Money laundering procedures in the off-plan property purchases

Money laundering procedures in the off-plan property purchases – this used to be a common process in the Bulgarian off-plan property purchases in the period 2004-2010, where there have been involved three parties: 1) a trustful overseas buyer (investor), who has been misled to sing a private purchase contract (called “preliminary contract”) not directly with the seller/developer, but with another party, or obliged with the contract to pay towards a third party in overseas bank account; 2) overseas property broker, who “guarantees” for the developer, collects the installments of the buyer, issues poor receipts with no legal force or no receipts at all, and pretends to the buyer to have forwarded all the installments to the figure of 3) the developer (usually an empty local company), who builds the project with limited funds only; very often sets mortgages in favor of banks, etc. The whole reason of this money laundering procedure is to hide the tracks of the money – first of all, the agent does not have legal connection with the developer, and secondly, there is never evidence that the buyer’s investment has been actually forwarded to the developer. At the end of the day, once the fresh cash ends, both the real estate agent and the developer disappear, leaving an empty company with limited or burdened assets, a mortgaged and non-finished complex on one hand, and a robbed buyer, on the other. Due to this practice it is advisable to consult with an independent and experienced property lawyer in advance before you make an off-plan property investment in Bulgaria, so you won’t face a problematic property purchase.

Read more about problematic real estate purchases in Bulgaria –

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