Article 3c of the Agricultural Land Ownership and Use Act (The Act) will no longer be applied – this result was reached after a resolution of the European Court of Justice (The ECJ) deemed the provision as incompatible with the EU law.
Five years after Bulgaria’s accession to the EU, EU citizens and citizens of the European Economic Area (EEA), the companies, registered in Bulgaria, as well as foreign companies from EU or EEA countries have received the right to acquire non-agricultural land in the country. As of 01.01.2014 the restrictions regarding the acquisition of agricultural land were also supposed to be lifted.
However, in 2014 the provision of Art. 3c of the Agricultural Land Ownership and Use Act was adopted, and according to its Para. 1 the right of ownership over agricultural lands can be acquired by natural persons or entities residing or established in Republic of Bulgaria for more than five years. Para. 2 of Art.3 introduces the possibility for legal persons with registration under the Bulgarian legislation for less than five years may acquire the right of ownership over agricultural lands, when the shareholders in the company, the members of the association or the founders of the joint-stock company meet the requirement of Para.1. An exception from the application of Para. 1 is established in the cases where the acquisition of the right of ownership of agricultural land is based on inheritance by law.
With these restrictions that concern both Bulgarian and foreign citizens, it is implied that any natural person or entity, who has not resided or has not been established in Bulgaria for at least the last 5 years, is not entitled to acquire agricultural land by any type of transaction.
In this regard, faced with a pending case, the Burgas Regional Court refers a preliminary ruling to the ECJ, that poses the question of the compatibility of Article 3c of the Agricultural Land Ownership and Use Act with the EU law, pointing out that agricultural land in Bulgaria is in fact under the special protection of the state and the society and that it is necessary to guarantee that the land will be used according to its intended purpose. The main issue, however, is whether it is acceptable to impose such restrictions for the acquisition of land, because this limits the right of establishment and freedom of movement in the EU and places an unacceptable restriction on Bulgarian citizens.
With its Resolution, the ECJ rules that “Article 63 of the Treaty on the Functioning of the European Union shall be interpreted as that it does not allow a legal regulation of a member state, under which the acquisition of ownership rights over agricultural land located in its territory is conditioned by the requirement that the acquirer has resided for more than five years in that member state.”. The ECJ also concludes that the obligation for residence, established in Art. 3c of the Agricultural Land Ownership and Use Act is particularly restrictive and has commented on other possible measures, that Bulgaria could use in order to limit the acquisition of agricultural land for speculative purposes and ensure that it is used according to its intended purpose.
The news above is for information purposes only. It is not a (binding) legal advice. For a thorough understanding of the subjects covered and prior acting on any issue discussed we kindly recommend Readers consult Ilieva, Voutcheva & Co. Law Firm attorneys at law.
