Explained: Compulsory Enforcement Against Real Estate

Compulsory enforcement against real estate is a legal means used by a creditor to recover a debt established by a final court judgement or a debt instrument. Compulsory enforcement is resorted to in order to strip a property from its debtor owner through the Civil Enforcement Department affiliated with the court within whose jurisdiction the property is located, and to sell the property at public auction so as to enable the creditor to satisfy their debt.

These procedures begin with the registration of an enforcement file with the court’s Enforcement Department, which includes an application for enforcement and the court judgment or debt instrument. The debtor is then served with an enforcement notice and a five-day deadline, in order to give the debtor the opportunity to settle the debt before taking enforcement seizure measures against their assets.

If the deadline passes without payment, the enforcing party (the creditor) or their agent is entitled to request the imposition of enforcement seizure on the debtor’s movable or immovable assets, whichever they choose. It must be taken into account here that if the value of the debt is small and movable assets are sufficient to settle it, enforcement should begin against those assets.

In the case of enforcement against real estate, the enforcing creditor must present a property registration statement for the property belonging to the party against whom enforcement is sought, which is requested to be seized. The enforcing party then requests that an enforcement seizure notation be placed on the property record in the Land Registry. Once the Head of Enforcement issues a decision ordering the seizure, the enforcement officer sends an official letter to the Directorate of Cadastral Affairs to place the enforcement seizure notation on the property record.

Placing an enforcement seizure notation on the property record does not prevent the owner against whom enforcement is sought from disposing of the property to a third party. However, the enforcing creditor may continue the enforcement procedures against the property.

After the seizure, the enforcing party must request that the Enforcement Department notify the debtor of the impending sale of the property, which gives the debtor a new opportunity to avoid the sale by paying the outstanding debt within eight days.

In the next step, the enforcing party requests taking possession of the property in order to ascertain its actual condition in preparation for offering it for sale at public auction. This requires the issuance of a decision by the Head of Enforcement at the court and the assignment of the enforcement officer to carry out the possession process with the assistance of one expert or three experts designated by the enforcement officer.

The enforcement officer then goes with the experts to the location of the property to describe it, assess its value, identify its occupants, and verify the occupancy document, such as whether the property is rented.

If it is found that there is a discrepancy between the description of the property in reality and that recorded in the Land Registry, the Head of Enforcement examines whether the property is capable of correction of minor descriptions, including measurement errors. In that case, the Head of Enforcement issues a correction decision together with the final referral decision after the auction is awarded.

If, however, the property is not capable of correction, such as properties located in areas of violations, it is sold in its existing condition without the correction of the descriptions.

After that, the enforcing party requests the preparation of the list of conditions of sale, which includes a statement of the type of enforcement instrument, identification of the property (record number and cadastral zone) and its descriptions (boundaries and area), as well as the value assessed by the experts. The application must be accompanied by a statement of the property tax and a copy of the property registration statement or ownership document of the party against whom enforcement is sought.

The list of conditions of sale is notified via the court’s notice board to enable the public to view it, and it must also be notified to the holders of notations recorded on the property record in the Land Registry, in order to give them the opportunity to object to the list of conditions of sale at least three days before the session set to hear objections.

The notification clarifies the seized property’s real estate number, its assessed financial value, and the date of the objections session. The party against whom enforcement is sought may also object to the list of conditions of sale, including objecting to the enforcement instrument, or to the impermissibility of seizing the house because it is the debtor’s sole residence. In such a case, the law does not permit enforcement against the sole residence of the party against whom enforcement is sought, unless it exceeds their housing needs, in which case that residence is sold and part of the amount is allocated to purchase an alternative residence sufficient for their family.

Objections to the list of conditions of sale by interested parties must be submitted at least three days before the session for considering objections by the Head of Enforcement, who then rules on the objections by a final decision.