What is considered a single residence in 2021?
To begin with, we suggest you understand how the bankruptcy procedure is carried out if the case involves a single residence (such circumstances appear in more than 50% of all bankruptcy cases):
- The sale of property is introduced and a register of creditors is formed.
- A bankruptcy estate is formed from the debtor's property, which also includes the only apartment.
- Next, the financial manager evaluates the property, the debtor's only residence and other items protected by legislative immunity are excluded. At this stage, housing, which is the only one the debtor has, is excluded from the bankruptcy estate.
- The property remaining in the bankruptcy estate is subject to sale. The money is transferred to creditors.
- The final stage involves writing off debts and completing the procedure.
Housing is first included in the list of the bankruptcy estate, but then subject to exclusion. What is considered the only housing? This can be an apartment, house or other residential premises that belongs to the debtor and serves as his permanent place of residence.
The only housing is considered to be an apartment or house:
- received under a social tenancy agreement;
- 100% owned by the debtor;
- where the debtor acts as a share owner;
- inherited by the debtor under title transactions.
If the debtor owns a couple of apartments or houses, the only apartment in this case will be considered the one in which the debtor permanently resides
. It will be determined during court hearings, after which it will be excluded from the bankruptcy estate. The remaining residential properties are subject to sale.
Events in bankruptcy of individuals. Persons with a mortgage develop differently.
Unfortunately, the collateral, which is mortgaged housing, is not recognized as the only one and is subject to sale when the property is sold. In this case, minor children and other members of the debtor’s family may be registered in the apartment: they are forcibly evicted. Next, the apartment is put up for auction, the proceeds from its sale go to pay off legal costs and are transferred to the bank (collateral creditor).
How the encumbrance is removed
In a situation where the owner did not inform the potential buyer in advance about the presence of restrictions, which became clear during the execution of the main contract, it is not always necessary to refuse such a transaction. First of all, the buyer needs to find out the reason for the seizure (sometimes, perhaps, the process of removing it is simply unnecessarily delayed). In addition, transactions become possible by mutual agreement of the parties. For example, a buyer purchases an apartment with housing and communal services debts, while the seller reduces the price of the property by the same amount. Of course, such agreements must be documented and preferably approved by a notary so that no problems arise. This caution is due to the fact that the debt must be repaid before the property is foreclosed on.
In the case of an encumbrance imposed at the initiative of the bank, bank consent must be obtained to sell the property. Next, the debt is either covered by the buyer before the purchase, or transferred to him, as the credit structure decides and as the parties agree among themselves.
In Rosreestr, the encumbrance is lifted on the basis of documentary confirmation from the body that imposed the arrest - that is, the court or the bailiff.
Can they take away their only home during bankruptcy?
The apartment, which is the debtor’s only place of residence, is not subject to seizure, no matter what the volume of the debt (if you do not take into account the mortgage). But there are exceptions.
In case of bankruptcy, the only housing may be seized if:
- the object is under bail. For example, under a mortgage agreement, under a loan agreement with a description of the collateral (apartment);
- the debtor violated the property interests of the creditors. For example, he took a large sum of money on credit, bought real estate, and then tried to get rid of it: give it to relatives, sell it, or dispose of it in another way;
- signs of fictitious or deliberate bankruptcy were discovered (everything is individual here; whether the housing will be taken away depends on the circumstances).
Arbitrage practice:
3 years ago, case No. A40-67517/2017, which reached the Supreme Court, became indicative.
The debtor borrowed money and bought a 5-room apartment with it. A little later, he divorced his wife, and the agreement on the division of property provided that the housing would go to the wife. A couple of months later, the ex-wife gave the apartment to her daughter.
The court declared these transactions invalid and returned the apartment to the debtor. He deregistered at his old place of residence, re-registered in the ill-fated apartment and filed for bankruptcy.
The 5-room apartment was supposed to become the only housing, and remain with the debtor. But the Supreme Court of the Russian Federation, having examined the circumstances, sent the case for review to the first instance, insisting on the sale of the only housing in bankruptcy.
