A large share of residential projects in Sofia do not begin with a land purchase but with a different kind of deal: the owner grants a right to build (superficies under Art. 63 et seq. of the Bulgarian Ownership Act) and in exchange receives compensation — a share of the future units in the building. The structure saves the investor the capital for the land, but shifts the weight onto the negotiation: this is where projects are won and lost, before ground is broken.
The typical construction. The deal usually runs through a preliminary contract (Art. 19 of the Obligations and Contracts Act) which settles: the volume of the compensation — as a percentage of the gross built-up area or as specifically described future units; the conditions precedent — most often an effective detailed spatial plan, an issued building permit, and not rarely proven bank financing; and the deadline and procedure for concluding the final contract in notarial form. Each of these three fields carries its own risks.
Where Phase 0 looks. Before the investor deepens the spending, the initial assessment verifies: encumbrances and third-party rights over the property; the actual — not the declared — status of the planning procedure; the feasibility of the conditions precedent within a realistic timeframe; and the mathematics of the compensation — how the agreed share plays through the financial model under different area-allocation scenarios. A percentage that looks acceptable on paper can make the project marginal under a conservative scenario — that shows up in the numbers, not in the negotiations.
Staging as an instrument. On larger sites, staged delivery also changes the logic of the compensation: when the owner’s units are handed over, how existing buildings on the site are vacated, how the stages map onto the conditions precedent. Well-structured staging protects both sides; badly structured staging produces disputes at exactly the moment the project can least afford them.
One rule from practice. The land deal is not a legal document to be signed and filed away — it is a management object throughout the project: its conditions are monitored, its deadlines are planned, the relationship with the owner is maintained. In our model it enters the risk register as early as Phase 0 and stays there until the last unit is handed over.