Maintenance & Care Agreement for Property in Bulgaria — Risks & Protection

What you will learn in this article

• What a maintenance and care agreement is and its legal nature
• The mandatory notarial deed form for conclusion
• The acquirer’s obligations (the party receiving the property)
• Risks for the transferor (typically an elderly person)
• Risks for the acquirer
• When and how the contract can be cancelled by court
• Inheritance implications
• Available alternatives (will, donation, annuities)

What is a maintenance and care agreement?

This contract belongs to the category of innominate contracts — it is not expressly regulated in the OCA but is permissible under the freedom of contract principle (Art. 9 OCA). The Supreme Court of Cassation (SCC) has consistently held that such contracts are valid.

Legal characteristics

• Bilateral — creates rights and obligations for both parties
• Onerous — each party receives consideration (property for care)
• Formal — requires a notarial deed (Art. 18 OCA)
• Aleatory — neither the scope nor the duration of maintenance and care is determinable in advance, as it depends on the transferor’s lifespan

Why is this agreement used?

It is one of the most commonly used methods for property transfer between relatives in Bulgaria:

• Harder to contest than a donation — since the transaction is onerous, heirs with a reserved share cannot challenge it through a claim for reduction (Art. 30 Inheritance Act)
• Provides care — unlike sale or donation, the transferor receives a tangible counter-performance: daily care
• Tax advantages in some cases compared to donation

Form and conclusion (notarial deed)

Mandatory form

Under Art. 18 OCA, contracts for transferring ownership of immovable property must be executed as a notarial deed. This is a validity requirement — without a notarial deed, the contract is null and void.

Procedure

1. Document preparation — cadastral sketch, tax assessment, encumbrance certificate, title deed, identity documents.
2. Execution before a notary — the notary verifies identity, legal capacity, and the parties’ intent, reads the deed aloud, and the parties sign.
3. Registration at the Registration Service — required for enforceability against third parties.
4. Payment of fees — notary fee, registration fee, municipal property transfer tax.

Transfer of ownership

Ownership passes at the moment of executing the deed before the notary (upon signing). From that moment, the acquirer is the full legal owner and may dispose of the property.

This is precisely why it is critically important for the transferor to retain a lifelong right of use (a real right recorded in the notarial deed and at the Registration Service).

Acquirer’s obligations

Maintenance

The monetary obligation — providing food, clothing, heating, utility costs, medication, and other necessary living expenses. Maintenance is substitutable — it can be fulfilled through monetary payments.

Care

Personal care — ensuring hygiene, accompanying to medical appointments, cooking, cleaning, social contact, and emotional support. Care is in principle substitutable — it can be performed by third parties (the acquirer’s family members), unless the contract expressly stipulates otherwise.

Scope

If the contract does not specify the scope of care, case law holds that all necessary maintenance and all necessary care are owed. It is irrelevant whether the transferor can support themselves from their own income.

Recommendation: Specify in the contract what care will be provided, by whom, how, and where.

Risks for the transferor (elderly person)

1. Loss of ownership — ownership passes immediately upon execution. If the acquirer sells the property to a third party, the transferor loses their home. A lifelong right of use is essential.
2. Non-performance — the acquirer may cease providing care. The transferor must then file a court action for cancellation, which takes years.
3. Acquirer’s death — if the acquirer dies before the transferor, the care obligation passes to heirs, who may lack the willingness or ability to perform.
4. Placement in a care facility — if the acquirer places the transferor in a hospice, the contract may be cancelled because the care obligation is not fulfilled.
5. Property sale by acquirer — the acquirer may sell. Only a registered lifelong right of use protects the transferor.

Risks for the acquirer

1. Extended care period — the acquirer cannot predict the duration. Total care costs may significantly exceed the property value.
2. Court cancellation — if the transferor (or their heirs) successfully sues for cancellation, the acquirer loses the property with no compensation for care already provided.
3. Conflicts with heirs — heirs may contest the contract, claiming non-performance. Proving proper care in court is difficult without documentary evidence.
4. Restrictions on use — if a lifelong right of use is retained, the acquirer cannot effectively use the property.
5. Inability to perform — if the acquirer temporarily cannot fulfil obligations, they must immediately request court transformation into a monetary equivalent.

Cancellation of the contract (Art. 87 OCA)

Grounds

The contract may be cancelled due to non-performance by the acquirer: lack of care, incomplete performance, poor-quality maintenance, placement of the transferor in a care facility, failure to provide personal care.

Court procedure (Art. 87(3) OCA)

Since the contract concerns immovable property, cancellation may occur only by court proceedings (Art. 87(3) OCA). Out-of-court cancellation by unilateral declaration is not permissible.

Limitation period

The right to request cancellation expires after 5 years (Art. 87(5) OCA), running from the date the non-performance occurred.

Retroactive effect

Cancellation has retroactive effect. The property reverts to the transferor, the acquirer loses ownership, and the parties must restore what they received.

Cancellation by heirs

After the transferor’s death, the right to cancel is inherited. Heirs may cancel the contract regarding their inherited share (partial cancellation) or entirely (if the heir is sole). The limitation period for heirs runs from the date of death of the transferor.

Inheritance implications

Harder to contest than a donation

The maintenance and care agreement is an onerous transaction. Therefore, heirs with a reserved share cannot challenge it through a claim for restoration of the reserved share under Art. 30 of the Inheritance Act. The only path is a claim for cancellation due to non-performance (Art. 87 OCA).

Property acquired during marriage

Property acquired during marriage through a maintenance and care agreement becomes marital community property. Both spouses become owners, even if only one is a party to the contract.

Nullity when death is imminent

If at the time of conclusion the acquirer knows about the transferor’s imminent and unavoidable death, the contract is null and void due to lack of aleatory character. Exception: if the contract is concluded for care already provided (commutative character), it is valid despite knowledge of impending death.

Alternatives

Will

The transferor retains ownership during their lifetime and designates a beneficiary by will. Advantage: full control while alive. Disadvantage: contestable by heirs with a reserved share; does not provide care during lifetime.

Donation

Gratuitous transfer of property. Advantage: simplicity. Disadvantage: heirs may seek reduction under Art. 30 IA; donor loses ownership without counter-performance.

Annuity contract

Property transfer in exchange for periodic monetary payments. Advantage: clearly defined and measurable performance. Disadvantage: does not provide personal care.

Sale with conditions

Sale of property to a relative at market or favourable price. Advantage: clear, hard-to-contest transaction. Disadvantage: does not provide care.

Donation with lifelong right of use

Donation with express retention of a lifelong right of use. Advantage: transferor retains the right to live in the property. Disadvantage: does not provide care; contestable by heirs.

Frequently asked questions