Hi, thank you so much for your help advice.
I have only signed the reservation receipt and handed 1000 deposit so far..but I could not see the preliminary until a week after I had signed this.
Upon inspection of this, I have been asked to underdeclare, I had also been told Vat was inclusive which is was not and hence the asking price of the property has increased by several thousand which is out of my initial budget for this particular property.
There are a few other things such as variences in the plan etc...
More than likely I will lose this deposit if i fail to commit at this stage
Oh well, live and learn,
Well Ben, it seems to me that you have legitimate grounds to unilaterally terminate the contractual relationship and demand back your deposit.
(1) The vendor's insistence on an under-declaration of the purchase price calls for you to participate in a criminal act in Bulgaria - fraud on the revenue. A Bulgarian court is hardly likely to uphold this. (And it also cheats the notary out of his/her maximum fee - and the notaries and judges tend to be good mates in most Bulgarian cities.)
(2) The addition of VAT to the quoted selling price is not justifiable if the seller (or its agent) didn't make clear at the time you paid the holding deposit that the quoted price was exclusive of VAT. There is a common misconception - in Bulgaria and elsewhere (eg UK) - that VAT is a tax payable by the buyer which the seller collects on behalf of the state and adds to the purchase price. But this is not the case. VAT is a tax payable by the seller as a percentage of the sale price of the taxable goods. If the seller fails to stipulate that a quoted price is exclusive of its VAT liability, then it shouldn't be able to ramp up the purchase price - so as to recover the payable VAT - after a contract has been formed. Its just - or should be - tough titty for the seller - it has to pay the VAT out of the agreed sale price.
So in your case, failure to disclose that the quoted price was ex-VAT is - or should be - a ground for cancelling the contract. But as I mentioned, sellers in Bg, especially the commercial ones like developers, deliberately foster the idea that VAT is a tax payable by the buyer on top of the purchase price.
(3) Misdescription of the property being sold compared with what is then put in the preliminary contract is potentially another ground for cancellation. Ok, if its only some minor points (eg, a colour scheme) perhaps not but misdescription of, eg, the available floor area of an apartment should be.
Where you have made life difficult for yourself is in handing over a deposit before even seeing the preliminary contract, let alone signing it. It will be your word against the seller/agent's whether these items differ from what had been verbally agreed before you paid the deposit.
Having said that, have you signed any form of agreement at all? Or did you just get a receipt for the deposit? If there was an agreement, did it specifically state that the deposit was non-refundable in all circumstances? It may be that the seller/agent has no legal grounds for refusing to return your deposit where it was accepted before signing of the preliminary contract.
I wouldn't give up so easily