Notarising and registering a lease agreement

A written lease is valid without a notary: the Obligations and Contracts Act sets no form requirement for it. Notarised signatures do something else. They turn the contract into a document on which the court issues an order for immediate enforcement of unpaid rent, without a case being heard first. Entering the lease in the property register is a separate step, and it matters mostly to the next owner of the property.

What do notarised signatures change if the tenant stops paying?

Notarised signatures give the landlord a direct route to enforcement. Art. 417, item 3 of the Civil Procedure Code lists, among the grounds for an order for payment, a contract with notarised signatures as regards the obligations to pay sums of money contained in it. Under Art. 418 the court checks whether the document is regular on its face and whether it certifies an enforceable claim, and then orders immediate enforcement and issues the writ.

Without notarisation the landlord takes the ordinary route under Art. 410. There the tenant can object in writing within one month, without explaining why, and the landlord then has to bring a claim and prove the debt. Collection starts only once that dispute is over.

With immediate enforcement things happen in the opposite order. The tenant's objection does not stay enforcement unless he provides proper security, and the court can stay it only on a request supported by convincing written evidence. So the money starts moving while the dispute is still running, not after it.

The fast route, though, covers only the sum the document itself proves. If you raised the rent over the phone, or the tenant has been paying less for a year by spoken agreement, the notarised contract no longer describes today's debt and the application starts from an old figure. Before you count on this route, check the amount and the due date in the contract against what the tenant is actually paying.

Notarisation shortens the route, but it does not take away the tenant's right to argue. He can object and the case can go on while enforcement runs. Ask a lawyer what exactly the court will want for your particular claim.

Do notarised signatures help you get the property back?

For the money, notarisation is a reliable fast route. For the flat itself it is not. Art. 417, item 3 also speaks of obligations to hand over specified things, but whether the return of immovable property falls within them is disputed, and the courts do not treat it uniformly. If that is what you are counting on, go through your case with a lawyer before you sign.

A belief turns up often in forums that a notarised contract lets a tenant be removed without a court. There is no such thing. Changing the lock, cutting off the electricity and water and carrying the tenant's belongings out amount to the offence of self-help under Art. 323 of the Criminal Code where the tenant disputes your right, and they leave the landlord worse off than before.

So plan the end of the tenancy as if it will go to court. A fixed term with an end date, a notice clause with a specific number of days, and a report at move-in and at move-out do more work here than the notary. See how to run the move-in inspection report and what the timelines are for ending a rental agreement.

When is it worth notarising the lease?

Notarisation is worth the fee when the rent is income you rely on, when the term is a year or more, and when the tenant is a complete stranger. For a short let to someone you know, a well written contract is usually enough.

Each of those three conditions makes slow collection more expensive. If you live on the rent, two or three months without payment cost you more than the notary's fee. A longer term also leaves more time for the tenant's circumstances to change. And when you found the tenant through a listing, there is no mutual acquaintance to step in before the dispute reaches a court.

The fee follows the tariff of notary fees. For certifying the date and the signatures on a contract with a determinable material interest, the charge is 30 per cent of the base fee, and that base fee rises with the interest, so the amount depends on the rent and the term. Ask the notary in advance what it will come to.

The cost is not only in money. Both sides have to appear in person or through a representative, and at signing the tenant learns that you have thought about non-payment. Present notarisation as something you do for every contract rather than as a judgement about this tenant, and the tension almost disappears on its own.

A tenant's refusal to notarise is information too. On its own it is not a reason to walk away from the person. But if the same tenant will not pay a deposit either, or sign a handover report, stop and think before you sign the contract.

What does "registering" a lease mean?

Three different things hide behind the word "registration": entry in the property register, which matters to the next owner of the property; the tax side with the revenue agency; and registering the home for short-term letting with the municipality. Only the first changes anyone's legal position in relation to the property.

The entry is made at the registry office in whose district the property lies. After it, anyone checking the property before buying it, or before lending against it, sees the lease.

The contract itself is not filed with the revenue agency. A landlord who is a private person owes advance tax during the year and files an annual tax return, and when the tenant is a company, the tenant withholds the tax. Go through the deadlines and the forms with an accountant, not with a notary.

Short-term letting follows the Tourism Act. The home is registered as an accommodation site with the mayor of the municipality, and after that in the national tourism information system. That is a separate regime and has nothing to do with a long-term lease.

When should you enter the lease in the property register?

Leases with a term longer than one year are subject to entry. The question becomes important if the property might be sold or mortgaged while the tenancy runs.

Art. 237 of the Obligations and Contracts Act sets out three cases. Where the lease is entered, the buyer of the property steps into it and has to live with it until the end of its term. Where it is not entered but has a certified date, the buyer has to honour it up to its term, but for no more than a year after the transfer. And where the contract has no certified date and the tenant is in possession, it binds the buyer as an open-ended lease. Notarisation gives the contract a certified date from the day it is done, so on its own it already does part of the work.

Entry protects the tenant above all. That is why a company renting a flat for its staff, or a family tying itself down for several years, may ask for the lease to be entered. For the landlord the consequence shows up at a sale: the buyer sees the entered lease and takes it on along with the property, and a buyer who wants to move in will price that in.

Settle this before signing, not when a buyer appears. Either the term stays within one year, or you enter the lease and offer the home to a buyer who is looking for rental income that is already in place.

Only documents executed before a notary or bearing notarised signatures can be entered, so notarisation is a precondition for entry. The state fee is 0.1 per cent of the material interest under the contract. If you are going to enter the lease, plan both steps together and go to a notary once.

What should the contract contain before you notarise it?

The notary certifies the signatures, not the content. So notarisation works only as far as the contract is exact: what gets collected under it is the sum written in it, on the due date written in it.

Check six things in the final text:

• Rent. A single amount in EUR, with utilities and building fees stated separately. With "rent plus expenses" and no figure for the expenses, there is nothing for the application to add up.
• Due date. A specific day of the month. "At the beginning of the month" leaves room to argue about when a payment was late.
• How the rent is paid. A named bank account. If you take cash, issue a receipt for every payment, or later you will have nothing to prove which month was paid.
• Term and notice. An end date, the number of days of notice and the form in which notice is given.
• Deposit. The amount, what it can be deducted for, and how long after handover it is returned.
• Changes to the rent. Only by signed annex.

That last point holds up all the others. The fast route rests on the obligation written into the document that bears the notarised signatures, so an annex raising or lowering the rent has to go through a notary just as the contract did. Otherwise notarisation preserves the old amount and the new one is left without it.

The full list of clauses a contract needs whether or not it is notarised is in the guide to the rental agreement, and the clause-by-clause walkthrough shows how each one is worded.

How does the notarisation appointment work?

Certifying signatures is a short procedure. The parties appear in person before the notary and either sign the document there or confirm signatures already placed on it. The notary certifies who signed and on what date, not what you agreed.

You can have the signatures certified by any notary in the country, wherever the property is. The entry in the register, though, is made only at the registry office for the location of the property, so for a property further away, arrange the two steps separately.

The appointment itself takes five steps:

1. Agree the final text in writing, and who covers the notary's fee.
2. Book a time with a notary and ask how many copies to bring.
3. Print the copies and take them unsigned, if you would rather sign in front of the notary.
4. Turn up with valid photo identification and sign.
5. Collect the certified copies and pay the fee.

The commonest hold-up is a property with several owners. The decision to let it is taken by the co-owners holding more than half of the property, but everyone who signs the contract as landlord has to appear in person or send a representative with a power of attorney. One owner abroad without one is enough to postpone the appointment. Ask the notary what form the power of attorney needs, back when you book the time.

Which records should you keep after notarisation?

A notarised contract will only serve you if the records around it are complete. The document the claim rests on goes with the enforcement application, and the debt itself is proved by what you have been recording month by month.

Six things deserve a place of their own:

• The notarised original. Keep it on paper and scan it the day it is signed. A lost original makes the trip to the notary pointless.
• Annexes. Numbered, dated, notarised like the contract and filed with it.
• Payment history. For every month, the amount due, the amount paid, the date and the method, checked against your bank statements.
• Notices. Reminders and notices in writing, with proof of receipt, a recorded letter with a return slip for example. A phone call cannot be proved afterwards.
• Handover reports. At move-in and at move-out, with the furniture inventory and the meter readings.
• The entry number. If you entered the lease in the register, write it down with the date.

Keep these records as things happen, not once a dispute starts. A payment history reconstructed six months later from memory and the banking app weighs less than one filled in every month.

Smarter Facility is a rental property management platform in Bulgaria. The owner manages the property themselves or hands it to a partner agency, and sees the rents, the contracts, the repairs and the documents in one place. Lease agreement management drafts the contract from a template, stores it securely in the cloud and tracks the start and end dates, and reminds you before the term runs out.

This article is general information, not individual legal or tax advice. For a particular contract or situation, consult a lawyer or an accountant.