Read on to learn how to resist debt collectors who threaten to take away your only home.
Overlay Information
Not only its owner, but also any outside interested party can find out about the arrest of an apartment for debts independently. The easiest way, if you need a paper document, is to order an extract from the Unified State Register of Real Estate (USRN). In this case, there is no need to submit any package of documents along with the request; it is enough to present your passport and a receipt indicating that the state fee has been paid for the service. The cost of the service depends on who makes the request (individual or legal entity), as well as on the form in which the finished document is needed (paper or electronic).
You can submit a request for an extract:
- At the Rosreestr branch, processing takes a maximum of three days;
- Through the Multifunctional Center - two days longer than in Rosreestr;
- By sending a request by mail, the delivery time of a registered letter in both directions is taken into account;
- Submit an electronic request via the Internet.
The arrest is imposed by decision of the court or bailiff. This could be an encumbrance for debts on utility bills, a bank claim, or alimony debts. In the case of banks, they do not have the right to independently impose any restrictions on property, just like any other body.
Is it possible to seize the only home?
If the only home of a bona fide debtor is under legislative protection and it is impossible to sell it, this does not mean that the only apartment cannot be arrested.
The position of the Supreme Court of the Russian Federation is found in review of judicial practice No. 1 (approved by the Presidium of the Supreme Court of the Russian Federation on April 13, 2021) and is consistent with the Resolution of the Constitutional Court No. 11-P dated May 14, 2012. It states that arrest is an interim measure and does not mean the full sale of the debtor’s only home.
Bailiffs can seize an apartment in order to prevent its alienation by the debtor. But they cannot take away the only housing. That is, you will use the apartment, live in it, but you will not be able to sell, donate or enter into other transactions with it
.
Impossibility of arrest
Russian legislation provides a list of real estate that cannot be foreclosed on in the form of seizure of sale. These exceptions include:
An example is a situation where the plaintiff went to court against the defendant, who owes him fifty thousand Russian rubles. If the plaintiff demands to seize the defendant’s apartment, which costs two million rubles, the court will refuse to satisfy the claim, since the difference is too significant. If the defendant in the same situation owes the plaintiff more than two million, then the arrest of his only home is possible.
Video on the topic
The only housing
Author:
Vladislav Kvitchenko
CEO . Practicing lawyer in the field of bankruptcy of individuals. persons Since 2015, she has been successfully handling insolvency cases. Vladislav is brilliantly versed in bankruptcy law, gives expert comments on legal situations and actively publishes in specialized publications.
In case of simultaneous arrest by decision of the court and the bailiff
When a card is seized for a debt for housing and communal services or for other reasons, imposed by both the court and the bailiff, here we are most often talking about a situation in which the bank is also involved. When collecting debt on a loan, in addition to the claim, petitions can be sent in parallel to the bailiffs, who impose restrictions on the received bank application.
A situation arises in which two arrests are imposed on one single apartment at once, one of which is imposed by the court, and the second by the bailiff. The situation gets worse when such property can be sold (not all restrictions categorically prohibit the sale). However, it is quite possible to remove the burden.
To lift the restrictions, it is necessary to submit a corresponding request to both the court and the bailiff who imposed the arrest. Having received the decision of these authorities, an application is written and submitted to Rosreestr directly or through the Multifunctional Center, by post at the discretion of the homeowner. At the same time, the judicial authority itself sends a notification to the Federal Registration Service that the encumbrance on the apartment has been lifted. The bailiff sends exactly the same within three days. In essence, the procedure for lifting a restriction is exactly the same as for imposing an arrest.
What information gives
Having figured out why, for what, by whom arrests are imposed and whether bailiffs can remove them in the same way as they impose them, you should understand how to use the information received. Referring to the provisions of the current Russian legislation, any encumbrance is a preventive measure aimed at ensuring that the debtor corrects the situation, repays the debt and avoids seizure of property.
