The housing association may auction off the premises of the long-term debtor

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In 2013, the Constitutional Tribunal (file no. SK 12/12) confirmed the legality of Art. 16 of the Act on Ownership of Premises, which allows housing communities to auction a flat whose owner is in arrears with payments for a long time. How does an auction of a flat by a housing association look like in practice against a long-term debtor?

Auction of premises - special provision

In the event of arrears with the community, the management board, after unsuccessful amicable (pre-trial) recovery, takes the course of writ proceedings, obtaining an order for payment with an enforcement clause. Then the enforcement proceedings begin. However, the legislator created a special provision concerning the way of conducting an auction of a premises in relation to a long-term debtor.

Art. 16 sec. 1 of the Act of June 24, 1994 on the ownership of premises.

"If the owner of the premises is in arrears with the payment of fees due from him for a long time or grossly or persistently violates the applicable domestic order, or by his improper behavior makes the use of other premises or common property inconvenient, the housing community may, in a process, demand the sale of the premises by auction. on the basis of the provisions of the Code of Civil Procedure on foreclosure of real estate ".

Auction of the premises - formal requirements

In order to start an auction of a flat by a housing association, it is necessary to bring an action to allow the sale of the premises by auction. The basis for such an action is a resolution of the housing community, which authorizes the management board to bring it as part of activities exceeding the scope of ordinary management. This is mentioned in art. 22 sec. 2 and sec. 3 point 7 of the Act on the ownership of premises.

In practice, the claim itself does not have to be preceded by claims for payment, or even a legally valid decision of the bailiff on the ineffectiveness of enforcement. In the event of ineffective enforcement of the writ from the writ of payment - with persistent debtors who have long arrears with payments - the sale of the premises by auction may turn out to be the fastest and easiest way to effectively recover the debt against the community.

Prerequisites for starting the auction of the premises

In order to effectively and legally start the auction of the premises, when preparing the lawsuit, the community board must show two premises:

  1. existence of debt;

  2. the longevity of the existing debt.

The first premise is not difficult to prove - proof may be community resolutions on fees, as well as accounting information. It is slightly more difficult to demonstrate the feature of longevity. However, taking into account the limitation period, which is 3 years (as a periodic benefit), the annual arrears with payments is a long-term debt. Courts sometimes also recognize a period of 6 months as a premise of longevity.

What happens after the property is auctioned?

After the auction of the premises, the money obtained from the sale is due to the debtor. The repayment of the liability to the community from the generated income may take place when in the lawsuit, together with the demand to sell the premises, it includes a request to transfer the money obtained towards the repayment of the resulting debt. However, in order to avoid a situation where the profits are paid in full to the debtor, the claim for payment should be secured by attachment.

It is not always possible to auction the premises

It should be remembered that the possibility of the forced sale of the premises referred to in Art. 16 of the Act on Ownership of Premises, however, it applies only to premises that are separate property. Therefore, it cannot be applied to rented premises where the tenant is in arrears with payments.

Nevertheless, practice shows that so far communities have very rarely resorted to such radical solutions. Nevertheless, this practice may change in view of this increasing backlog.