Bulgaria's MPs approved the plan amendments to the Obligations and Contracts Act, thus scrapping the 10-year limitation on lease contracts between businesses. The change is in force for deals in which both sides are legal entities and the estate is leased for commercial intentions. Changes are not valid for estates that are offered for lease by private entities, the state, and the municipalities.
The changes are in line with the principles of a market economy and the principles freadom to agreement. The 10-rear rental period hindered companies with long-term interests. Until now, an investor needed to purchase property in order to develop a steady business for more than 10 years.
This required a large single investment, which some preferred to guide towards commercial activity, for example. At the same time, it was crucial for an investor to have a long-term lease contract in order to secure his investments. The leaseholder had no incentive to make expensive and lasting improvements to the leased real estate.