If nothing is done, not only alienation and rental transactions are prohibited, but also inheritance of real estate. This can ultimately lead to completely illegal use of the apartment, which will entail a lot of problems and financial expenses. In addition, you will have to spend a lot of time visiting various authorities and courtrooms.
At the same time, knowledge of basic legal norms allows you to use the situation to your advantage. For example, few people know that if an independent expert issues an opinion that the seized apartment is unfit for habitation or there is evidence that the costs of the trial exceeded the cost of the apartment itself, the encumbrance will be lifted automatically.
The information in this article is provided for informational purposes only. We recommend that you contact our lawyer.
Seizure is a flexible concept, and, unfortunately, it also applies to property. That is, bailiffs can easily seize your apartment, that is, they deprive you of the right to use the property to the fullest. You will not be able to exchange bequeaths, and so on. It turns out that you will not be able to carry out any transactions or operations related to living space.
Not only bailiffs, but also the court, tax service and investigative bodies have the right to seize an apartment.
When an apartment is seized, the owner’s task is to keep it safe. As soon as the arrest is lifted, the owner becomes full-fledged and has the right to again dispose of the property at his own discretion. If a citizen is not one hundred percent the owner, that is, he only owns part of the apartment, then only this very part is arrested.
Sale of the debtor's property
The procedure for putting up residential premises for auction is determined by Chapter 9 of Federal Law No. 229; bailiffs use the services of electronic platforms. Objects are transferred to a specialized organization for sale with a full set of title documents, arrest orders, and court decisions. During the auction, the debtor can live in the apartment.
The auction is carried out within two months in the manner prescribed by the Civil Code of the Russian Federation and other legal acts. Information about the event is subject to publication in official Internet sources free of charge.
If the first auction does not take place, the organizer schedules a secondary event no later than one month. When the repeated procedure does not bring results, the seller sends the claimant an offer to accept the property as debt offset.
It is important to know! How much can bailiffs deduct from wages?
Anyone can buy real estate at auction. The sale is made in favor of the participant who offers the highest price. After the sale of housing, the debtor will have to move out and vacate the area within fourteen days, so it is recommended that an individual worry in advance about where he will move after the auction.
The current legislation of the Russian Federation protects debtors from the loss of their only home, but do not forget about exceptional situations, such as a mortgage. It is impossible to evict citizens from a privatized apartment due to non-payment of utility bills. Minors can become an obstacle for creditors when foreclosure on residential space where children are registered and live. It is important to know that the debtor has the right to challenge the actions of the court, bailiffs, and the collector legally.
What property is not subject to seizure
First, let's highlight the property that is not subject to seizure:
- one dwelling owned by the defaulter;
- land plots issued for personal use by workers and other persons living in rural areas or plots of land located under a house;
- things of a household and personal nature of the debtor;
- items related to the debtor’s work in his profession;
- domestic animals;
- finance (the amount of one subsistence minimum);
- In 2015, the Supreme Court of the Russian Federation established a provision according to which an official has the right to seize the only housing for debts.
How to remove a seizure from an apartment imposed by a bailiff
Only the authority through which it was imposed has the right to lift the arrest from the apartment. In fact, the process of releasing property depends only on the desire of the court, the defendant or another interested party.
First of all, it is determined why exactly the apartment was seized. For example, the arrest was imposed due to mortgage debts. This means that the housing will be released only when the owner pays off his debts in full, as stated in the lawsuit on behalf of the bank filing the lawsuit. The same situation applies to tax debts.
As soon as the owner of the apartment submits an application to lift the arrest to the executive authorities, the work process is immediately launched. Moreover, this application can only be submitted by the owner of the property; this right does not extend even to authorized persons.
Secondly, you need to pay the state fee. To prove that the property belongs to the owner, he is obliged to pay a state fee, after which all the necessary documents are submitted to the court that confirm that this citizen is the owner.
In addition to the above documents, the owner must provide paperwork for payment of debts, fines and taxes.
Next, the court sets a date for the hearing where the case will be considered. In the same room, the court’s decision will be announced whether to lift the arrest from the apartment or not. if the court's decision was perceived as unfounded, it can be appealed.
