Of course, almost every resident knows that if he is a debtor and his obligations are confirmed on the basis of a judicial act that has entered into legal force (on collection or in bankruptcy proceedings), his property can be sold to cover the debt of the creditor.
ATTENTION : our lawyer for enforcement proceedings will help you in the procedure for selling the debtor’s property, both on the side of the claimant and on the side of the debtor: professionally, on favorable terms and on time. Call today!
What kind of housing is sold at auctions?
Real estate can be sold in three ways at auctions or auctions:
- if the seller is a debtor of the bank and sells his apartment under a voluntary agreement with the bank;
- if the seller is the bank itself, and its interests are represented by a realtor at the auction (necessarily accredited);
- if the seller is a bank and participates in an open auction.
Who wins the auction and how is the result formalized?
The participant who offers the highest price wins the auction (Clause 4, Article 447 of the Civil Code of the Russian Federation, Clause 6, Article 57 of the Mortgage Law).
Based on the results of the auction, a protocol on the results is drawn up, which indicates all the participants, as well as the price proposals that they made (clause 6 of Article 449.1 of the Civil Code of the Russian Federation).
Next, the winner pays the cost of the property in full within five days from the date of the auction. The previously paid deposit is included in the price. If you do not pay on time, the auction is considered invalid (clause 4 of article 91 of the Law, clause 7 of article 57, subclause 3 of clause 1 of article 58 of the Mortgage Law, clause 5 of article 448 of the Civil Code of the Russian Federation).
Then a purchase and sale or assignment agreement is concluded (in case of realization of the pledged lease right). The organizer enters into an agreement with the winner no earlier than ten days from the day the protocol on the results of the auction was signed, or from the moment it was posted on the Internet, if such posting was provided for (Clause 3 of Article 56 of the Mortgage Law, Part. 11 Article 89 of the Law).
Another conclusion period is provided for the purchase and sale agreement of mortgaged real estate - five days after the winning bidder has paid the purchase price. The signed agreement and protocol on the results of the auction will need to be submitted to the registration authority to enter information into the Unified State Register of Real Estate (Clause 8 of Article 57 of the Mortgage Law).
Features of electronic trading
In order to successfully participate in electronic trading, you must follow the following instructions:
- It is necessary to issue an electronic signature for the participant.
- Research and select the property you want to buy.
- The participant must be accredited on the electronic auction or trading platform.
- Study the object and all documentation on it.
- Transfer the deposit to the bank or organization that put the apartment up for sale.
- When the auction opens, place a bid and if you win, complete the paperwork.
Pros and cons of buying council housing
In order to understand whether it makes sense to buy an apartment that was previously seized, it is worth analyzing the positive and negative aspects of buying such real estate.
The advantages in this case will be:
- low cost – as a rule, the cost of such apartments is lower than the market price, so the offer is quite favorable;
- The reliability of the purchase lies in the fact that before the sale to its first owner, the house was checked and the apartment, respectively, too, so there will be no problems with long-term construction or the like.
The disadvantages in this situation are:
- you cannot view an apartment before buying it;
- former residents may create trouble because they do not agree with the decision of the bailiffs;
- This purchase has a number of difficulties in re-registration of housing, since there are encumbrances on it.
Bidding procedure
After the property has been seized, it is transferred to special organizations that deal with its subsequent sale. This is done by the bailiff. It is also possible for a credit organization to participate, for example, if there are any preferences regarding the choice of the implementing organization.
In turn, this organization is engaged in conducting auctions of seized property and must organize them within two months after the transfer. This is one of the supporting points that is worth noting on paper.
How to attract significant masses of consumers to trading. Everything is very simple.
An organization engaged in the sale of seized property must place advertisements about upcoming auctions in print media and on the Internet.
Such advertisements can be found on specialized websites, where a description of the lot and requirements for participants are indicated.
After such an advertising campaign, the implementing organization begins to collect applications and preliminary contributions from potential auction participants. Upfront fees are not a separate fee and are then included in the bidder's budget.
This procedure is aimed at ensuring that applicants can prove the seriousness of their intentions to acquire the seized property.
After the formal procedures are completed, direct bidding is held. They are planned for a separate date and their procedure is that the winner is the person who offered the highest price in real time within the framework of separate auctions. After this, the property is legalized, but we’ll talk about this a little later.
