The following article is dedicated to Resolution No 33 as of 30.03.2021 delivered in civil case No 2389/ 2020 of the Supreme Cassation Court (“Resolution”), which provides interpretation regarding the following problem:
Could American citizens acquire ownership over land in the Republic of Bulgaria since there is bilateral agreement on the incentive measures and mutual protection of investments singed between the Republic of Bulgaria and the USA and do its provision represent exception from the restrictions in article 22, para of the Constitution of the Republic of Bulgaria (“Constitution”)?
Article 22 of the Constitution provides that citizens of third states out of the European Union (EU) and the Agreement on the European Economic Area, could acquire land on the territory of the Republic of Bulgaria pursuant to the terms and conditions of an international agreement, ratified, promulgated and into force for the Republic of Bulgaria.
These restrictions are specified in the article 29 of the Property Act (PA). It states that the foreigners and foreign legal entities could acquire ownership over land in the Republic of Bulgaria only under the terms and conditions laid down in an international agreement, ratified in compliance with the procedure under article 22, para 2 of the Constitution, and promulgated with the State Gazette. The restrictions do not apply to acquisitions of right to use, right to build, servitudes and succession of rights in rem.
The Republic of Bulgaria and the USA have signed an agreement on the incentive measures and mutual protection of investments, ratified by the National Assembly and promulgated in the State Gazette.
Having considered the applicable law described above and the Agreement, the SCC stresses that the conclusion whether American citizens could acquire land shall be based not only on the existence of a bilateral agreement between the Republic of Bulgaria and any third state. The judges shall also consider the terms of such an agreement.
P. 3 of the Enclosure to the Agreement states that the Republic of Bulgaria could pose restrictions to American citizens on matters related to immovable properties. Article 22 of the Constitution and article 29 of the PA represent such restrictions. However, this is not sufficient to apply them to American citizens. The Agreement provides for a specific notification procedure upon which the restrictions could apply. The relevant court practice does not provide for a certain answer whether the Republic of Bulgaria has informed the respective authorities in the USA for the restrictions on acquisition of lands.
In case, the Republic of Bulgaria has notified the USA for the restrictions, American citizens could not acquire land on its territories.
If the respective authorities in the USA have not been notified, the restrictions on ownership of land could not apply to American citizens if the acquisition is connected to an investment within the meaning of article I of the Agreement.