Real estate enforcement is a procedure in which a creditor requests the competent court to estimate and sell the debtor’s real estate to satisfy their claims.
According to the provisions of the Enforcement Act, which regulates the enforcement procedure in the Republic of Croatia, the subject of enforcement can only be real estate, determined by the rules governing ownership,
other property law and land registry.
If co-ownership (an ideal co-ownership part of the real estate) has been
established regarding the real estate, that part can independently be the subject of enforcement.
The court determines the value of the real estate based of expert opinion and estimation which is made by an authorized court expert or estimator.
The estimation is made by implementing special regulation in the field of spatial planning, method of data collection and their evaluation, as well as property valuation methods.
The value is then determined at the hearing, after the parties, creditors, participants in the procedure and persons with pre-emption rights have had
the right to express their opinions about the estimation.
It is important to emphasize that the value estimation by the expert often significantly differs from the market value of the property.
Exceptions and limitations
The court will reject an enforcement proposal on the real estate if enforcement is sought to satisfy a secured claim that does not exceed the principal amount of 5,300.00 euros (regardless of the enforcement annotation of the claim in land registry as well as other public registries).
The previous rule does not apply if the proposal is submitted for the forced realization of a claim for legal support, compensation for damage caused by a criminal act, or if the court deems that the sale of the real estate would disrupt the fair balance between the interests of the debtor and the
interests of the creditor.
Procedure
The enforcement procedure on the real estate begins with the submission of an enforcement proposal to the locally competent court in whose area the real estate is located.
After the court accepts the proposal and issues an enforcement decision, it will officially request the entry of an enforcement annotation in the land registry.
The value of real estate is then estimated by a court expert or estimator but only after the parties, creditors, participants in the procedure and persons with pre-emption rights have had the right to express their opinions about the estimation.
After determining the price of the real estate, the sale is conducted by the
Financial Agency through an electronic public auction.
After a successful sale and its finality, when the buyer pays the purchase price, the real estate is transferred to the buyer and the creditors are paid.
It is important to note that at the first electronic public auction, the real estate cannot be sold for less than four-fifths (80%) of the established value, and at the second auction, not below three-fifths (60%) of the established value.
Bids are collected for 10 working days.
If no valid bids are collected at the first electronic public auction, the second electronic public auction begins with issuing the call for bids on the first day after the conclusion of the first electronic public auction.