Our comments on the Iva and Co’s management contract

As promised, this is our second newsletter of a series of 3 on Iva and Co. proposals.

Please see at the end of this email our solicitor’s comments on this management contract.

We strongly ask you to take the time to read all of this email.

Before we go into the nitty-gritty of details, we want to highlight some points.

• We ask all property owners to educate themselves about the management contract, as it is this is your investment, and not SRIOC or Iva and Co.
• This is a lifetime contract that is passed onto your next of kin or new owners. As you will see from the sections below, there is no way out of this contract.
• This is a 22-page contract that is all in favour of this management company SR—PROPERTY MANAGEMENT” Ltd. Remember, we all came out of these slave contracts years ago and our complex became a part of the Condominium Act, which governs complexes like ours unless 75% of owners agree by an AGM to change this.
• We would be giving up several things if we agreed to this. There would be no option for online voting, no monthly accounts, and no more Annual General Meetings to express our opinions. We would also lose the right to legally challenge their decisions. This company can increase maintenance fees without a vote, overspend, and demand payment without seeking our consent.

• Owners should share this crucial information with their fellow owners, as many are being sold the dream of opening the resort at any cost. However, the reality is that this dream will soon turn into a nightmare for all owners. It’s important to educate your fellow owners about this. If you have met someone on holiday who owns an apartment, please contact them and share this message. If Iva and Co reach 75%, it will be game over.

• Below are some of the points we would like to highlight from the management contract. These sections have been screenshots from the actual contract. We want to make this clear: The SRIOC has changed none of this text.

Our comments on the management contracts

What the different text means.

CONTRACTOR: IS THE IVA AND CO.( SR—PROPERTY MANAGEMENT” Ltd)

PRINCIPAL: IS APARTMENT OWNERS

As part of this contract, SR—PROPERTY MANAGEMENT” Ltd (Iva and Co) has decided that their company will charge owners 2 euros per square metre from all MM fees, which will result in a total of 160,600 euros per year for Phase 1 for their company. PLEASE NOTE THAT THIS DOES NOT INCLUDE FAMILY AS WE DO NOT HAVE THEIR SQM INFORMATION TO WORK IT OUT, BUT WE CAN EASILY SAY THAT IT WOULD BE OVER 200,000 EUROS. NICE WORK IF YOU CAN GET IT.

This means that owners wishing to stay from November to March will need to pay an additional charge on top of the daily rate for power and water. (See rates above)

As you can see this contract has the right to increase the MM fees as they feel fit without any discussion or vote. As there will be no more input for owners just a dictatorship.

If the management decides to carry out any work in the resort, they have complete authority to do so. The only way to stop them is if over 50% of owners write to them. There is no requirement for a vote anymore, as the right has been given away in the absence of an AGM. This means that the management has a dictatorial power. If you cannot get in touch with your fellow owners as you do not have their contact details, which Iva and Co. have, and we would like to know where they received them from (GDPR) you won’t be able to object to this. This also means that they have the right to come after you for further payment without any discussion. (Remember the roof charges)

ART 51 will be discontinued by signing this contract

They decide when and what services, activities, and delivery of services to the common areas you will have no say. This is beyond a slave contract.

There is a special clause for Boyan. This is nepotism at its best again, with one rule for Boyan and another for us. Transparent and fair, not a chance with this contract.

Just so we are clear, Iva and Co if Boyan does not pay for his MM fees for more than 7 months and then pays a third of his fees, he will keep his utilities on? However, if we don’t pay 100% of our fees, we will get ours turned off, and we will have to pay penalties of 0.01% per day up to 30% of our fees plus 50 euros for each violation. Seriously, have you lost your mind.

In Black and White Art 44. This contract is concluded for INDEFINITE PERIOD.

Again, the only way out is by getting more than 50% of owners to send a written statement to the contractor whereby such owners claim non-performance of the obligations on the part of the contractor. This can only be done by owners who have no outstanding debts.

As you can see from the above, the only way of getting out of this slave contract is by selling, but only when the new owners sign this contract. So if they don’t, no sale. Who in God’s name and who has half a decent solicitor would advise them to sign this slave contract? This means you will not be able to sell unless Elite Homes Iva and Petya sell it for you, as we know they are great at twisting the truth. As we know, they admitted that they were jumping fences showing apartments and selling them to buyers, saying the resort would be open. This is why Iva, Petya and Co. and those new owners want the resort open at any cost. The SRIOC does understand their disappointment and frustration, but they should have done their own due diligence

Even if 50% of the parties involved wish to cancel a contract with a company, they still have the right to negotiate with a new contractor to perform the activities outlined in the original contract. Therefore, it’s not possible to simply get rid of the previous company; rather, a new company will be setup to take their place. This is a lesson that was learned from Boyan. They won’t give up the cash cow which they will create on the backs of the owners.

Agree to the rules and regulations.

What rules and regulations? We have not seen these so how can we agree with them?

We can’t wait to see them. If your MM contract is anything to go by, we might as well book ourselves into a Bulgarian prison, as it looks like a better option than staying in Sunset if this MM contract comes in.

It is none of their business if you are selling your apartment, but it will become their business if you sign this contract.

So, if an owner dies and wills his apartment to his family, they are tied to this contract, and it will be passed to the next generation.

All owners need to think very long and hard about what they are signing. If you want to open our beautiful resort, use your head and not your heart.

Let’s open the resort for owners and not for people who want to make money on our hardship.

Please read below our solicitor’s thoughts, and thank you for taking the time to read our newsletter.

Subject: Important Update on Sunset Resort Management Contract

Dear Sunset Resort Owners,

I hope this message finds you well. We need to talk about something important—the new management proposal for Sunset. It’s a bit complex, but I’ll break it down into simple terms so we all understand what’s going on. This concerns only whether the proposed contract by Iva and Petya is legal.