As soon as the court makes a decision in favor of the homeowner, a writ of execution will be drawn up for the bailiff. As soon as the court decision comes into force, the seizure of the apartment is lifted.
As a rule, if all the documents and receipts are available, the court agrees with the owner. But it also happens differently if the owner has not satisfied all the judge’s requirements. If this happens, then there is no point for a citizen to contact other authorities; they will not be able to do anything anyway.
They'll take the last one. Under what conditions can a debtor’s only home be seized?
Guests
Viktor Fedoruk, leading expert on housing law, housing and communal services of the All-Russian movement “For Human Rights”
Ivan Knyazev:
This is also such a serious topic. It’s better not to get into debt, no matter what it is, they can take away your apartment. Here the Constitutional Court allowed the confiscation of the only housing from debtors. A precedent occurred in the Northern capital, St. Petersburg: one citizen owed a friend several million, well, once it was less, then the interest accrued, indexation is more accurate. At the same time, she had a large apartment, although the woman declared herself bankrupt.
What's the result? As a result, the court decided to seize and sell her home. It turned out that the norms of the Civil Procedure Code and the bankruptcy law in this case do not contradict the Constitution. True, this rule works under certain conditions. Which ones? And could such a precedent have consequences for other debtors? We will now deal with the experts, because there are various legal subtleties here that we probably won’t be able to clarify on our own.
Oksana Galkevich:
And in fact, we won’t, so we’ll include in the conversation the leading expert on housing law and housing and communal services of the All-Russian Movement “For Human Rights,” Viktor Fedoruk. Hello, Viktor Nikanorovich.
Victor Fedoruk:
Good afternoon.
Oksana Galkevich:
Well, then let’s immediately explain this topic along the way. Under what conditions can it happen that a person’s only home can be taken away by court?
Ivan Knyazev:
And what doesn’t contradict what?
Victor Fedoruk:
Well, look, if we look at this specific example, a citizen borrowed money, for the same money she bought herself a house more than 100 meters away and is not going to repay the debt. But we have standards for providing housing per person, for example, for Moscow it is 18 meters, in other regions it may be less. We have standards for registering those in need, for Moscow it is 10 meters, if less than 10, you will be put on a waiting list to be provided with housing. The only thing we don’t have today is sanitary standards. Galina Viktorovna Khovanskaya repeatedly appealed to the chief sanitary doctor, and also to Onishchenko, so that such a sanitary standard for one person should be established, below which one cannot fall, so that if a person is evicted, they will be given some kind of housing in return. We have judicial practice, for example, in Moscow, in the Kapotnya district, an abandoned hostel was renovated and debtors were moved there, the main thing is that there was at least 6 meters per person.
So, the citizen bought 100 meters, and if she had been in Moscow at a time when there were free spaces for debtors, she could have been moved to these 6 meters, and no court in the future, no appeal, no cassation, could help these people who were moved to such a hostel for debt. So here, in this particular case, there is an abuse of right: a person appeals to the fact that he has one and only housing, but let’s live in housing, where at least 18 meters will be left for you after the sale of your 100-plus meter apartment and they will pay for those debts that you took from a citizen. She doesn’t deny that she took it, she says that she has one and only housing, only 100 meters with something to her, and now extend the law to me, do not evict me from one and only housing.
Oksana Galkevich:
Viktor Nikanorovich, what if, I don’t know, another hundred and fifteen relatives are registered there, one meter each?
Ivan Knyazev:
Children, for example.
Oksana Galkevich:
Yes, children, for example, old parents?
Victor Fedoruk:
Now, if they were carrying cartridges or pasta, this is another option, in this case 100 meters per person, and one single dwelling is not entirely correct.
Ivan Knyazev:
And once again, what is our minimum housing standard in the country?
Victor Fedoruk:
So I’m saying that Galina Viktorovna Khovanskaya, Chairman of the State Duma Committee on Housing and Communal Services and Housing Reform, is appealing to the Chief Sanitary Doctor so that this sanitary standard is established in Russia. We don't have it today.
