What Is a Stop Deposit and Why It Matters When Buying a Property

Purchasing a property, especially in an urban environment like Sofia, is a process that requires careful planning, thorough information, and clarity regarding every individual step. One of the most important—and often misunderstood—phases when reserving an apartment is the so-called “stop deposit” – a term frequently used by investors and brokers, but not always fully understood by buyers.

The stop deposit is a sum paid by the buyer as a form of preliminary guarantee that they are seriously committed to purchasing a specific property. This amount is not part of the purchase price itself but serves as a commitment on the client’s part. It is usually a fixed amount—for example, €5,000—and is transferred to a designated bank account of the seller or investor. It’s important to note that the stop deposit is not considered a “down payment” under the Bulgarian Law on Obligations and Contracts, but rather a separate type of agreement based on good faith and mutual trust between the parties.

The main function of the stop deposit is to “reserve” the selected apartment for a specified period during which the buyer and seller are expected to finalize and sign a preliminary sale agreement. During this time, the property is no longer actively offered to other clients, which is crucial in a dynamic market. This gives the buyer peace of mind, knowing that they won’t lose the chosen apartment while arranging financing, consulting legal experts, or simply finalizing their decision.

From the seller’s perspective, receiving a stop deposit is equally important as it confirms the buyer’s serious intentions and reduces the risk of withdrawal without valid reason. When the preliminary contract is signed, the buyer typically pays the first installment—often 30% of the purchase price—after which the stop deposit is reimbursed by the seller within an agreed period (usually within 3 business days).

The legal weight of such agreements is substantial, especially when everything is documented in writing. The document, known as a “Stop Deposit Receipt Protocol,” clearly defines the parties involved, the property details, bank accounts, and the terms for refunding or retaining the deposit. It’s important to emphasize that if the buyer fails to follow through with their commitments (for example, backs out without the seller’s fault), the deposited amount is retained by the seller. On the other hand, if the deal falls through due to the seller, the deposit must be fully refunded to the buyer.

Because this is a preliminary but binding step, many clients tend to underestimate its importance. That’s why we strongly recommend that before signing any documents, buyers carefully read the terms and, if needed, consult a legal professional. This is especially relevant for first-time buyers or those unfamiliar with the Bulgarian real estate market.

In conclusion, the stop deposit is an integral part of the property purchase process in developments like Pirotska Residence. It protects the interests of both parties and lays the groundwork for a calm, predictable, and secure transaction. In today’s fast-paced real estate market, where desirable properties are often reserved within days, this measure ensures a much-needed sense of stability before moving on to the next significant steps.