Execution of movable property - how to buy things at a bailiff's auction?
A bailiff may take over not only remuneration for work, a bank account or real estate. It may also seize and auction off the debtor's movable property. However, due to the impractical way of selling them, enforcement of movable property often ends unsuccessfully and is discontinued. What is worth knowing about it?
First, seizure of movable property
Theoretically, the bailiff can take almost all movables that are in the possession of the debtor. But there is a long way from seizure to success in the form of finding a buyer. Execution of movable property often ends unsuccessfully. Effectively, the auction may end with the sale of, for example, cars, new electronics or household appliances. However, it is difficult to find a buyer for, for example, 20-year-old furniture.
Enforcement of movable property begins with the seizure of the property by a bailiff (Article 845 of the Code of Civil Procedure). The bailiff enters the seized items into the protocol, sticks stickers with information about the seizure on them and, as a rule, leaves the items with the debtor. If the seized movable property was left in the room belonging to the debtor and the supervision was entrusted to him or a member of his family living with him, they have the right to ordinary use of the thing, as long as it does not lose its value.
For important reasons, you can put things under the supervision of another person, including the creditor.
Estimating the value of movable property
The next step is to estimate the value of things. You do not need an expert witness for this, but if the bailiff decides that you should use the services of an expert, he may do so. The expert must be summoned obligatorily to estimate things of historical or artistic value. The expert must also be appointed when the creditor or the debtor in the complaint question the assessment made by the bailiff.
Estimation is important because the starting price at the auction will apply to the estimated value.
How do I find out about an auction?
Most of the seized items go to bailiff auctions. However, they have little to do with the common perception of such auctions - gathering many items in one place, their next presentation, crowds of people watching and bidding things. Bailiff auctions in Poland usually take place at the place of residence or the seat of the debtor - where the seized items have been left. Very often, no one interested in buying things appears on them or they are individual people. Therefore, execution of movable property is not one of the most effective methods of execution.
The fact that there will be an auction of movables can be found out in a very practical way - from a sheet of paper (announcement about the auction) posted at the seat of the court. Information about auctions is also available on the website of the National Council of Bailiffs and on the websites of bailiff offices. However, many things are described there so laconically that it does not encourage participation in the auction - the more so as it cannot be done remotely and you have to appear in person at the place and time indicated in the announcement.
In the auction announcement, the bailiff shall specify the time, place, object and conditions of the auction, the sum of the estimate and the price of the call, as well as the place and time in which the movable property can be viewed.
Sale by auction
In order to be admitted to the auction, you must pay a deposit (referred to in the regulations as a “warranty”). It is 1/10 of the sum of the estimate. They must be paid on the day before the auction at the latest. The deposit does not have to be paid if the execution against movable property concerns things of less value: if the sum of the assessment is lower than PLN 5,000.
What does the execution of movable property look like by auction?
takes place in public;
cannot bid on: the debtor, bailiff, their spouses, children, parents and siblings, persons present at the auction in an official capacity and the bidder who did not comply with the conditions of the previous auction;
it is enough for one person willing to bid for the auction to take place;
you can bid through an attorney-in-fact - but the power of attorney should be confirmed by a document with an officially certified signature, unless it is a power of attorney granted to an attorney or legal advisor;
the bailiff will admonish the person offering the highest price, if, after three calls for further proceedings, no one has offered more;
upon receipt, the sale of the movable property to the buyer takes place;
the buyer becomes the owner of the acquired movable property after the adjudication has become final and the entire price has been paid;
the paid bid security is returned to those bidders who lost the auction; the bid security paid by the winner is included in the price;
if the winner fails to pay the price, the deposit is forfeited.
The starting price at the bailiff's auction of movable property is: at the first auction - three-quarters of the estimated value; on the second auction - half the estimated value.
When do you have to pay for the auctioned items?
The person who has auctioned off the goods is obliged to pay the purchase price immediately after the bailiff grants it. However, when the price exceeds PLN 500, the buyer must immediately pay only one fifth of the price (not less than PLN 500). However, the rest (which also includes the deposit) must be paid:
on the next day during the office hours of the bailiff's office, or
to the bailiff's bank account by 6 p.m. the next day.
If this day falls on a Saturday or a public holiday, the price shall be paid on the day following the day or non-working days.
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Ineffective execution of movable property
Auction execution of movable property often ends in a fiasco - nobody buys things. Then what?
If no one bought the item at the first auction, the creditor has a choice:
demand that the second date of the auction be set; or
take ownership of all or some things for a price not lower than the starting price; the declaration of takeover will be taken into account only if the creditor pays the full price simultaneously with its submission (in some cases, instead of paying the price, the creditor may include his claim against the debtor on it);
do nothing - then the bailiff will discontinue the execution of unsold movables.
If the second bidding has failed, it is not possible to designate another bidding. The creditor must then either take ownership of the property, or the execution of the movable property is discontinued.
Disadvantages of the current auction model
Bailiff auctions of movable property in Poland are not very effective because they are organized in such a way that many potential interested parties do not take part in them for practical reasons, and few people know that there is an enforcement of movable property.
It is caused by:
auctions usually take place at the debtor's place of residence or headquarters - many people feel discomfort before buying the debtor's things in his apartment or business;
in order to bid on an item, you have to appear in person at a specific place and at a specific time, where the execution of movable property is taking place - it is currently not possible to bid at a distance;
information about auctions is scattered, descriptions of things are not very practical, often contain too little information.
Sale outside of auctions
For some items, bailiffs already have the option to sell them outside of an auction.
Without the consent of the creditor and debtor, the bailiff may sell:
perishable movable property, or
movables over which supervision would incur excessive costs.
You can also sell other items individually, provided that:
the debtor has consented to this and has determined a minimum sale price, and
none of the creditors conducting the enforcement objected to it within one week from the date of notification by the bailiff of the intention to carry it out.
Seized unused movable property, constituting the subject of commercial trade, the bailiff, at the request of a party, may sell an entrepreneur trading in such movable property at wholesale prices, and when such prices are not documented, at prices 25% lower than the estimated value of the movable property (Article 865 of the Code of Civil Procedure) .Thanks to this, the execution of movable property takes place without an auction.
Pending bailiffs' e-auctions
Enforcement of movable property carried out by a court bailiff may be much more attractive and more often end with the sale of things thanks to the created portal for bailiff auctions. The National Council of Bailiffs is working on it. After its launch, it will be possible to participate in the bailiff's auction "at a distance" via the Internet. There will also be one systematized database with information about auctions. You will still need to pay the bid security before bidding - you can also do it online. After bidding on the items, you will have to pay the difference between the auctioned amount and the deposit on the next day at the latest. Items sold at e-auctions will be collected from debtors immediately, and not only after the sale.