1. Publication and determining prices for the sale of seized assets
Movable property, immovable property and rights are sold at public auctions in enforcement and other judicial proceedings, with the rules of enforcement proceedings being applied to the sale of assets. In Slovenia, judicial auctions are held in the traditional format and online as well.
While it is not yet possible to sell assets in bankruptcy proceedings in Slovenia via a single online portal, as is the case with the sale (with the exception of the sale of movable property) and announcement of sale in enforcement proceedings, online public auctions of a bankruptcy debtor’s assets may be held by external providers that operate on the market. This method of sale (online public auction) is already in place for insolvency proceedings and is being made use of by administrators.
Enforcement against movable property is executed by means of the seizure and valuation of the property, its sale, and payment of the proceeds of sale to the creditor (Article 81(1) of the Claim Enforcement and Security Act (Zakon o izvršbi in zavarovanju), hereinafter: ZIZ).
Seizable property includes property in the debtor’s possession as well as debtor’s property in the creditor’s possession. Debtor’s property in the possession of third parties may be seized with the third party’s consent (Article 83 of ZIZ).
Upon seizure, a creditor obtains a lien on the seized property (Article 87 of ZIZ). In cases involving the seizure of movable property entered in the register of non-possessory liens and seized movable property, the lien is obtained upon entry of the seizure in the register (Article 87 of ZIZ).
Expert valuation of seized assets.
The property seized is valued on seizure, unless this valuation cannot take place straight away due to the special value of the property or if the seizure of movable property entered in the register of non-possessory liens and seized movable property is involved. The valuation is made by the enforcement agent who executed the seizure. On request and with the cost paid by a party, the valuation can be made by a court expert selected by the party (Article 89 of ZIZ). The sale of seized property may take place only after the decision of enforcement becomes final, unless the debtor consents to the sale of the property earlier or the property is perishable or if there is a risk that the value of the seized property would drop significantly (Article 92 of ZIZ).
The seized property is sold at a public auction or under a direct contract between the buyer and an enforcement agent or an individual engaged in commission transactions. The public auction may also be held online (online public auction). The manner and the date of sale of the property is determined and noted by the enforcement agent in the seizure record immediately after the seizure, taking into account the principle that the best possible price is to be obtained (Article 93 of ZIZ). If an enforcement agent decides on a public auction, the date and the place of the public auction is added to the record. An enforcement agent informs the parties of the manner and the date of sale of the property by a special notice served on the creditor and the debtor (Article 82 of the Rules on the performance of bailiff services (Pravilnik o opravljanju službe izvršitelj)).
Publication of sale. If an enforcement agent decides that property is to be sold at a public auction, they send the court an announcement of the public auction at least eight days prior to the start of the public auction and the court publishes it on the court noticeboard. The enforcement agent must publish the announcement and a photograph of the property in the search engine for movable property sales, and enter information on the movable property in that search engine (Article 93 of ZIZ). The enforcement agent announces the public auction on the court noticeboard and on the website of the competent authority that issued the decision on seizure. The enforcement agent must request that the announcement of public auction also be published in an official register if such a register exists. If proposed by a creditor or debtor, an enforcement agent may also announce a public auction in the media upon payment of costs by the party seeking the public auction (Article 89 of the Rules).
Option to view assets being sold. An announcement of a public auction must specify the place, date and time of the auction, state and describe the property to be sold and state where the property can be viewed before the auction (Article 89 of the Rules on the performance of bailiff services). Interested buyers may also search for subjects of sale in enforcement proceedings and view photographs of the property in the search engine for sales on the e-dražbe (online auctions) portal at SodneDrazbe.si. Assets being sold may be searched for and viewed under the following criteria: court, case number, form of sale, method of sale, type of sale, start date of sale, publication status, subject of sale, subject type, town, region and starting price. The search may also be performed by entering text in the relevant text entry box.
Deposit. Before a public auction starts, an enforcement agent must determine if the nature and the value of the property is such that participants in the auction are required to pay a deposit, which may be no higher than 10 % of the starting price for the property.
Person or company managing the sale. A public auction is conducted by an enforcement agent who may, at own cost, authorise an auctioneer to auction items if the amount and quality of the property makes that necessary. The auction is open to the public (Article 92 of the Rules on the performance of bailiff services).