What’s the Problem?

The Bulgarian law has special rules for contracts like the one for managing Sunset Resort. These rules are in place to make sure everything is fair. Here’s where things get tricky:

• The contract talks about a new company managing our resort. But there’s a catch – this company isn’t officially recognized yet. It’s like they’ve put the cart before the horse, planning to use a company that doesn’t exist in the records.

• There’s a section in the contract (paragraph 2, to be precise) that tries to skip over a crucial legal step. Normally, for such a contract to be valid, it must be signed directly with the resort’s investor, Boyan’s Corporation, which has built the resort and officially registered. This step is there to protect us by making sure the contract is official and can be enforced.

What Does the Law Say?

• The Burgas court has stated that for places like ours, any contract managing common areas needs to be done right – written down, with signatures that are verified (notarized), and registered. This makes sure that all of us, the owners, are on equal footing and that future owners are also bound by the agreement. As all owners have to be involved those contracts are signed when purchasing the apartment.

• The Supreme Court backs this up. They say that without a formal group managing the condominium, it’s up to us, the owners, to make decisions collectively. No single owner or outside party can decide on behalf of all without going through the proper steps.

Choosing a Management Company: The Right Way

If we decide to bring in a management company, there are clear rules:

• Majority Rule: More than half of us need to agree on it. All owners not just the people in the room at the AGM. That is why it is so crucial to make this right with online voting.

• Professional Management: They must be properly licensed, showing they know their stuff.

• Outsourcing: We can hire outside help for certain tasks, but it needs to be a group decision following the same rules.

The Bottom Line

Trying to make a deal with a not-yet-official company and skipping necessary legal steps doesn’t fit wekk. It means the contract can’t do what it’s supposed to, making it null and void.

What’s Next?

It’s crucial we all understand these points. Our collective decision-making is not just our right but our responsibility. Let’s ensure any action we take is in line with the law and fair to all owners.

Stay Informed, Stay Involved

Legal Analysis of the legality of the Contract: Legality Concerns

Too long did not read:

Concluding Thoughts: The Infeasibility of Circumventing General Assembly Procedures

Given these considerations, it becomes clear that the contract’s attempt to establish a bilateral agreement between a private corporation and an individual property owner falls short of legal standards. This discrepancy results in the contract’s objective being unachievable, leading to its nullification.

Initial Observations on the Contract’s Legality

The contract in question seems to involve an illegal object that makes it null and void.

According to the condominium law, which is applicable to the Sunset Resort just as it is to any other complex, there is a stipulated procedure for management contracts. This law allows for the signing of management contracts exclusively with the investor of Sunset Resort, and these contracts must bear authenticated signatures. Normally those contracts are signed with all the owners in order to be obligatory.

Problematic Aspects of the Contracting Party

Within the framework of the proposed contract, there’s mention of a company that, as of yet, does not appear in the trade register. This suggests the possibility of a company being created specifically to fulfill this contract’s requirements.

This brings us to paragraph 2 of the contract, which seems designed to circumvent the legal obligation of entering into a contract directly with the investor. Moreover, it’s crucial to note that the law mandates not just the direct signing of the contract with the investor but also requires these signatures to be authenticated and registered with the State Inscription Agency, underscoring the contract’s formal and binding nature.

Legal Perspectives from the Burgas Court

According to the Burgas court, the law permits the management of common areas within gated residential complexes through contractual agreement, diverging from the standard protocols set out in the Condominium Law. Such contracts must be drafted in writing and include notarized signatures to uphold their validity. This is a safeguard ensuring all owners within a building are treated equitably. It’s also important for these management and maintenance contracts to be registered, thereby making them binding on future property purchasers.

It should also be noted that a management and maintenance contract should be entered into by each owner with the investor in order to put all owner-occupied units in the building on equal footing. That is why the contract under Article 2 of the Condominium law is concluded with the transfer of ownership, since only then can an agreement be reached with each of the purchasers of independent objects in exactly the same sense. The intended registration of the contract is in the interest of third parties, since it has the effect of binding subsequent purchasers of the property. Decision No. 206 of 26.02.2024 of the General Court – Burgas in case No. 1942/2023.

(Referencing Decision No. 206, dated 26.02.2024, from the General Court of Burgas in case No. 1942/2023).

High Court’s Position on Illegality

The practice of the Supreme Court of Cassation (SCC), as illustrated in Decision No. 80 dated 4.11.2021 (case No. 1213/2020), supports the interpretation that in the absence of a formal management association, it falls to the general assembly of condominium owners to manage, through their decisions. The law details a specific procedure for the making of these decisions, emphasizing a regulatory framework for their convening, composition, representation, voting, and jurisdiction. This underscores the inadmissibility of bypassing this procedure through bilateral contracts between a co-owner and a third party.

Requirements for Electing a Management Company

If the decision is made to select a managing company, it must meet the prerequisites laid out in the law, notably in Art. 17, para 7, which speaks to the election of the condominium’s board of directors (or manager) and the potential delegation of these duties to a professional management firm. This approach mandates

Majority: The law requires a majority rule of 50% of all owners, not the owners in the room.

possibility of outsourcing certain management responsibilities to external entities.

Quality: the law requires a licensed professional manager if it is not an owner in the complex

Additional option: possibility of outsourcing certain management responsibilities to external entities.

Concluding Thoughts: The Infeasibility of Circumventing General Assembly Procedures

Given these considerations, it becomes clear that the contract’s attempt to establish a bilateral agreement between a private corporation and an individual property owner falls short of legal standards. This discrepancy results in the contract’s objective being unachievable, leading to its nullification.