities, or socially dependent owners. The fraud begins with conduct – care, assistance, attention – gradually creating dependency. The final stage is a transfer, often formal and seemingly voluntary.
Subsequent disputes focus on:
- whether the will was freely formed,
- whether pressure or abuse of trust existed, and
- whether promised consideration was ever performed.
Such cases require detailed reconstruction of circumstances at signing and subsequent conduct, similar to undue influence litigation in U.S. equity courts.
Transfer of property in exchange for maintenance and care in a context of abuse 🫂
Contracts for maintenance and care are often perceived as socially acceptable and humane instruments for transferring property, particularly where elderly or dependent owners are involved. Precisely because of this perception, they are highly vulnerable to abuse. The fraudulent element does not usually lie in the form of the contract, but in the absence of genuine performance or in the distortion of the transferor’s will at the moment of conclusion.
From a legal perspective, the dispute focuses on the real content of the contractual relationship. Where care is nominal, sporadic, or entirely absent, and ownership has already been irreversibly transferred, the imbalance becomes evident. Bulgarian courts examine not only the wording of the contract, but also its factual execution, the dependency relationship, and the proportionality between the transferred asset and the care actually provided.
This approach closely resembles UK equity doctrines, particularly cases involving undue influence and unconscionable bargains, where courts look beyond formal consent to assess whether the weaker party’s will was overborne. In English law, transfers of property made under relationships of trust and confidence are subject to heightened scrutiny, especially where independent legal advice was absent — a principle functionally analogous to Bulgarian judicial analysis of abused dependency.
Coercion or extortion by persons with authority or privileged access ⚠️
In these schemes, the transfer of property is presented as voluntary, but is in reality the product of pressure exerted by individuals who have factual or institutional access to the owner — social assistants, caregivers, relatives, or intermediaries controlling daily life or access to services.
Legally, the challenge lies in the fact that a formal declaration of intent exists. However, that intent is vitiated. The evidentiary task is to demonstrate the causal link between pressure and disposition. Courts examine the chronology of events, the owner’s vulnerability, and the presence of fear or dependence.
Comparable reasoning exists in UK law, where transactions induced by duress or actual undue influence may be set aside in equity. English courts similarly require proof of pressure that leaves no reasonable alternative, a standard mirrored in Bulgarian judicial reasoning when assessing coercion in property transfers.
Raising funds for a future property without real performance 🏗️
These schemes arise in the context of construction and off-plan sales, where multiple individuals are led to believe that payment will result in ownership of a future property. Funds are collected, yet construction or transfer does not proceed as promised, or proceeds only partially and inconsistently.
The legal risk here is tied to the right to build. Under Article 63(1) of the Ownership Act, the landowner may grant another person the right to construct and become owner of the building. Where such a right is absent, improperly constituted, or exceeded, buyers are left without real rights, holding only contractual expectations.
This is comparable to UK off-plan developments, where purchasers rely on developers’ title and planning permissions. English conveyancing solicitors typically verify that the developer holds a registrable interest capable of disposition. Failure to do so exposes buyers to severe risk, similar to Bulgarian cases where promised rights exceed legally existing ones.
The same property promised or “sold” to multiple buyers 📌
A classic variant of off-plan fraud, this scenario involves one property being promised to several buyers through parallel preliminary agreements or reservation contracts. Each buyer believes they have priority, but conflict arises when final transfer becomes impossible.
The decisive legal factor is that ownership is acquired only through the final notarial deed, not through preliminary agreements. As a result, multiple buyers may find themselves without real rights, despite having paid substantial sums.
This mirrors UK situations where multiple exchange agreements or options exist, but only one registrable disposition can be completed. English law similarly prioritises the final conveyance and registration, leaving earlier contractual claimants to pursue damages rather than property rights.
Establishment of a mortgage or credit secured on third-party or misappropriated property 💳
In these schemes, a false appearance of ownership or authority is created to secure financing. A mortgage is registered, funds are withdrawn, and the property remains encumbered. For the true owner, the consequences can be devastating, as their property is now security for someone else’s obligation.
Protection requires immediate challenge to the mortgage’s foundation, focusing on the absence of authority to encumber the property. This is comparable to UK cases where a charge registered at HM Land Registry may still be set aside if based on forgery or lack of authority, notwithstanding the register’s apparent accuracy.