Buying a foreclosed apartment
In order to understand the cost of an apartment, you need to take it from the indicated cost in the writ of execution. The bailiff, who is directly involved in the execution of the proceedings, must notify the debtor within five days that he urgently needs to fulfill his obligations; if the debtor does not pay his debt, then the bailiff describes the object that was forced and imposes his arrest, that is, the housing is alienated.
The amount that must be repaid by the debtor within five days includes the entire debt with interest and penalties.
The sealed apartment becomes the property of the bank or the Federal Property Management Agency. Bidding will then take place.
Bailiffs
Buying real estate has a disadvantage in that it is impossible to inspect the apartment before purchasing it. You can evaluate the area, the house, the neighbors, but you won’t be able to evaluate the apartment itself.
From auction
The sale of an apartment is carried out only in accordance with the legislation of the Russian Federation, which stipulates that special events must be organized for citizens and organizations to conduct auctions.
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Each of the bidders can offer their own price for the apartment, the winner is the one who offered the most.
Bank
If the apartment is sold by a bank, then its price will be quite low. It is not profitable for the bank to keep the apartment on its balance sheet, so it wants to get a certain amount for it as quickly as possible, which the citizen owed him. To do this, a tender or auction is usually held.
At what price is the property sold?
As a general rule, the starting price at which the auction organizer puts the property up for auction must be no lower than that indicated in the bailiff’s resolution on the valuation of this property (Part 2 of Article 89 of the Law).
The price must be reduced by 15 percent during secondary auctions if the initial one does not take place. However, the price is not reduced if secondary auctions are held due to the fact that the winner of the initial auction did not pay the full cost of the property within five days from the date of the auction (part 2 of article 92 of the Law, paragraph 3 of article 58 of the Mortgage Law).
Is there a risk
When purchasing an apartment at auction that was previously repossessed for debt, there are risks. First of all, they are related to the fact that the future owner does not see the property until it is transferred after payment. Therefore, the moment arises when you can buy a pig in a poke. This is due to the fact that bailiffs do not show objects that have been seized.
The buyer is provided with information about the apartment and its technical description:
- meters;
- number of rooms;
- the floor on which it is located;
- general condition of the apartment.
Evicted tenants can appeal to the court regarding the seizure of property, so there is a certain risk that the decision will be approved and then the purchase will be considered invalid.
How to purchase
Seized property is sold in accordance with the laws of the Russian Federation, namely Federal Law No. 229. It spells out the main points and important provisions that relate to enforcement proceedings.
Documentation on the seized apartment must be sent to the FSSP department. To do this, you will also need to provide the bailiff's arrest report.
Before setting the auction date, documents must be verified.
Documents must be correctly executed, have legal force, and be current at the time of their submission.
Both individuals and legal entities can take part in the auction.
The auction procedure has several stages:
- The participant and the bank must sign an agreement on the transfer of the deposit amount.
- The participant must write an application for participation in the auction and attach the necessary package of documents to it.
- The participant receives a protocol that will indicate whether he has the right to participate in the auction or why he was refused.
Important rules for selling confiscated property
It is important to understand that seized property attracts buyers due to its price. Most often, auctions are held in two stages. At both stages, responsibility for the conduct of tenders and the procedure for them lies with the implementing organization.
At the first stage , the starting price is usually lower than the actual market price. This is due to the fact that a low cost increases consumer interest, and also because the price increases during the bidding process.
There are situations when the primary auction is declared invalid. This occurs in the following cases (for the record!):
- in the absence of applications for the auction or in the presence of only one application;
- in the case when only one participant came to the auction, and further bidding is pointless;
- if after the auction the winner has not repurchased the property.
As a rule, after a failed primary auction, a repeat auction is held. At the same time, in accordance with Federal Law No. 229, the starting cost of the object must be reduced by 15%. Otherwise, the auctions are conducted on the same principle as the primary ones.
If the second stage fails, the property becomes the property of the creditor organization. Subsequent sales are the responsibility of the new owner.
As a rule, this state of affairs is not profitable for banks , because new property objects incur additional costs.
Decor
As we indicated earlier, in order to participate in an auction or trade, it is necessary to collect a certain package of documents, which in turn consists of:
- Applications for participation in tenders.