Starting price. At the first auction, seized property may not be sold below its appraised value. If the appraised value is not reached at the first auction, an enforcement agent conducts a second auction if proposed by a party and in the second auction the property may be sold below its appraised value but not for less than one third of that value (Article 94 of ZIZ).
Making offers and allocation. At least 15 minutes after an auction starts, an enforcement agent invites the auction participants to make offers (bidding). The auction continues until all interested participants have made their bids. An enforcement agent gives the property to the highest bidder if no higher bid is made after making two calls to participants for a higher offer. If the buyer does not pay the purchase price by the end of the auction, the enforcement agent may sell the property to the next highest bidder if the creditor agrees by signing the Record of Auction. If the creditor is not present at the auction, the enforcement agent may sell the property immediately to the next highest bidder if their bid is at least 50 % of the best offer but higher than the starting price; otherwise, the enforcement agent offers the property for bidding again during the same auction. The previous highest bidder may no longer participate in the repeated bidding (Article 94 of the Rules on the performance of bailiff services).
Payment of the purchase price and the taking possession of the property. A buyer must pay the purchase price and take possession of the property immediately after the auction is completed. An enforcement agent must provide the buyer with a document with information on the sale and information kept in a register, if a register of sold property is kept. On the basis of this document, the enforcement agent deletes any encumbrances and/or prohibitions on the sale of the property, and registers the new owner in cases where an ownership rights are recorded in the register. An enforcement agent may transfer the property to the buyer even before the purchase price was not paid if permitted to do so by the creditor, at its own risk, for the amount the creditor is entitled to of the purchase price. If the buyer does not pay the purchase price and the creditor does not consent to property being handed over, the enforcement agent may sell the property to the next best bidder. The buyer acquires property free of all encumbrances and becomes the owner of the property even when the debtor was not the owner of the property. The buyer does not have the right to a guarantee against defects of the property (Article 96 of ZIZ).
Property and other material rights.
The sale of property and other material rights is conducted by an enforcement agent in accordance with the provisions of the Rules on the performance of bailiff services that govern the valuation and sale of movable property. The enforcement agent draws up an inventory of the seized rights in accordance with the provisions of these Rules governing the seizure of movable property. The inventory describes the rights precisely by substance and extent, with due regard to the documents that exist in relation to this right, and sets out what the debtor is obliged to give or do as a consideration or service for the exercise of these rights (Article 108 of the Rules on the performance of bailiff services).
Enforcement against immovable property takes place by registering the enforcement decision in the Land Registry, determining the value of the immovable property, selling it, and paying the creditor from the proceeds of sale (Article 167 of ZIZ).
Expert valuation of seized assets. The value of immovable property may be determined by a court even before the decision on enforcement becomes final. The value of immovable property is determined by a court on the basis of a valuation by a court expert, in accordance with the market value applicable at the time of valuation. When determining the value, any possible reduction of the value because of a particular right, e.g. easement (Article 178 of ZIZ), which may arise after the sale is taken into account. The value of immovable property is determined by a court decision against which an appeal is allowed (Article 179 of ZIZ).
Publication of sale. After a decision determining the value of immovable property becomes final, the court issues an order for the sale of the immovable property. In this order, it determines the manner and the conditions of sale, as well as the time and the place of sale if the immovable property is to be sold at an auction. The sale of immovable property takes place after the decision of enforcement and the decision on determining the value of the immovable property become final. The order for sale is announced by a court on the court noticeboard and on its website as well as via other established local means. An order for sale of agricultural land is announced by a court on the noticeboard of the administrative unit where the immovable property is situated and it can also be announced on the website of that administrative unit. The creditor may publish the order on sale of immovable property in the media. The costs of publication are charged to the creditor. At least 30 days must pass from the time the order for sale is announced on a court noticeboard until the day of the sale. The court serves the order for sale on the parties, the lien creditor, other participants in the proceedings who have a registered pre-purchase or redemption right, and on the competent administrative authority (Article 181 of ZIZ).