Fake rental listings and deposits for non-existent or third-party property 🏚️
Although often viewed as “minor” fraud, these schemes are widespread and disproportionately affect tenants and foreign nationals. Listings use real photographs and descriptions, deposits are requested, and communication ceases once payment is made.
The legal issue is straightforward: the advertiser has no right to let the property, and payment lacks legal cause. In UK practice, similar scams are addressed through misrepresentation and unjust enrichment claims, though recovery is often difficult without early intervention.
How timely legal prevention significantly reduces the risk of real estate fraud ✍️
Prevention in real estate fraud cases is not a single action, document, or check. It is a process, and in complex property systems like those in Bulgaria, the UK, and the United States, that process must begin before any financial commitment is made. The core mistake many victims share is assuming that notarisation, registration, or the involvement of an intermediary automatically guarantees safety. In reality, these mechanisms provide structure, not immunity.
Under Bulgarian law, ownership is acquired only where there is a valid acquisition ground within the meaning of Article 77 of the Ownership Act, not merely because documents appear complete. This principle closely mirrors both:
- the UK conveyancing system, where Land Registry entries reflect title but do not cure forgery or lack of authority, and
- the US title system, where recorded deeds can still be void if the underlying transaction is defective.
The most effective preventive approach is to treat a property transaction as a sequence of legal risk points, rather than as a single signing event ⚠️
Verification of ownership as a complete chain, not as an isolated document
A common and costly misconception is that reviewing the most recent notarial deed is sufficient. In reality, ownership must be assessed as a continuous legal chain of acquisition grounds, each of which must be legally valid.
This approach is functionally identical to:
- chain of title review in U.S. real estate practice, and
- deducing title in UK conveyancing, where solicitors examine prior transfers to ensure no break in title.
From a Bulgarian legal standpoint, this means analysing whether ownership was acquired:
- by valid legal transaction,
- by acquisitive prescription, or
- by another lawful method under Article 77 of the Ownership Act.
Any weak link in that chain exposes the buyer to the risk that no real ownership was ever transferred, regardless of how convincing the documents may appear.
Careful examination of representative authority and its legal limits
Transactions involving representatives require heightened scrutiny. Representation arises either by law or by the will of the represented person pursuant to Article 36 of the Obligations and Contracts Act, but this does not mean that any power of attorney is sufficient.
Where the transaction requires a special form, the authorisation must meet the same formal requirements. Under Article 37 of the Obligations and Contracts Act, a power of attorney for a notarial transaction must be:
- in writing, and
- notarised as to both signature and content simultaneously.
This rule serves the same protective function as:
- notarised powers of attorney in U.S. escrow practice, and
- certified authorities reviewed by UK conveyancing solicitors before completion.
Crucially, a formally correct document does not guarantee that representative authority still exists. Revocation, death, or termination of authority prior to signing invalidates the transaction, even if the document looks flawless.
Understanding the difference between registration and ownership
One of the most dangerous misconceptions in real estate transactions is equating registration with ownership. Bulgarian law is explicit that registration serves the function of publicity under Article 1 of the Rules on Registration, and registration, annotation, or deletion is permitted only where expressly provided by law under Article 2.
This distinction is identical in principle to:
- the UK Land Registry’s disclaimer that the register does not guarantee freedom from fraud, and
- U.S. recording statutes, which prioritise notice rather than substantive validity.
As a result:
- registration does not create ownership,
- it does not cure lack of authority, and
- it does not legitimise false identity or forged consent.
Independent verification of the underlying legal basis remains indispensable 🔍
Independent review of encumbrances and enforcement risk
Certificates of encumbrances are derivative documents. They summarise registered data but do not replace the register itself. Overreliance on such certificates exposes buyers to manipulation.
Effective prevention requires:
- direct examination of registrations, and
- assessment of whether any enforcement proceedings, mortgages, or attachments may affect the property.
This mirrors the role of:
- title insurance and lien searches in the U.S., and
- priority and charge checks conducted by UK solicitors before completion.
Heightened caution with inherited and vulnerable-owner properties
Transactions involving inherited property or vulnerable owners require exceptional care. These contexts carry elevated risks of:
- substituted heirs,
- disputed succession rights,
- impaired consent, or
- abuse of dependency.
