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Validity of sale agreement, by which the Municipality disposes in favour of third parties with property, acquired gratuitously from the state as per provisions of art. 54, para. 1 SPA.

Mrs. Snezhanka Baldzhieva, attorney-at-lawy, elaborates on the arguable and ambiguous wording of the Art. 54, para. 3 of the State Property Act (SPA). It currently provides, in sentence one, an absolute prohibition for donation of properties, gratuitously acquired by the municipality in accordance with the rule of art. 54, para. 1 SPA.

Regarding the remunerative disposition transactions with such properties it is provided, in sentence two of the provision, a mandatory condition which must be present in order for the expropriation transaction to be valid, namely that those properties should be transferred for the purpose of realizing objects necessary for the permanent satisfaction of public needs of local significance. Therefore, the legislator places emphasis on the purpose of disposing of property acquired under Art. 54, para. 1 SPA, when it concerns a remunerative disposition transaction, and not on the variant of this transaction. In this sense, any exchange and contribution (explicitly specified in the provision), as well as any sale or establishment of a limited real right to build (although not explicitly mentioned but aimed at achieving the goal pursued by the legislator – “realization of objects necessary for permanent satisfaction of public needs of local importance”) will be valid and the consequence provided for in Art. 54, para. 4 SPA – nullity.