As a general rule, immovable property is sold at public auction. A public auction is conducted as an online public auction, unless the judge considers it more appropriate for the immovable property to be sold at public auction. The judge may also decide that a public auction for the sale of immovable property should be conducted even if no bidder has registered for the first online public auction. Unless the court decides otherwise, a public auction for the sale of immovable property is conducted at the court’s premises. Creditors, lien creditors and creditors of land debt may, throughout the enforcement proceedings until the order for sale is issued, agree that the immovable property be sold by collecting binding offers or under a direct offer (Article 183 of ZIZ).
An order for sale of immovable property includes:
- a detailed description of the immovable property, including fixtures and fittings;
- an easement building right and encumbrances in rem which the buyer must accept;
- the value of the immovable property as identified by the court in its decision;
- the price for which the immovable property may be sold;
- the deadline by which the buyer must pay the purchase price;
- the manner of sale; and
- the amount of the deposit to be paid by the bidder (Article 184 of ZIZ).
Option to view assets being sold. A court may allow a person interested in buying immovable property to view the property upon request and at own cost. The method and the manner of viewing and any presence of an enforcement agent is determined by the court in the order for the sale of the immovable property (Article 176 of ZIZ). Interested buyers may also search for subjects of sale in enforcement proceedings and view photographs in the search engine for sales on the e-dražbe (online auctions) portal at SodneDrazbe.si. Assets being sold may be searched for and viewed under the following criteria: court, case number, form of sale, method of sale, type of sale, start date of sale, publication status, subject of sale, subject type, town, region, floor, surface area, number of rooms, year of construction, company in which the shareholder has a stake, and starting price. The search may also be performed by entering text in the relevant text entry box.
Deposit. Public auctions may be attended by those who paid a deposit in the amount of one‑tenth of the determined value of the immovable property at least three working days prior to the auction. The creditor, upon whose proposal the court had allowed the auction, is exempt from paying the deposit, as is a lien creditor or a creditor of land debt if their claims exceed the value of the deposit and if the deposit could be covered from the purchase price with regard to their payment priority order and the determined value of the immovable property. In the case of an online public auction, exemption from payment of the deposit must be proposed three working days prior to the start of the online public auction. The deposits of bidders whose offers were not accepted are repaid to their bank accounts within 15 days after the public auction is completed or after the proceedings for opening offers are completed, unless otherwise provided by the law (Article 185 of ZIZ).
Starting price. At the first sale, immovable property may not be sold for less than 70 % of its determined value. If the immovable property is not sold at the first sale, the court announces a second sale at the creditor’s proposal where the immovable property may not be sold for less than half of its determined value. There must be at least 30 days from the first to the second sale. By giving a statement on the record at the court where enforcement proceedings are taking place or at any other court, the parties, the lien creditor or the creditors of land debt may agree that the immovable property be sold at the auction for less than 70 % of its determined value at the first sale or for less than half of its determined value at the second (Article 188 of ZIZ).
Sale at auction and allocation. When a court determines that the conditions for sale are met, it announces that the auction will commence. The auction lasts as long as bidders raise their bids. A bidder is bound by its bid until a higher bid is made (counter offer). Upon the request of one or more creditors, the court may allow a short break for the participants’ consideration. The auction is completed when bidders do not offer a higher price after the judge has twice called on them to do so. When the auction is finished, the court identifies which bidder has offered the highest price and declares that the immovable property be allocated to that bidder. The court issues a decision on the allocation of the immovable property which is served the parties served with the order for sale and all auction participants. There is no appeal against the decision on allocation. Irregularities at the auction may be addressed in an appeal against the decision on the allocation of the immovable property to the buyer (Article 189 of ZIZ).
Paying the purchase price. After allocation, the buyer must pay the purchase price within the deadline set in the order of sale (Article 191 of ZIZ). This deadline may be no later than six months after the date of the sale, irrespective of whether the purchase price is paid in one payment or in instalments (Article 184 of ZIZ).
Transfer. After the decision on allocation is issued, the purchase price is paid and the court issues a decision by which the immovable property is handed over to the buyer (transfer). After this decision is final, the buyer’s ownership right is registered in the Land Register, and rights and encumbrances are deleted, according to the decision on the allocation. In the decision, the court also decides by when the debtor must move out of the family house or apartment or empty business premises. The decision on handing over the property is also an enforceable title for vacating and handing over the immovable property, and it becomes enforceable after it becomes final (Article 192 of ZIZ).