In both UK and U.S. practice, such transactions trigger enhanced due diligence, often including confirmation of probate or independent legal advice. Bulgarian legal analysis follows the same logic, requiring isolation of inheritance status from mere documentary assertions.
Specific safeguards for off-plan construction and development projects 🏗️
In off-plan sales, prevention depends on verifying whether the developer holds a valid right to build under Article 63(1) of the Ownership Act, and whether promised units correspond to legally existing rights.
This is analogous to:
- checking planning permission and developer title in the UK, and
- verifying development rights and zoning compliance in U.S. practice.
Where promised rights exceed existing legal authority, buyers acquire expectations, not property.
Avoiding payments before legal certainty is established
Deposits and advance payments often mark the point of no return. Once funds are transferred, the buyer is financially committed but still lacks real rights.
Across jurisdictions, solicitors and attorneys consistently advise that:
- no funds should be released
- before legal verification is complete.
Early consultation with a specialised property lawyer or real estate attorney is therefore not a formality, but the most effective fraud-prevention tool ⚖️
How BSLC protects clients in complex real estate fraud cases and restores control over property ⚖️
Legal assistance in real estate fraud cases cannot be reduced to filing a single claim or reacting after damage has already occurred. At BSLC, we approach these matters as complex legal constructions, deliberately built over time and often combining elements of property law, contract law, civil procedure, inheritance law, and construction law. The defining feature of our work is that we do not isolate documents or transactions, but instead reconstruct the entire legal and factual architecture behind the disputed property.
From the outset, our solicitors, attorneys, and trial lawyers treat each case as a strategic matter rather than a routine dispute. Real estate fraud typically affects the right of ownership within the meaning of Article 77 of the Ownership Act, the validity of legal transactions under Article 18 of the Obligations and Contracts Act, and the procedural position of the client under the Civil Procedure Code. For that reason, our role is not merely to litigate, but to regain legal control over the situation before irreversible consequences materialise.
BSLC begins every engagement with a comprehensive legal qualification of the case. This includes determining whether the risk arises from a sham owner, abuse of a power of attorney, simulated possession, inheritance manipulation, off-plan construction fraud, or procedural pressure through arbitration or enforcement. Similar to how UK solicitors deduce title or how US real estate attorneys analyse chain-of-title defects, we identify the precise point at which the legal construction fails and build the strategy around that weakness.
Once the legal nature of the fraud is established, our team designs a coordinated protection strategy, rather than fragmented actions. This usually involves selecting the correct type of claim under the Civil Procedure Code, assessing whether declaratory, constitutive, or condemnatory relief is required, and determining whether interim measures are necessary to preserve the property. In high-risk situations, we act immediately to prevent further disposition, encumbrance, or enforcement, recognising that in real estate fraud cases time is a decisive legal factor.
Our work also extends beyond the courtroom. Effective protection often requires parallel extrajudicial actions, such as notifying notaries, counterparties, financial institutions, or other relevant actors of an ongoing dispute, in order to prevent further circulation of defective rights. This reflects best practices familiar to UK conveyancing solicitors and US attorneys, where early intervention can stop a flawed transaction from cascading into multiple third-party claims.
Where fraud involves forged documents, impersonation, or abuse of representative authority, BSLC coordinates civil protection with procedural mechanisms that support evidence gathering and legal clarity. We do not treat criminal proceedings as a substitute for civil protection, but as a complementary tool that can strengthen the evidentiary position of the client and limit future harmful actions. This integrated approach is particularly important in cases involving false arbitration awards, fictitious debts, or enforcement against чужд property.
In construction and off-plan cases, our role is to separate contractual promises from actual real rights. We analyse whether a valid right to build exists under Article 63 of the Ownership Act, whether the developer’s representations correspond to legally transferable rights, and whether multiple buyers have been exposed to the same object. This mirrors the due diligence expected of construction law barristers in the UK or development counsel in the US, where the absence of a legally enforceable property interest fundamentally alters the client’s position.
What ultimately distinguishes BSLC is the focus on outcome, not form. Our objective is not simply to challenge a document or win a procedural step, but to restore legal certainty, protect ownership, and minimise long-term losses. Real estate fraud is a deeply disruptive experience, but with a structured, early, and professionally coordinated legal strategy, it is not a dead end. It is a legal problem that can be contained, corrected, and resolved with precision, persistence, and expertise ⚖️
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