Enforcement against a property: an ordeal that can be stopped at any stage

In the previous post on mortgages we mentioned what happens when a borrower stops paying the instalments and the matter goes to an enforcement officer. Today we look at that process more closely, because from the debtor’s point of view enforcement against a property is one of the most exhausting experiences the owner of a flat or house can go through. Months of uncertainty, formal letters, strangers visiting your home and the awareness that a clock is ticking in the background the whole time. It is worth knowing, however, that almost to the very end the debtor holds the simplest solution in their own hands: repayment.

When enforcement against a property happens at all

Enforcement against a property does not begin overnight. The creditor must first hold an enforcement title — a court judgment, a settlement or a notarial deed with an enforcement clause — and only with such a document can they file an application with an enforcement officer to commence enforcement against a specific property belonging to the debtor. In practice a property is usually targeted when other, less severe means of enforcement, such as attaching wages or a bank account, are not enough to cover the debt, or where the property secured the claim from the outset, as with a mortgage loan. For the debtor this is the moment when a problem that may until then have been pushed aside suddenly becomes very concrete and very hard to ignore.

Attachment: the first blow and the first trace in the land and mortgage register

The proceedings begin with attachment of the property. The enforcement officer calls on the debtor to pay the whole debt within two weeks and at the same time applies for a note of the commencement of enforcement to be entered in the land and mortgage register. From that moment the legal position of the property stops being the owner’s private business: anyone checking the register, a prospective buyer included, will see that enforcement is under way. That alone can be painful, because at this point it makes a calm, ordinary sale on your own terms considerably harder.

Description and appraisal: a stranger puts a price on your home

If the debt is not paid within the set period, the enforcement officer appoints an expert who draws up a description and appraisal of the property. This is the moment many debtors fear most: a stranger comes into the house, assesses its condition, measures, photographs and prices what is often a lifetime’s work in hard figures for the purposes of the proceedings. The parties may of course raise objections to the description drawn up, but the very fact that the process is under way at all is a source of constant tension.

Notice of auction: a private matter becomes public

The next stage is the public notice of the auction date, announced at least two weeks in advance. The fact that a given property is going under the hammer stops being a secret; it may appear on the court’s notice board or online, and sometimes neighbours or acquaintances find out about it. For many debtors this is the moment when a private financial problem becomes something their surroundings know about, which in itself can be as hard as the debt.

The auction, the knock-down and the award of ownership

If it comes to that, a public auction is held at which the opening price is three quarters of the value appraised by the expert; at a second auction, if the first fails, it is lower still. This means a property that could fetch its full value on the open market is sold in enforcement at a heavy discount. After the auction the court issues an order of knock-down and then, once the buyer has paid the price, an order awarding ownership, which finally transfers title to the new owner. Lastly the enforcement officer divides the sum obtained among the creditors in the established order, and whatever may be left goes to the former owner.

The aim of the whole procedure is to satisfy the creditor, not to punish the debtor, but that distinction is little comfort to someone who loses the roof over their head as a result, often for a price markedly lower than they could have obtained by selling the property themselves and calmly.

Right up to the auction you still have a way out

Here is probably the most important piece of information in this post: at practically every stage of these proceedings, right up to the close of bidding, the debtor may pay the whole debt together with interest and enforcement costs directly into the account of the enforcement officer’s office handling the case. Such a payment leads to the enforcement being discontinued, and the property stays with its existing owner. Importantly, the sooner this happens, the lower the enforcement costs themselves will be, because they grow with the length of the proceedings. In other words, every stage — from attachment, through description and appraisal, to the notice of auction — is still a stage at which the matter can be closed on your own terms, before the auction decides for the debtor.

The problem is that in practice few debtors have cash to hand to repay the whole debt overnight. That is why a realistic way out is often a quick sale of the property, before the matter reaches the auction list. The money from the sale makes it possible to repay the debt in full, close the enforcement proceedings and, if anything is left after repayment, keep that surplus rather than handing it to the enforcement system through a forced auction.

What is worth taking away from this

Enforcement against a property is a long, stressful and often humiliating process that step by step strips the debtor of control over their own affairs: from the entry in the land and mortgage register, through the expert’s visit, to the public notice and the auction. But until bidding closes, the debtor still has a choice. Repaying the debt into the enforcement officer’s account at any of these stages stops the whole procedure, and the earlier it happens, the less it all costs and the less of the process is left on your nerves.

Is enforcement against your property already under way and you can see time running short? Write to us before the auction decides for you. At Remedy we help sell an indebted property quickly for cash, repay the debt into the enforcement officer’s account and close the matter on your own terms, instead of giving the property away for a fraction of its worth.