Online public auction of immovable property. The amended ZIZ-L (UL RS, No 11/18) has introduced a number of changes to the way online public auctions are conducted. This area is regulated in detail by the Rules on announcements of sales in the online search engine and online public auctions in enforcement proceedings (Pravilnik o objavah prodaj v spletnem iskalniku in spletnih javnih dražbah v izvršilnih postopkih, UL RS, No 195/20). Online judicial auctions may be accessed at: SodneDrazbe.si.
Registration for an online public auction and approval of registration. An interested buyer registers for an online public auction via the e-dražbe portal using an SI-PASS account, chooses the role in which they will appear as a bidder (e.g. as a bidder or as a bidder who is at the same time a creditor, lien creditor or creditor of land debt, or as the holder of a pre-emptive or redemption right), provides details of the account to which a returned deposit is to be repaid (if this is different from the account from which the deposit was paid), and indicates whether they are claiming exemption from the payment of a deposit (if so, they enclose a proposal for exemption). For property to which special conditions for purchase apply, they must also submit documents that show that they meet these special conditions. If a deposit has to be paid for participation in an online public auction, the amount of the deposit, the reference number that is to be attached to the payment and the account to which the deposit is to be paid is sent to the interested buyer when they register for the online public auction within the e-dražbe portal system. If several interested buyers together wish to purchase a subject of sale at an online public auction, only one of the buyers registers for the online public auction and encloses with the registration those documents that show the shares by which the interested buyers will take possession of the subject of sale, and an authorisation to take part in the online public auction on behalf of the other interested buyers. After examining the registration for the online public auction and checking whether the interested buyer has paid the deposit, the author of the announcement approves or rejects the registration and informs the interested buyer of their decision within the e-dražbe portal system. If registration is rejected, a reason for rejection must be provided.
If registration is approved, the bidder is assigned a unique code number within the e-dražbe portal system under which they participate anonymously in the online public auction.
Course of an online public auction. An online public auction is commenced automatically at the time determined in the order for sale or in the online public auction announcement as the time of its commencement, and lasts for as long as is determined in the order for sale or in the online public auction announcement. The bidder raises the starting price or currently most favourable bid by at least the bid increment determined in the order for sale or in the online public auction announcement. If the bid increment is not determined, the bidder may raise the bid by an amount determined by them. During the online public auction, the bidder is notified of the current best bid in the e-dražbe portal system and informed of whether their bid is currently the best bid. If a bid is made two minutes prior to the end of the online public auction, the duration of the auction is extended (on each occasion) by an additional two minutes.
Report on the course of the online public auction. After an online public auction is completed, a report on the course of the auction is automatically generated. It is available to bidders within the e-dražbe portal system in anonymised form and to the authors of the announcement in non-anonymised form.
Sale of a right/shareholder’s participating interest
Enforcement against a shareholder’s participating interest takes place by registering the enforcement decision, selling the participating interest and paying the creditor from the proceeds of sale. With the enforcement decision, the court prohibits the shareholder from disposing of their participating interest. The court serves the enforcement decision on the company and registers it in the Court Register of Companies. With this registration, the creditor acquires a lien on the shareholder’s participating interest. The lien shall also apply against any person that subsequently acquires the participating interest. The provisions of this act regarding enforcement on immovable property (Article 164 of ZIZ) are applied mutatis mutandis to enforcement on a shareholder’s participating interest. As with immovable property, the participating interest of a shareholder may be sold at an online public auction.
2. Third parties conducting the sale
Movable property is sold at a public auction by an enforcement agent who may, upon own costs, authorise an auctioneer for bidding if necessary, based on the amount and quality of the movable property. The sale at the auction is public (Article 93 of ZIZ and Article 92 of the Rules on the performance of bailiff services).
Movable property may also be sold by direct agreement between a buyer and an enforcement agent or through an individual engaged in commission transactions. The manner and the date of sale of the property is determined and noted by the enforcement agent in the seizure record immediately after the seizure, taking into account the principle that the best possible price is to be obtained (Article 93 of ZIZ).
Public auctions of immovable property are conducted by judges. Online public auctions of immovable property are conducted in an automated manner on the SodneDrazbe.si online portal.
