WHAT THE PROSPECTIVE BUYER MUST HAVE IN MIND
Hundreds of auctions are held online every week, with websites and their databases providing information and details of the properties to be auctioned.
These online platforms are equipped with property search filters based on specific criteria such as square meters, area, price level, etc.
In this easy way, any citizen interested in buying a new property can now, from the comfort of his home, visit the respective auction pages, select the property that meets their criteria and then follow the necessary bidding procedure in order to acquire the coveted property.
Note that the acquisition of a property by auction in Greece is particularly enticing, considering that the prices at which the property is finally awarded to the successful bidder are in some cases much lower than they would be in the case of a regular sale.
In any case, any prospective buyer of a property through an auction must not be carried away by the eventually low price of the first bid, considering that the new owner will not be able to know if they have finally secured the ownership of the property safely and lawfully, if they have not followed first the necessary steps to protect their interests. These steps require the assistance of an experienced lawyer.
Among others, before acquiring a property through an auction, an expert lawyer experienced in Banking – Civil Law and the sale and purchase of real estates, should take the following steps to eliminate unpleasant surprises:
Legal check of the property: the legal check identifies the actual owner of the property, as there are cases of usufruct on the property or cases when the debtor has transferred the property to a third party and that transcription appears in the relevant books before its foreclosure. There are only examples of problems that may lead to costly legal battles. Note that the acquisition of property by auction is a derivative right (the successful bidder is the special successor of the debtor), thus according to Article 1036 of the Civil Code, the ownership of a property cannot be acquired from a non-principal, which means that the real owner may request in court the return of the property from the successful bidder, by filing a claim under 1094 CC and 1020 Civil Procedure Code, while the foreclosure cannot be enforced against the new bona fide owner (Civil Procedure Code 997).
A legal check further establishes whether there are third party’s rights in rem such as real or personal servitudes (tenancy, right of passage, usufruct), which will continue to burden the property even after the new owner has been awarded the property, thus limiting their full power over the property.
Legal check of the auction procedure: the legal check of the auction procedure will confirm whether the foreclosure procedure has been carried out as required by law, in order to exclude any possibility of raising a claim (632,933,954 of the Civil Code) to cancel any enforcement actions and prevent any risk of cancellation by a legal claim raised by the indebted old owner.
In the event of such claims, the lawyer in charge of the case should assess their success and advise the prospective buyer accordingly.
Here we must stress that even after the property has been awarded to the successful bidder (new owner), it is possible that a court decision may cancel the enforcement or the auction or even the award. In such case, the property returns to the old owner (the party suffering the foreclosure).
Check whether there is a tenancy: this will check whether the debtor had leased the property to a third party; in such case, the new owner will have to evict the tenant in accordance with the provisions of Article 1009 of the Civil Code after acquiring the property.
Technical inspection of the property: the lawyer, in cooperation with an experienced engineer, will check the overall legality of the property and its potential uses, in order to establish the absence of technical problems with the urban planning service (illegal constructions, arbitrary use of land, use of forest areas etc.)
Eviction procedure after the award (eviction) – Acquisition of the property: during the stage, if the debtor resides in the newly acquired property, the Attorney will have to carry out enforcement actions in cooperation with the Court Bailiff in order to secure the property.
Our experienced legal team and network of associates (engineers, notaries, assessors, brokers), with their expertise in Banking – Civil Law and their long experience in case of sale/purchase of real estates, contracts and real estate auctioning, can prove to be a valuable consultant for those of you who may decide to search for a property through the auction process, safeguarding your interests and restricting the risk involved.
Our experienced legal team and our network of associates (engineers, notaries, appraisers, real estate agents), having training in Banking – Civil Law and many years of experience in cases of sale and purchase of real estate, contracts, real estate auctioning through auction of real estate from red loans, can be a valuable advisor for those persons who decide to proceed with a property purchase investigation through the auction process, in order to safeguard their interests and limit the risks of the risk involved in such an option.
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