A management mechanism is not bureaucracy done after handover. It is part of the product, and it is signed at the same table.
Guy came back to me after almost two years of quiet. “I need to talk to you about the project in Bulgaria.”
I knew the project. 52 units in a gated complex not far from Sofia: a gate with a guard, a pool, a garden, an underground parking garage. Guy built well and delivered on time. The buyers were Israelis, local Bulgarians and a few Brits.
Guy also had a Bulgarian management company, wholly owned by him, set up especially to operate the complex. That is legal and it is common. The developer knows the systems, and in the first years there is no one who can really replace him. His problem was not who manages, but how the management was legally tied to the apartments.
Every sale contract had a line: the buyer joins the project's management company and pays monthly management fees. An ordinary signature inside the contract. Guy saw this as tying up a loose end.
What needed to happen was something else, and short.
In Bulgaria a gated complex is governed by a special arrangement in the law. The management of its common property is regulated by a separate management agreement between the developer and the unit owners, with signatures authenticated by a notary, and the developer is the one who is supposed to register the agreement in the Bulgarian property registry, in the file of each unit. Only this registration makes it valid against anyone who buys the unit afterward.
In practice that means two more pages at the same table, on the same day the deed of sale is signed, and a registration fee. That's all. Guy did not do it for a single unit.
What he held, therefore, was a personal undertaking of each buyer toward his company. Not a mechanism that attaches to the property.
In the first year it wasn't felt. The management company operated, most buyers paid, the pool worked, the guard sat at the gate.
Then units started to be sold on.
The second buyer of a unit, asked to pay management fees, asked a simple question: “Where does it say that on my apartment?” It wasn't impudence. The answer was: nowhere. He bought a unit as recorded in the land registry, and the registry showed no obligation at all.
Within a year the collection rate dropped below fifty percent. The guard was let go. The gardening stopped. The pool was closed in the second summer. The owners who paid began writing to Guy in fury, because in their eyes he was the seller who had promised a gated complex with a pool. And Guy was left with 6 unsold units, meaning he was both an owner in a deteriorating project and the only one with deep pockets.
Then something happened that Guy could not have foreseen. In November 2025 the Bulgarian Supreme Court opened a precedent-setting proceeding, interpretative case 5/2025, on the question of whether such personal management and maintenance agreements are valid at all, or void because they circumvent the Condominium Act. Case law until then had been contradictory. Since then, courts can stay pending collection cases until a ruling.
That is, even against the original buyers, the ones who did sign, the tool in Guy's hands became shaky.
We sat on it for three weeks.
The first thing I had to tell him is that there is no way back. The special agreement is signed between the developer and the buyers, and once the units have been sold, and later sold on, there is no one to sign it with. In theory you could have 52 current owners sign before a notary. In the field that doesn't happen, certainly not when half of them are out of the country and many are angry.
So we went down a road that Bulgarian case law explicitly recognizes: when the special agreement was not concluded, the ordinary regime of the condominium applies in its place.
We convened a founding general meeting for each of the buildings in the complex, chose a form of management and management bodies, and registered them in the public register the municipality is obliged to maintain. Afterward we approved at the meeting an annual budget and monthly management fees by share in the common property, and not by number of apartments, because that is what the law requires there.
Then came the step that brought Guy's management company back, this time through the right door. Since the end of 2024 a general meeting can, by a majority of over 50% of the shares in the common property, transfer management powers to a “professional manager”: a company listed in a dedicated register. Guy's management company was registered there, and the meeting chose it. The same company, the same service, the same price, but by virtue of a decision of the owners and not by virtue of a clause in an old sale contract.
And that is what made it enforceable: a duly adopted decision of a general meeting is a basis for a fast collection proceeding in the Bulgarian court. Until then there were no valid decisions, and therefore nothing to enforce. From that moment, every management-fee debt became a debt that could be collected.
It took 11 months, and two things held it up. First, the quorum: a founding meeting with foreign owners who don't show up requires proven summonses and a round of powers of attorney, and that alone took four months. And then the fact that the ordinary law is built for the common property of a building, whereas the gate, the guard and the pool sit on the complex's shared land. So we drafted the meeting decisions so as to expressly tie these expenses to the shared land and facilities. One apartment owner challenged the decision and lost, because in Bulgaria there are only thirty days to challenge a meeting decision, a deadline that is not extended.
Until it was sorted out, Guy funded a guard and pool maintenance out of his own pocket for two summers. About 38 thousand euros. Not because he was legally obliged, but because you can't sell six units in a complex with an empty pool. In the end he sold them, nine percent below what he had planned in 2024.
I think about this a lot, because no one in the chain did anything wrong. The lawyer drafted a proper sale contract. The notary authenticated a proper deed of sale. Guy built well and delivered on time. There was simply no one who asked the question that needed to be asked: who will manage this place in three years, and by what authority.
And that is the difference between an ordinary building and a gated complex. In an ordinary building, what you sell is an apartment. In a gated complex you also sell a gate, a pool and a garden, and these exist only as long as there is a body that collects money for them and has the power to enforce collection. The question of who will manage the place and by what authority is closed in the first contract, not in the next project. For Guy it was postponed by two years, and the price of the postponement was 11 months of work and 38 thousand euros.
And customers won't bring their complaints to the law. They will come to you.
The question I would ask in your place
- Who collects the management fees in my project two years after handover, and by virtue of what document registered on the property itself?
- What happens to my buyer's obligation on the day he sells the unit on?
- Did I even price the cost of operating the common property in the first and second year, or did I assume it was no longer my money?
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית