Preliminary Contract for Property Purchase: 7 Pitfalls and Tips

Signing a preliminary contract for property purchase is the most critical moment in the process of acquiring a home. This is the document that fixes the price, deadlines, and condition of the property before reaching the notary.

Many buyers think this is just a formality, but the truth is that the preliminary contract is your primary insurance, especially when buying property off-plan.

What is a preliminary contract under the law?

According to Art. 19 of the Obligations and Contracts Act (ЗЗД), the preliminary contract must contain all essential terms of the final contract (the notarial act).

Important: This contract does not transfer ownership! It is a promise to enter into a final contract in the future. If one party withdraws, the other may file a claim under Art. 19, para. 3 of ЗЗД before the court to declare the preliminary contract as final.

7 "pitfalls" and critical points to check

1. Price indexation (Inflation clause)

Recently, many builders include clauses that allow them to raise the price after signing if material prices increase.

Advice: Insist on a fixed price. If indexation is unavoidable, it should be capped (e.g., no more than 5%) and tied to an official index (such as that of NSI).

2. Deadline for putting into operation (Act 16)

Contracts for off-plan apartments are often unclear about the final deadline. "The deadline is 24 months from the start of construction" is a dangerous wording because it does not define when construction actually begins.

Advice: Set a specific date (e.g., by December 31, 2025).

3. Penalties for delay

The contract should be symmetrical. If you owe a penalty for late payment, the builder/seller must owe a penalty for delayed completion.

Pitfall: Watch out for "maximum penalty amount." Some builders limit the penalty to 2-3%, which does not motivate them to hurry.

4. Description of completion level

"On plaster and screed" can mean different things.

Advice: Request a detailed appendix – brand of windows, type of entrance door, installed outlets for air conditioners, radiators, etc.

5. Transfer without encumbrances

Make sure there is a clause obliging the seller to clear all mortgages and seizures before the day of notarial execution.