More and more properties are put up for compulsory auction. The most common reasons causing such auctions are divorce, unemployment and insolvency. The foreclosure procedure aims to pay off the creditor with the proceeds of a plot of land which is put up for auction. This procedure with all its details is regulated by the law on foreclosure and sequestration (Gesetz über die Zwangsversteigerung und Zwangsverwaltung – ZVG). Foreclosure auctions are typically conducted by the district court governing the district in which the property to be auctioned is located.
In addition to pieces of land, the objects of foreclosure can also be equivalent rights to land as well as ships registered in the shipping registry, all of which can be auctioned in order to pay off the debts of the owners with the proceeds. A foreclosure procedure is initiated only at the request of a creditor. For this purpose, the creditor must file a document including an enforcement clause at the district court. The court then orders the foreclosure of the property, and this order is then forwarded by the court of execution to the land registry, requesting to register a foreclosure note for the respective property. With this registration, the owner is removed from control over the property, which means that he can no longer sell it on the free market. Thus, the registration of the foreclosure note results in a prohibition of sale in favor of the creditor who has initiated this procedure.
The advantages of acquiring a property by way of foreclosure are, among other things, the possibility of acquiring a piece of real estate for a price significantly lower than its actual value and the absence of broker agency and notary fees.
Since the law surrounding compulsory auctions is very complex and requires close attention to many conditions and requirements, anyone who wishes to initiate or to take part in a foreclosure procedure should urgently consult with a lawyer in order to rule out possible problems or procedural errors from the outset.
Benefit from the experience that the STEINWACHS Law Firm has gained by supervising innumerable compulsory auctions both for parties having their property disclosed as well as for parties acquiring foreclosed properties.
Responsible for the content of the website Lawyer for Auction Law Hamburg Hamburg Bremen: Stephan Steinwachs (Lawyer Hamburg Berlin Bremen)