- A check indicating that the participant has paid the deposit amount to the bank.
- Passport of the person participating in the auction.
- A document that lists and describes the submitted documentation.
- If the participant is married, then a spouse's agreement is required.
- An envelope with the amount that the participant can provide for the lot (apartment). It must be sealed.
An organization (legal entity) will need to provide a slightly larger package of documents. In addition to the above, it should also contain the following documentation:
- photocopies of constituent documentation;
- power of attorney for the person who will participate in the auction on behalf of the company;
- permission to purchase an apartment from the organization’s governing bodies;
How information about auctions and property sold is published
It is published by the organization that conducts the auction. As a general rule, information about property is posted within 10 days from the date of its receipt by such an organization, and a notice of auction is published no later than 30 days before it is held.
An exception is auctions of mortgaged real estate. They are notified of their holding no later than 10 days, but not earlier than 30 days before they are held (part 1 of article 87 of the Law on Enforcement Proceedings, paragraph 3 of Article 57 of the Law on Mortgage, paragraph 4 of Article 449.1 of the Civil Code RF).
After publication, the information must be stored on the website of the auction organizer from the date of its publication until the end of accepting applications from bidders.
Where is the information published?
The notice of auction and information about the property being sold is published (part 3 of article 90 of the Law, paragraph 4 of article 449.1 of the Civil Code of the Russian Federation):
- on the official website of the Russian Federation to post information about bidding – www.torgi.gov.ru;
- on the official website of the FSSP of Russia - https://www.fssprus.ru/torgi/;
- in print media, which are distributed, including at the location of the property being sold.
The specific print edition has not been determined. According to the FAS Russia, it must be selected based on the nature of the property, the circle of persons objectively interested in it, the circulation of the publication and the method of its distribution.
At the same time, according to some courts, the publication of information on the Internet is of primary importance, and in the print media it is of additional importance. This means that if information about auctions and property is published only in a printed publication, the auction may be declared invalid due to a violation of the procedure for conducting it, especially if the printed publication is not widely distributed and is not specialized. If the information is published only online, the likelihood that the auction will be declared invalid is lower.
If mortgaged real estate is sold, then in addition to publishing a notice of auction on the Internet, it is also necessary to publish it in a periodical, which is the official information body of the executive body of the constituent entity of the Russian Federation at the location of the real estate (clause 3 of Article 57 of the Mortgage Law). For example, in Moscow, notices are published in the official publication of the Mayor and the Moscow Government, “Bulletin of Operational Information “Moscow Auctions”.
What information should be included in the tender notice?
The notice of bidding must contain information (clauses 2, 3, 5 of Article 448, clause 4 of Article 449.1 of the Civil Code of the Russian Federation):
- about the time and place of trading;
- form of bidding. As part of enforcement proceedings, these are, as a rule, open public tenders in the form of an auction (clause 1 of article 449.1 of the Civil Code of the Russian Federation, part 3 of article 87 of the Law on Enforcement Proceedings);
- property that will be sold at auction. If this is real estate, then the requirements of Art. 554 of the Civil Code of the Russian Federation, that is, data is indicated that allows it to be definitely established, including its location on a land plot or as part of other real estate. In particular, you need to indicate the cadastral number of the property;
- existing encumbrances of the property being sold. For example, a mortgage or leasehold right;
- the procedure for conducting auctions, including how participation in the auction is formalized and how the winner is determined;
- starting price;
- owner (copyright holder) of the property;
- terms of the contract, which is concluded based on the results of the auction;
- the amount of the deposit, the timing and order in which bidders must make it.
For mortgaged real estate there is one more requirement. In the notice of the auction, which is published on the website www.torgi.gov.ru, you must additionally indicate the name and number of the periodical in which the auction organizer published the notice of the auction, and the date of this publication.
Possible difficulties
Difficulties in this case may be claims from the debtor, whose apartment was seized. He can apply to government agencies with a request to cancel the court decision. But as practice shows, debtors usually turn to collectors. This has its negative consequences because the guarantees that the apartment seized by the collectors will be returned to the client, that is, the debtor, are not written down anywhere.
Other difficulties may include independent attempts to return the apartment. Often, former owners knock on doorsteps and try to harm the new homeowner.