Ivan Knyazev:
It's clear.
Victor Fedoruk:
There is a pitfall in solving this problem.
Oksana Galkevich:
We have a call from Moscow, let's talk to our viewer, his name is Sergey. Sergey, hello, join the conversation, we are listening to you.
Viewer:
Hello.
Mine is probably not like that... Your expert said everything correctly about St. Petersburg, the situation there is ambiguous. But taking away the last housing, even through the courts, is the most extreme measure. And at the same time, I want to say that the official responsible for protecting the rights of citizens, that is, the guardianship authorities, and the prosecutor’s office should be present, because there are different situations why a person cannot give. And if we put all this under one article, that you don’t want to give up, take away your housing and relocate it to the measures that are required by law - what if there are children there? Are there any elderly parents there? That's a very difficult question.
Oksana Galkevich:
How can this issue be resolved if there is a family and children, but the person does not fulfill his obligations, does not pay, for example? Debts can be accumulated, by the way, for housing and communal services, for example, it is not necessary to take money from someone to buy an apartment.
Viewer:
Is it possible without losing your last apartment...
Oksana Galkevich:
So. How?
Viewer:
...the last home...
Oksana Galkevich:
How?
Viewer:
This is the very thing, we should bring him to criminal responsibility, give him corrections, let him work...
Ivan Knyazev:
Working it out.
Viewer:
...and pays the money.
Oksana Galkevich:
But it will probably be administrative, not criminal. We all have some kind of criminal law...
Victor Fedoruk:
Let me answer...
Viewer:
That's it, administratively, to pay the money in a different way.
Ivan Knyazev:
Yes, thank you, Sergey.
Oksana Galkevich:
Yes thank you. But still administrative, not criminal, this is very important, very important.
Ivan Knyazev:
These are different, different things, of course.
Victor Fedoruk:
The Constitutional Court made a clause that a person cannot be left without housing, he needs to be left with a sufficient norm, this is a clause. And if this citizen is still given 18 meters per person, well, these are normal conditions. Many people here live in much worse conditions, and this...
Ivan Knyazev:
It's true.
Oksana Galkevich:
Viktor Nikanorovich, how will events develop here further? Well, not specifically in this story, but they can develop. That is, accordingly, this apartment should be put up for auction?
Victor Fedoruk:
No, no, then it will be the state... There, if the court has taken a stand, it will be difficult to correct it. Now the State Duma must make clarifications to the Civil Procedure Code, remove this restriction and make a reservation about sufficient space for those being resettled, and then this process will begin.
Oksana Galkevich:
Yes, this is understandable, Viktor Nikanorovich...
Ivan Knyazev:
Do you think it's just...
Oksana Galkevich:
I am sorry…
Ivan Knyazev:
Yeah, yeah.
Oksana Galkevich:
I'm just trying to understand, will this person be moved somewhere to some kind of social housing, will her apartment be sold, will the debt be deducted?
Victor Fedoruk:
In this case, in pursuance of the decision of the Constitutional Court, the court will review its decision and decide to sell this apartment at auction. It will be sold, and the citizen, according to the provision norm, if 18 meters per person is left, will select the area or allocate money so that she receives...
Ivan Knyazev:
Well, it makes a difference if it covers everything there.
Victor Fedoruk:
...meters and that's it.
Ivan Knyazev:
Yes it is clear.
Oksana Galkevich:
Clear.
Ivan Knyazev:
Now you understand, Viktor Nikanorovich, what is the question? While the State Duma finishes everything that is needed, won’t the bailiffs now just run to take away apartments, count these square meters, who is entitled to what, those who owe for housing and communal services, for some kind of loan, and so on? That's what's worrying.
Victor Fedoruk:
The bailiff will not run anywhere without a court decision.
Ivan Knyazev:
Well, now people will go to court en masse, organizations will go to court, bankers will go to court and then simply start taking away people’s housing while the deputies there settle everything, register it. Will this not happen or will it happen?
