New bill tackles property auction irregularities

The ministries of Justice and Economy are preparing a bill to modernize the process of property auctions. The often ridiculous scenes every week at local authorities during property auctions have driven the government to submit a draft law to Parliament by this summer. The new bill will reportedly require anyone participating in an auction to submit a closed offer for the property being auctioned. This means that those interested will make their bids – but these will only be opened once the bidding process is over. This should put the brakes on obscure deals and effectively do away with the rings which hound property auctions. The bill will also include a clause forcing winning bidders who represent third parties to state in advance the full identity of their clients. It will also amend the clause concerning the starting price of auctions. The first bid, according to sources, must amount to two-thirds of the estimate price and not half, as it is today. Both the Notary Association and the Civic Contracts Agents have submitted memorandums to the Ministry of Justice and the Special Inspections Service about upgrading the auction process. They have also highlighted various strange cases, particularly in areas where the official system for determining property values does not apply. Notably, the only competent authorities for valuing the properties to be auctioned are judiciary officials. It is up to them whether they appoint an industry professional to do the job, so in some cases property valuations are too high or too low. People involved with property auctions say there has to be some change in the valuation procedure immediately, particularly for properties outside town-planning zones. The law actually says that if the owner in debt believes his property was undervalued by a judiciary official, he can resort to the courts. If the judiciary official has made a high valuation of a property then after two unsuccessful auctions, a decision can be issued for the reduction of the level of the starting bid.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.