3. Types of auctions to which rules may not fully apply
Slovenian law does not recognise any other types of auctions in enforcement proceedings. In bankruptcy proceedings, Slovenian law permits, in addition to the option of an online public auction, a public auction with the raising and a public auction with the lowering of the starting price. There are also different ways of selling movable and immovable property. Movable property may be sold under a direct contract between a buyer and an enforcement agent, an administrator or an individual engaged in commission transactions instead of at a public auction (Article 93(1) of ZIZ). Immovable property is sold at a public auction if creditors, lien creditors and creditors of land debt do not agree by the time an order for sale is issued that:
- the immovable property is to be sold by collecting binding offers; or
- the immovable property is not sold under a direct contract within a certain period of time (Article 183 of ZIZ).
4. Information on national property registers
In Slovenia, there are the following property registers:
- Land Registry for ownership rights and other rights in rem on immovable property;
- Register of motor vehicles;
- Slovenian Register of Shipping;
- Register of Aircraft;
- Register of book-entry securities;
- Register of non-possessory liens and seized movable property, register of bank accounts;
- Register of recipients of salaries and other personal income (for example, pensions).
These registers are kept electronically. A specific institution is responsible for each one.
Access to these registers is made available to anyone demonstrating a legal interest (Article 4(6) of ZIZ). A creditor may demonstrate a legal interest by presenting an enforceable title (for example, an enforceable judgment), by which the debtor was ordered to pay the creditor’s claim. In such a case, the creditor may request information on the debtor’s property from the operator of the register. Courts have electronic access to many of these registers.
To obtain information from these registers, it is not necessary to pay court fees, however some operators of these databases (registers) may request that creditors pay a small fee (for example, the Health Insurance Institute of Slovenia (Zavod za zdravstveno zavarovanje), which maintains the register of payers of salaries and other personal income (such as pensions) requires a payment of EUR 4.00 to obtain information on a debtor’s employment). The payment may also be made electronically.
5. Information on databases helping creditors find assets and claims of debtors
An operator of a database must, under Article 4(6) of the ZIZ, convey information on debtors’ assets to creditors upon their request, when the creditor has demonstrated a legal interest (for example, an enforceable title). These operators are:
- The Health Insurance Institute of Slovenia conveys information on payers of salaries and other personal income (for example, pensions);
- The Agency of the Republic of Slovenia for Public Legal Records and Related Services (Agencija Republike Slovenije za javnopravne evidence in storitve) (AJPES) provides information from the bank accounts register;
- The Central Securities Clearing Corporation (Centralna klirinško depotna družba d.d.) (KDD) conveys information from the book-entry securities register;
- the court maintaining the Court Register conveys information on shares in undertakings and on other participation in legal entities. Access to the Court Register is also available electronically through its website;
- the court maintaining the Land Register provides information on immovable property over or concerning which a debtor has a property right;
- The Ministry of the Interior provides information from the records of registered motor and trailer vehicles;
- The Slovenian Maritime Administration provides information from the Register of Boats (boats smaller than 24 m);
- The Civil Aviation Agency provides information from the register of aircraft.
In most cases, a creditor can access a register by requesting information on the debtor’s assets from the register’s operator. A creditor may access certain registers (for example the Court Register) electronically (via website).
Representation by a lawyer is not necessary to obtain information on debtors’ assets and taxes to the State are not payable. Certain operators of databases do request a small fee (for example, the Health Insurance Institute of Slovenia) of EUR 4.00 for information on debtors’ employment. The fee may be paid electronically.
6. Information on on-line court auctions
Since 1 February 2021, judicial auctions of immovable property and rights in enforcement proceedings have, as a general rule and pursuant to the Order on fulfilment of the technical conditions for the use of the online search engine for sales and for the implementation of online public immovable property auctions in enforcement proceedings (Odredba o izpolnitvi tehničnih pogojev za uporabo spletnega iskalnika prodaj in izvajanje spletnih javnih dražb nepremičnin v izvršilnih postopkih, UL RS, No 3/2021), been conducted online under the rules set out in the Rules on announcements of sales in the online search engine and online public auctions in enforcement proceedings (UL RS, No 195/2020).
Access to information on subjects of sale is free of charge. Registration via the SI-PASS system makes participation in an auction possible regardless of the participant’s current location. It also guarantees the participant’s anonymity.
Access to the website is available at https://sodnedrazbe.si/.
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