Types of properties and the meaning of the expression “property use designation”

Usually, a real estate property is understood to mean a residential unit, but in fact the category is much broader. The type of property determines its market value, along with its characteristics such as location, condition, liquidity and profitability. Due to the high value and longevity of this type of investment asset, the state regulates all real estate transactions. The concept of “property status” was introduced with the classification of properties on the map or, more precisely, with the introduction of the cadastre on the territory of Bulgaria. The purpose of a property transaction can be either personal use or investment, which makes the category of real estate much broader, and in some transactions a change of the property status is also required so that it suits the needs of its owner and, above all, complies with the legal provisions.

Change of property use designation or change of status

According to the Spatial Development Act, a “change of use designation” of a site or part of it is the change from one use to another in accordance with the corresponding codes, which constitute basic cadastral data determined under the Cadastre and Property Register Act and the regulations for its implementation.

According to the cadastral registers, each object, depending on its type, is identified by a number of cadastral data such as: identifier (unique number), area, floor/number of floors, address and others. One of the identifying elements of objects is their “designation”, for which each object is assigned a corresponding code. A change of designation means a change in the way the object is used, which may be carried out through conversion and construction and installation works or without construction and installation works. Depending on the presence or absence of construction and installation works, the regime applicable to the specific change of designation is also determined.

Simplified procedure for change of status

Before the amendments to the Spatial Development Act were introduced, every change of a site’s use designation was tied to the need to obtain a new building permit. This in itself marked the beginning of a long and complex procedure, the difficulties of which were reasons for it not to be carried out. With a new provision in force since 2021, namely Article 147a of the Spatial Development Act, a new and simplified way has been provided for changing the designation of buildings or individual units in buildings, for example dwellings, studios, shops, health care offices, offices, beauty salons and other service premises. It is essential to note that the new regime under Article 147a of the Spatial Development Act regulates the change of designation of buildings or individual units in buildings without construction and installation works being carried out. In these cases, the regime provides that the change is made after the issuance of a permit for change of designation by the chief architect of the municipality. This is a completely new permitting regime, in which, instead of a building permit, a permit for change of designation is issued, together with a simplified procedure. The chief architect of the municipality issues the permit without requiring the submission of investment projects, but the application must be accompanied by evidence that the requirements of Article 38 or 39 of the Spatial Development Act have been met, that the building rules and regulations are not violated, and that positive opinions have been submitted by the relevant competent authorities regarding compliance with the requirements set out in a regulatory act for the new designation - meaning opinions confirming compliance with fire safety requirements and sanitary and hygiene requirements. 

In the continuation of this article, you will see the most common changes in property designation in our practice and what documents are required for this.

Change of status from “studio” to “dwelling/apartment” under the simplified procedure (without CMR)

Given the restriction on registering an address in a real estate property designated as a studio, many people undertake the procedure of changing the designation of the studio into a dwelling.

This can also be done under the new and simplified procedure for changing designation under Article 147a of the Spatial Development Act.

The documents that must be submitted to the municipality where the property is located are as follows:

1. 1. Application for issuance of a permit for change of designation of buildings or individual units in buildings without carrying out construction and installation works (Form 3179);
2. 2. Notification of investment proposal for change of designation of buildings or individual units in buildings without carrying out construction and installation works (Form 3179);
3. 3. Document of ownership of the real estate property;
4. 4. Certificate of heirs (when the ownership document is in the name of the applicant’s deceased predecessor) - added ex officio;
5. 5. Current schematic plan of the real estate property;
6. 6. Design visa in the cases of Article 140, paragraph 3 of the Spatial Development Act;
7. 7. Notarised declaration of no CMR;
8. 8. Notification of investment proposal for change of designation (an integral part of the application);
9. 9. EIA decision or decision on the need for an EIA (if required);
10. 10. Notarised consents, decisions of the general meeting of the condominium owners;
11. 11. Coordination under Article 39, paragraph 3 with the relevant minister;
12. 12. Document for commissioning of the construction (certificate of tolerance);
13. 13. Copy of power of attorney (when submitted by an authorised representative) certified as “True to the original”;
14. 14. Other documents (positive opinions from the relevant competent authorities regarding compliance with the requirements set out in a regulatory act for the new designation);
15. 15. Payment slip or payment order for the paid fee;

After confirming that the site meets the required conditions, the chief architect issues a permit for change of designation. The latter is notified to the interested parties, who have the opportunity to appeal it within 14 days of the notification.

Change of status from “office” to “dwelling/apartment” under the simplified procedure (without CMR)

The procedure for changing the status here is not so long and complicated. An application in the prescribed form must be submitted to the chief architect of the municipality, accompanied by the following mandatory documents:

1. 1. Document of ownership;
2. 2. Certificate of heirs (if applicable);
3. 3. Current sketch of the building or the individual unit;
4. 4. Notarised declaration that no construction and/or installation activities will be carried out;
5. 5. Documents proving compliance with the requirements of Article 38 or Article 39 of the Spatial Development Act;
6. 6. Payment slip or payment order for the paid fee.

After reviewing the application and the documents, the chief architect issues the relevant Permit for Change of Use within 7 days, and once again this is notified to the interested parties, who have the opportunity to appeal it within 14 days of the notification.

It is important to know

After a change of designation has been carried out, this change should be reflected in the cadastre, through the permit for change of designation issued by the chief architect of the district where the site is located, as well as in the tax declaration under Article 14 of the Local Taxes and Fees Act for taxation with property tax.