Victor Fedoruk:
This should not happen now; this is why the law needs to be amended so that we do not have ambiguity in the implementation of this law. There must be one way to solve this problem.
Ivan Knyazev:
Well, yes, we were a little reassured. Let's hope that the deputies will quickly accept everything.
Oksana Galkevich:
Well, accumulating debts is actually dangerous, this is a well-known story. Tell me, please, Viktor Nikanorovich, is there some, so to speak, amount of some kind of debt, after which, relatively speaking, the management company can already go to court and so on?
Victor Fedoruk:
Well, this is stated in our Housing Code, we are required to pay by the 10th of each month. We haven’t paid for a month, we already have fines in a month, and in two months there are already increased fines...
Oksana Galkevich:
Yes.
Victor Fedoruk:
So there is no need to save, you will still have to give it away. The sooner we pay, the better conditions we will be in; there will be no penalties, and there will be more left over.
Oksana Galkevich:
Well, it’s clear, maybe there’s just some kind of cut-off point, we wait 3 months, and by the 4th month we’ll go to court.
Victor Fedoruk:
That's what management companies do.
Oksana Galkevich:
That's what they do, obviously.
Victor Fedoruk:
An application is submitted automatically, and this application is submitted not to the court, but to the magistrate, an application for a court order. The debtor is not invited to court.
Oksana Galkevich:
Just like that.
Victor Fedoruk:
And only by mail to him...
Ivan Knyazev:
The notification is just coming.
Victor Fedoruk:
...they will send a decision, called a court order.
Oksana Galkevich:
Oh, well, this is actually a terrible thing, they deprived you of your apartment without you. Thanks a lot. Viktor Nikanorovich Fedoruk, a leading expert on housing law and housing and communal services of the All-Russian Movement “For Human Rights,” was in touch with us.
Ivan Knyazev:
In SMS, people are mainly, again, worried that this way they will now collect their debts and will have to say goodbye to their apartment. Well, many write that it is really better not to take on any debts, not to keep them for yourself, then you can sleep peacefully. Let's move on to the next topic.
Oksana Galkevich:
And many write that there is no need to hope that he sat on the neck of someone there, the state or another person, dangled his legs and drove off - no, that’s it, it’s high time to restore order, the Chelyabinsk region writes.
Change the subject.
Can real estate always be foreclosed on?
The bailiff will not collect the debt through the sale of real estate if it is possible to obtain funds otherwise. For example, if you have a bank account, securities, transport and their sufficient value to pay off obligations, the real estate may not be touched. At the same time, foreclosure is not applied to the debtor’s only home (Article 446 of the Code of Civil Procedure of the Russian Federation). So, if housing is used for the residence of the debtor himself, as well as his family, then its seizure is a violation of the right to housing, that is, a violation of constitutional law and legal norms, which is unacceptable. The land plot on which the debtor’s only residence is located is also not subject to recovery. This is due to the fact that the land always follows the fate of the structure (Article 552 of the Civil Code of the Russian Federation, Article 35 of the Land Code of the Russian Federation). In fact, non-residential real estate can always be sold within the framework of enforcement proceedings, but residential real estate - only when it is not the only one for the debtor and his family. However, there is an exception to this rule.
It is important to know! What property is not subject to seizure by bailiffs: list and explanations
Alimony
A seizure of an apartment with impending seizure is possible when a citizen, who owes a huge amount of alimony, tries by any method to hide his real estate and current place of work. If the collected amount is comparable to the price of the home in which the defaulter lives, then the official who enforces court decisions and decisions has every reason to seize.
For example: a parent did not pay child support for a long time. As a result, a huge amount accumulated. The debtor does not have any other real estate, excluding an apartment. The official who enforces court decisions sends a request to the federal state registration service and it turns out that the defaulter recently inherited another property, which is equal in value to the debt. In such a situation, the apartment is seized so that it is impossible for the debtor to dispose of it and sells it at auction.
