Updated last 26.03.2021

In this section you can find the following information:

• What does “change of designation“ mean?
• What does “unit“ mean and how to distinguish the individual units?
• What does unit “code“ mean, in terms of change of designation?
• What is the procedure for changing the designation?
• What are the specific requirements applicable to the change of the designation of a unit in a residential building?
• What negative consequences I may have to face, if I use a unit in a manner, different from its designation?

In your business it may be necessary to use real estate properties in a manner, different from their original purpose. It is possible, for example, that it may be necessary to carry out production activities in an office, to use an apartment as a shop or to use a house as a hotel, etc. In such cases, before starting to use the respective premises, according to their new designation, the only possible and lawful option is to change the designation of the respective unit.

What does “change of designation“ mean?

The legal definition of a change of designation of a unit can be found in § 5, item 41 of the additional provisions to the Spatial Development Act (SDA), i.e. the change of one method of use to another, in conformity with their respective codes, being key cadastral data and defined in conformity with the Cadastre and Property Register Act (CPRA) and the regulatory documents for its implementation.

In order to decipher the legal definition, the meaning of the terms used must first be clarified.

What does “unit“ mean and how to distinguish the individual units?

A unit is a separate building or a real part of a building with a certain name, location, independent functional purposes and identifier, as per the CPRA. In this respect, “units“ are:

• land properties;
• buildings, including those, finished to the rough construction stage, as well as utility systems [1], containing an independent unit;
• independent unit [2] in a building or in utility systems

What does unit “code“ mean, from the perspective of a change of designation?

In conformity with the cadastral registers each and every unit, depending on its type, is identified with a certain cadastral data: identifier (unique number); area, storey/number of floors; shares in the common parts of the building; address; number of the batch of the property in the property register, etc. One of the elements, identifying the units is their “designation“, for which each unit is assigned a respective code.

The types of units, according to their designation, are listed in the “Classifier of the designation of buildings, utility facilities with its own units and separate units therein“, Appendix No. 4 to art. 16, para. 3 of Ordinance No. RD-02-20-5 of 15.12.2016 on the contents, creation and maintenance of the cadastral map and the cadastral registers and include such as:

• “buildings for permanent and temporary use“: residential building – single family – code 100; hotel – code 160, etc.;
• “public buildings“: commercial building – code 200; administrative, business building – code 300, etc.;
• “production, storage and infrastructural buildings“: industrial building – code 400, farm building – code 420, etc.;
• “separate units in buildings and technical infrastructure facilities“: office – code 660; storage room – code 670; apartment - code 500; premise for retail activity – code 550, etc.

What is the procedure for changing the designation?

The procedure for changing the designation of a unit is long, complex and expensive. Whether or not the change requires construction works, the law treats every change of the designation of a unit (apartment, shop, office, studio) as a new construction project.

Therefore, you should go through a series of procedures and have a design visa (in the respective cases, as per art. 140, para. 3 of the SDA), approved development-project design and construction permit.

The development-project designs must be coordinated with the utility companies (power supply, water-supply, etc.)

After receiving the respective construction permit, the construction works, if necessary, may begin. Irrespective of the type and scope of the construction (repairs) all necessary acts and reports, required during construction must be prepared (here and here).

Finally, upon completion of the construction, a permit of use is issued, or a commissioning certificate, respectively, and if applicable, categorization is carried out (restaurants and entertainment establishments) with respect to the unit and permissions are obtained from the specialized supervisory authorities, depending on the specificities of the unit and its future designation (e.g., permits by municipal authorities, Regional Food Safety Directorate, regional health inspectorates, etc.).

Important to know
	A change of the designation of a property is carried out on behalf of the owner and to his benefit. Тherefore, there may be inherent risks for your project, if you use the premises based on a lease agreement and these relations have not been settled in advance.

It is important that the reconstruction designs for residential buildings are always accompanied by a independent opinion by a fully qualified structural engineer, evidencing that the load (to the building) is not increased, no structural elements are affected and the load-bearing capacity, stability and durability of the structure of the building are not affected, and if changes to the structure are required or if the loads are increased, the structural part of the development-project design must be also attached.

