Purchasing property via auction
Purchasing property via auction
Although the initial bid price in an auction usually corresponds to the property’s market value and does not always offer exceptional purchasing opportunities, the transparency of the electronic auction system has increased buyer interest. Financial institutions have created a dedicated website (landea.gr) with more information and search capabilities compared to the official public database (e-auction.gr). However, the alignment of the initial bid price with the property’s market value may indicate that there is no significant opportunity, as the forced sale price is typically lower.
Risks for the successful bidder remain. Despite the low adjudication price, the new owner cannot be certain of obtaining secure ownership of the property and may need to face legal disputes. Importantly, with the adjudication of the property and payment of the auction price, liens, mortgages, and seizures are extinguished (Article 1005§3 of the Code of Civil Procedure) and the property is considered “clear.” Nonetheless, it is advisable to verify property titles and seek legal assistance, as insufficient research can lead to serious consequences.
Specifically, it is important to check whether the process of forced execution has been legally adhered to in order to avoid objections against the adjudication. Decisions such as the recent ruling by the Single-Member Court of First Instance of Athens (1057/2019), where the annulment of the seizure report led to the annulment of the auction, underscore the importance of procedural correctness.
Additionally, if the property is leased, the new owner may not be able to evict the tenant immediately. The debtor may have already filed legal remedies against the execution actions or the enforceable title, which could lead to the annulment of the auction. The legislator has established rules for issuing decisions on objections before the auction, but compliance with these rules is often not strict, resulting in delays in decision-making.
Furthermore, the auction process is only the first step in acquiring the property, as the main process also involves securing possession and control. Legal disputes may arise regarding the validity of the auction and the transfer of ownership, especially if the property did not belong to the debtor or if there are hidden encumbrances not extinguished by the auction.
Common issues include “hidden encumbrances,” such as debts from taxes or common services, which are not easily identified without proper inspection. Additionally, the inability to conduct an on-site inspection can lead to surprises regarding the property’s condition.
In summary, the auction process presents significant risks and requires careful legal consideration. Despite electronic transparency, pitfalls remain, and participating in an auction without adequate legal support can have serious consequences. For a safe and successful participation, it is recommended to seek advice from specialized lawyers.
For more information and assistance, contact the real estate lawyers at the law office Economou & Economou in Athens via email at econlaw@live.com or by phone at (+30) 2103603824, or fill out the contact form here. We are available to guide you through all stages of the auction process, from finding a property to complete purchasing property via auction.
