Construction Law

The term “construction law” covers in Bulgaria all legal areas relating to the construction, alternation and removal of buildings. A distinction is made between private construction and public construction law. Public construction law determines the admissibility of construction projects taking into account the interest of neighbors and general public interest. Private construction law regulates the legal relationships between builders, buildings contractors, architects, etc.

According to the Bulgarian construction law the construction contract is the basis of the most building relationships. This is a contractual agreement under the law of obligations concluded between the building contractor (principal) and the building contractor (contractor, agent). The general rules of the Bulgarian obligations and contracts act (ZZD) apply to the conclusion of these contracts. Like any other contract the construction contract is concluded after the delivery of two corresponding declarations of intent - offer and acceptance. The building contractor (agent) agrees to perform certain construction services (construction of an office building, fitout, reconstruction of existing buildings, etc.) and in return he has the right to receive a payment from the client. Object of the contract can be construction services of different kinds and sizes (outbuilding or residential building construction, total building site or only specific parts or phases of construction or reconstruction). The carry out of the construction work may take a long time, so it is highly recommendable to stipulate affirmative mechanisms that allow for the proper performance of the contract and protect the interests of both parties under changing economic conditions. The construction contract is formal - Article 160 (2) and Article 163 (1) of the Act on spatial planning require that the contract be concluded in writing.

The investment activity has to be conducted in accordance with the applicable laws, plans of various ranks and institutions, as well as many specific requirements. The principle for the contractual freedom applies to the construction contracts as well; however , some restrictions are envisaged in the Act on spatial planning (SPA). It lays the basic rules and regulations for the disposition of the buildings (Section IV). The beginning and the realization of the construction is to be carried out in accordance with the approved investment projects, detailed building plans and under the conditions specified in SPA. Article 139 (1) and paragraph (2) defines the three phases of the project planning:

  • Conception;
  • technical project;
  • detailed disign and documentation;

All parts must be signed by the person, who has issued the assessment of compliance, by the principle and a competent design engineer. Article 140 of the SPA stipulates that prior to the project start a project plan has to be issued. It is to be issued by an architect of the municipality within a period of 14 days from the submission of the application and must be coordinated with the chief architect of the municipality.

The competent authorities for granting planning permission are the chief architects of the municipality. The prerequisites for the granting of planning permission can be found in Articles 146 of SPA.

The contractual autonomy here is further limited by the Act on public procurement.

The works specification is of critical importance for each construction project. Basically, any work/service concerning the manufactoring, alternation and removal of a structural facility can be listed in the works specification and thus be part of the contract’s object. The nature and the scope of it depend on the respective construction contract.

In addition to the obligation to pay the wages, the building contractor has to meet the primary requirements of the principal (client) in order to get his acceptance of the construction work. The acceptance of the construction work is recognition on the part of the client that the work services reconcile with the contractual agreement. The recognition can be given in different ways, for example through inspection of the construction site, through silence and deadline expiration or completion certificate issued by an expert.

However, in case of significant construction defects the principal is entitled to refusal of acceptance (even partially) and can demand subsequent improvements. The warranty rights are governed in general by the rules of the Act on obligations and contracts are supplemented by some special rules for buildings.

With the acceptance of the construction the contractor’s remuneration becomes due and payable and the state of limitations for claims to compensation starts to run.

In addition, the parties have secondary obligations, such as the duty of the client to cooperate, the duty to ensure a suitable building plot and to undertake all necessary steps to acquire the required building permitions and other necessary regulatory approvals. The building contractor shall follow the instructions of the client and perform the construction work with due diligence, etc.

We are your lawyers’ team for matters concerning construction law in Bulgaria. Our services in the field of construction law in Bulgaria include:

  • Architectural and engineering law
  • Preparation and review of contracts
  • Project development, real estate financing
  • Conflict management
  • Costs Review
  • abatement of a nuisance in the construction process
  • Protection and enforcement of rights (even in bankruptcy cases)
  • Payments, contract performance guarantee and collateral
  • Public procurement law
  • Public Private Partnership
  • Public building law,
  • Environmental Law
  • Neighbouring rights law
  • Labor law
  • Tenancy and Housing law
  • Arbitration