If the reconstructed unit is situated into a building – monument of culture, the design is coordinated with the National Institute of Immovable Cultural Heritage.

What specific requirements apply to the change of the designation of a unit in a residential building?

In the above-ground floors of a residential building, apart from apartments, there may also be studios and offices for individual artistic activity, subject to the observation of the sanitary, fire-safety and other technical requirements, as well as the relevant safety standards.

In an existing residential building, organized as a condominium, reconstruction and change of the designation of residential premises or separate apartments may be transformed into healthcare office, business office or studio for individual artistic activity, involving access by non-residents to the building, subject to the following conditions:

• The units must be situated at the ground or semi-ground floor (as an exception – on other above-ground floors, based on a decision of the general assembly of the owners of apartments and with the express notarized consent of all the owners of apartments - direct neighbours of the respective unit [3]);
• The reconstruction of such units conforms to the sanitary, fire-safety, and other technical requirements (e.g., there are permits by Regional Food Safety Directorate, fire-safety certificates, etc.);
• There is an expressed written notarized consent of all the owners of apartments, immediate neighbours of the units.

The existing residential premises or a separate apartment at the first floor of a residential building may be reconstructed, by means of a change of its designation to be used as a shop or for other service activities under the following conditions:

• Subject to strict adherence to the sanitary, fire-safety, and other technical requirements;
• Subject to the provision of a separate entrance from the outside, different from the original entrance of the building and outside the common areas on the residential floors;
• A decision of the general assembly of the owners and express written notarized consent of all the owners of apartments-direct neighbours of the respective unit.

In the aforesaid cases, you do not need to obtain the consent of the owners in the condominium, when units for non-residential purposes (e.g., shops) already exist in the building, provided that during the reconstruction:

• No common premises and areas or parts thereof will be occupied and their designation will not be changed;
• The common parts of the building are not substantially altered;
• - connected are the indoor installations to common grids, passing through or next to the separation wall or through service premises along one vertical axis;
• No excessive noise or other pollution is produced.

If any of these conditions are not met, the requirements of art. 185, para. 2 and 3 of the SDA apply.

The consent of owners in the condominium is not required either, when restoring the residential designation of separate premises and units, that have been already transformed from residential to non-residential purposes.

What negative consequences may I have to face, if I use a unit in a manner, different from its designation?

There is an strict legal prohibition for construction projects or parts thereof to be used in a manner, different from their designation or in violation of the commissioning conditions (art. 178, para. 4 of the SDA). Тhe consequences of any failure to observe these provisions are, as follows:

• For construction projects from the first to the third category – the head of the National Construction Supervision Directorate or the official, authorized by him, based on a findings report, prohibits by means of a detailed Order, the use of the construction projects and orders their vacation, disconnection of the electricity, thermal energy, water and gas supply, telephone etc.;
• For construction projects of the fourth and fifth category, the mayor of the municipality or the official, authorized by him, based on a findings report prohibits by means of a detailed Order, the use of the construction projects and orders their vacation, disconnection of the electricity, thermal energy, water and gas supply, telephone, etc.;
• A fine of BGN 100 to 500 may be imposed, if the violation continues, after being established by an act. If, during the period of issuance of the penalty ruling, another violation is committed by the same person, another penalty shall be applied, amounting to from BGN 3 000 to 15 000.

Upon elimination of the causes, resulting in the prohibition and upon the payment of the respective fines and fees, commissioning will be permitted.

Мore information on the fees, related to the change of the designation, can be found here.

For more information
	For more information see: The Spatial Development Act; The Cadastre and Property Register Act; Ordinance No. RD-02-20-5 of 15.12.2016 on the contents, creation and maintenance of the cadastral map and the cadastral registers, issued by the Minister of Regional Development and Public Works.

---

[1] A separate part of the building or facility, subject of ownership and having a separate functional designation;

[2] E.g., bridges, tunnels, overpasses, subways, crossings, etc., transmission lines, power substations, potable and wastewater treatment plants, etc.

[3] The neighbours in the apartments, next to yours, as well as those on the floors above and below yours, everybody with whom you share a wall or from whom you are separated by a ceiling or floor.