E-note 5 – The attachement of immovable property (Citizen E-note)

  • strict warning: Non-static method view::load() should not be called statically in /var/home/europeeje/public_html/sites/default/modules/views/views.module on line 879.
  • strict warning: Declaration of views_handler_filter::options_validate() should be compatible with views_handler::options_validate($form, &$form_state) in /var/home/europeeje/public_html/sites/default/modules/views/handlers/views_handler_filter.inc on line 0.
  • strict warning: Declaration of views_handler_filter::options_submit() should be compatible with views_handler::options_submit($form, &$form_state) in /var/home/europeeje/public_html/sites/default/modules/views/handlers/views_handler_filter.inc on line 0.
  • strict warning: Declaration of views_plugin_style_default::options() should be compatible with views_object::options() in /var/home/europeeje/public_html/sites/default/modules/views/plugins/views_plugin_style_default.inc on line 0.
  • strict warning: Declaration of views_plugin_row::options_validate() should be compatible with views_plugin::options_validate(&$form, &$form_state) in /var/home/europeeje/public_html/sites/default/modules/views/plugins/views_plugin_row.inc on line 0.
  • strict warning: Declaration of views_plugin_row::options_submit() should be compatible with views_plugin::options_submit(&$form, &$form_state) in /var/home/europeeje/public_html/sites/default/modules/views/plugins/views_plugin_row.inc on line 0.
  • strict warning: Non-static method view::load() should not be called statically in /var/home/europeeje/public_html/sites/default/modules/views/views.module on line 879.
  • strict warning: Declaration of views_handler_argument::init() should be compatible with views_handler::init(&$view, $options) in /var/home/europeeje/public_html/sites/default/modules/views/handlers/views_handler_argument.inc on line 0.
  • strict warning: Declaration of views_handler_filter_boolean_operator::value_validate() should be compatible with views_handler_filter::value_validate($form, &$form_state) in /var/home/europeeje/public_html/sites/default/modules/views/handlers/views_handler_filter_boolean_operator.inc on line 0.

The regulations governing the attachment of immovable property are found in Chapter VII of the second part of Act LIII of 1994 on Judicial Enforcement ("e;Vht"e;).

1. General rules on the attachment of immovable property

Any immovable property owned by the debtor can be subject to attachment. The immovable can be a building, a building lot, arable land, etc. Attachment may apply to the entire property or to the ownership share of the debtor.

The court’s judicial officer must obtain the data related to the immovable property from the Land Registry.

2. Seizure of the immovable property

A crucial and indispensable step to the attachment of an immovable property is the seizure of the property. This is done by the judicial officer requesting the competent Land Registry to register an execution lien on the property. Seizure shall become effective upon registry of the execution lien with the Land Registry.

The Land Registry shall grant priority to processing the registration of the execution lien.

3. Time of sale of the immovable property

The judicial officer may take steps towards the sale of the seized immovable property if there is no other way to collect the claim within a relatively short time. As a rule, the sale of the immovable shall be done after the attachment of movable property. Naturally, if the value of the movable property is a fraction of the amount of the claim, this does not hinder the sale of the immovable property.

Taking into account the local circumstances, the judicial officer shall determine the time of the sale of the immovable that is most appropriate.

4. Estimated value of the immovable

An immovable is generally an asset of great value; for this reason, a realistic evaluation of its value is an indispensable step. The Vht primarily entrusts the judicial officer with the determination of the estimated value. Instead of obtaining official tax and evaluation records, the judicial officer may, at the request of any party, obtain an expert appraisal opinion.

The estimated value of the immovable must be determined for sale in both a vacant or an occupied state.

The judicial officer must notify the parties and all those having rights against the immovable registered with the Land Registry of the estimated value.

The judicial officer must inform the debtor of the options and conditions for payment in instalments, and that, after notification, s/he may submit a motion to the court within 15 days requesting postponement of the obligation to vacate the immovable.

If any party contests the estimated value, the value shall instead be determined by the court.

5. Auctioning of immovable property

Auctioning has always been the primary means for selling immovables. As a rule, immovables are to be sold in a vacant condition. The law provides an itemised list of cases in which immovables are to be sold in an occupied condition.

Auctions can be divided into two phases: the first is the call for electronic bids, while the second is the live auction held at the designated time and location.

Location of the auction

The Vht lists the places where an auction can be held (e.g. courthouse, on site at the immovable, etc.). The judicial officer shall choose the location which s/he believes to be most conducive to the success of the auction in the circumstances.

Announcement of the auction

The judicial officer shall set the auction by making an announcement to this effect, which essentially contains the time, place, terms and conditions of the auction. The announcement must include e.g. the name and contact information of the judicial officer and the data related to the attachment proceedings in question. An important part of the auction announcement is the description of the immovable. The judicial officer shall include the time and place for viewing the immovable as well as the procedural rules for the auction (such as making an advance deposit) in the auction announcement.

The auction announcement must be delivered to the parties, to persons holding a right registered in the Land Registry, to the relevant municipal clerk and to the Land Registry.

Bidding on electronic auctions

Bidders wishing to bid on an auction must request any court judicial officer to register them within the system.

The bidder registration fee is HUF 6,000. The fee for modifying a registration is HUF 3,000, while deletion is free of charge.

Persons wishing to place a bid on the immovable may only do so if they first deposit at least 10 % of the property’s estimated value in escrow with the judicial officer. The advance can also be paid by bank transfer.

Procedure for sale of immovable property by auction

If bids have been made electronically, the reserve price of the auction will be the highest published bid. Buyers having made electronic bids may also participate in the on-site auction. They do not have to deposit another advance for the auction.

When the auction opens, the judicial officer shall inform those present of the results of the electronic auction and of the corresponding reserve price.

After the auction, the winner of the auction is the one who has made the highest bid. His/her advance shall count towards the purchase price. As a general rule, the winning bidder must pay the balance of the purchase price within 15 days after the auction. If s/he does not pay the purchase price, the auction is deemed unsuccessful.

The judicial officer shall keep minutes of the auction. These minutes must show the exact Land Registry data of the immovable, its estimated price, whether the immovable is sold in an occupied or vacant condition, the auction purchase price, along with the name and data of the winning bidder.

When signing the auction minutes, the judicial officer may grant a deferment of the payment of the purchase price.

6. Sale of immovable without auction

If so desired by the parties, the judicial officer may sell the property to their designated buyer and for an estimated price which they have determined. In this case, the sale proceeds without auction but has the same effect as an auction. This means that the debtor’s right to ownership ceases and that the buyer obtains ownership, just as a buyer at an auction would. This is known as sale by private contract.

Sale without auction can take place at the request of the debtor at any time before the auction begins.

7. Takeover of the immovable property by the party requesting attachment

If the second auction is unsuccessful, the party having requested the attachment of the property can take over the property in exchange for half of the estimated value within 15 days from the date on which the auction is pronounced unsuccessful.