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Amendments regarding the Commissioning of Constructions

19 December 2019

On November 15, 2019 the amendments to Ordinance No 2 of 2003 on Commissioning of constructions in the Republic of Bulgaria and minimum warranty periods for completed construction and installation works, facilities and construction sites (the “Ordinance”) entered into force. The adopted amendments aim at standardizing the administrative services for the commissioning of fourth and fifth category constructions. The constructions under these two categories include medium- and low-rise residential and mixed-use buildings; reconstructions, restructuring, major repairs and change of designation of fourth and fifth category constructions; buildings and facilities for public servicing with a gross floor area of up to 1000 or 5000 square meters; production buildings with capacity of up to 50 working places and the facilities with them, etc. The amendments also extend the minimum warranty periods for completed construction and installation works, facilities and construction sites. The key amendments concern the following:

1. Commissioning of fourth and fifth category constructions

The amendments provide for the introduction of a uniform application form for the registration and issuance of a certificate of commissioning of fourth and fifth category constructions which is to be used by all municipal administrations. A uniform format of the Certificate of commissioning of fourth and fifth category constructions will also be introduced.

Along with the application for commissioning of fifth category constructions, the final report of the person exercising construction supervision shall be submitted as well. This shall not apply to constructions for which a construction permit has been issued before March 29, 2019 – those shall be commissioned according to the current procedure.

The Certificate of commissioning, as well as the authorization for use or the refusal to issue them, shall now be served by a licensed postal operator, if this is indicated upon submission of the relevant application.

2. Extended minimum warranty periods for completed construction and installation works

The second significant amendment to the Ordinance is related to the warranty liability of the contractors after completion and commissioning of the sites. The scope of warranty liability has been extended while also extending the warranty periods for certain types of construction works. The minimum warranty periods have been extended from 1 to 3 years depending on the specific construction and installation works, facilities and construction sites. The amendment aims at a more stringent fulfillment of the obligations of contractors and persons exercising construction supervision in accordance with the issued construction papers, the basic requirements for construction works, the rules for the execution of construction and installation works and the technological requirements for the materials and products used in the construction works. This is also expected to increase the value of the construction service.

According to an explicit new provision in the Ordinance, the defined minimum warranty periods shall not apply to technological equipment – machines and/or equipment that are subject to commercial transaction and have а warranty card. The  warranty periods of the manufacturer or of its authorized representative who are responsible for the release onto the market shall apply for that equipment, and for the contractor who installed it – the warranty period of the site where it is installed.

A provision aiming to regulate the relations in applying the new warranty periods has been adopted in the transitional and final provisions. However, the wording of the provision is extremely vague and creates preconditions for disputes about the exact period from which the new warranty periods should apply. In view of the general legal principles and rules, it should be interpreted that amendments to the warranty periods shall only apply from their adoption forth – for construction contracts concluded after the amendments have entered into force. However, the vague wording may also lead to the opposite interpretation that the amendments shall also apply to completed construction works, including already commissioned sites. Such interpretation would lead to a number of disputes between assignors and contractors which would most probably result in lack of predictability in the construction process and a number of uncertainties in the pricing of construction and installation works. We have yet to see what direction the practice will take.

 

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