The Law on Enforcement and Security (“Official Gazette of RS”, no. 106/2015, 106/2016 – authentic interpretation, 113/2017 – authentic interpretation and 54/2019), as one of the instruments of enforcement for the collection of claims prescribes the sale of enforcement debtor’s immovable property.
The enforcement of monetary claims against immovable property is executed with the registration of the annotation of enforcement decision in the real estate cadastre, the estimation of value of immovable property, the sale of immovable property and the settlement of the enforcement creditor from the sale price.
The enforcement creditor files a motion for execution through the sale of immovable property of the enforcement debtor for the adoption of the enforcement decision which the assigned public enforcement officer shall submit to the competent office of the real estate cadastre. The real estate cadastre registers the annotation of the enforcement decision and with the registration of the annotation the enforcement creditor acquires the right to be paid off from immovable property (right to settlement) as well as the right to settlement before those who had also acquired the right to settlement from the same immovable property (priority settlement).
The estimation of the value of immovable property is performed at the market value on the day of estimation and based on a written notification of the price which the public enforcement officer has acquired from relevant organizations, institutions, and legal and natural entities from the relevant profession. The public enforcement officer can also accept the immovable property value estimation proposed by the enforcement creditor if it is not older than 6 months and stems from the relevant organization, institution, or legal and natural entities of the relevant profession. After the performed estimation the public enforcement officer determines the value of the immovable property.
The sale of immovable property is performed via oral bidding determined by a public enforcement officer or direct agreement according to an agreement between the parties. The law also prescribes the option of electronic bidding, via the electronic sales portal. The conclusion of the public enforcement officer on the sale of immovable property is published on the electronic bulletin board of the Chamber of Public Enforcement Officers. Bidding is held in the office of public enforcement officer, unless otherwise decided by the public enforcement officer. The persons interested in participating in the bidding are obligated to provide security in the amount of 15% of the estimated immovable property value.
The sale of immovable property is performed through no more than two biddings. Should the immovable property fail to be sold at the first bidding (should no bidder place an offer or accept the price), the public enforcement officer will conclude that the bidding has been unsuccessful and schedule a new public bidding. The second bidding will be held after that. The starting price is stated at the bidding after which the public enforcement officer, in the event of acceptance of this price by the participants, announces a price which is higher by 10% until the announced price fails to be accepted, and the bidding is concluded. The immovable property sale price on the first bidding cannot be lower than 70% of the estimated value of immovable property (starting price), while on the second bidding this price cannot be lower 50% of the estimated value of immovable property. After a successful bidding and payment of the price the immovable property is awarded to the buyer.
In the event of lack of success of the second bidding, the enforcement creditor has the option of selling the immovable property through direct agreement or transfer of property rights over the immovable property to the enforcement creditor. The enforcement creditor is obligated to decide on one of these options under threat of suspension of procedure.
The sale of immovable property through direct agreement is accomplished through an agreement between the parties or by choice of the enforcement creditor after an unsuccessful second bidding. In accordance with the agreement between the parties, a contract is concluded between the buyer and public enforcement officer, who shall conclude the contract in the name and on behalf of the enforcement debtor. The enforcement creditor is considered as paid off at the value of the achieved price, and if the price is below 30% of the estimated value of immovable property, then the creditor is considered as paid off at the value of 30% of the immovable property value. In the event of settlement of the creditor through transfer of ownership rights over the immovable property the enforcement creditor is considered as paid off in the amount of 50% of the estimated immovable property value.
Following the finalization of the sales procedure, the enforcement creditor is then paid off. The costs of the enforcement procedure are the first to be paid off from the sale price of the immovable property as are claims based on legal maintenance (generated before the adoption of the enforcement decision), while other claims are being settled in such manner that the claims of the pledgee are settled first, then entities entitled to compensation due to the termination of personal servitudes and actual encumbrances through the sale of immovable property, and finally the enforcement creditors (in order of acquiring their right to settlement).
The law also prescribes the option of enforcement against immovable property which has not been registered in the real estate cadastre. The enforcement creditor is in that case obligated to submit, along with the motion for execution, relevant documents for the registration of title to immovable property in favour of the enforcement debtor (evidence of unregistered property, building permit in the name of the enforcement debtor, or if there is no building permit or it is not in the name of the enforcement debtor – other documents in evidence of the unregistered property in the name of the enforcement debtor). Instead of the registration of the annotation of the enforcement decision, a record of the immovable property inventory is published on the electronic bulletin board of the Chamber of Public Enforcement Officers, while it is specified in the conclusion of the sale that the immovable property is an unregistered property.
