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What is the difference between the purchase of receivables and the purchase of property?

In the purchase of receivables, the buyer purchases the receivables that are secured by agreements, collaterals (bills of exchange, promissory notes, guarantees etc.), i.e. by liens on a property, related to a specific legal and/or natural person.

Therefore, in the case of a lien on a property, the buyer is yet to acquire ownership over the property through enforcement and/or insolvency proceedings, depending on the type of proceedings in which the property is being sold or will be sold.

When buying a property, the buyer acquires the ownership by paying the purchase price and acquiring a Permission to Register the Property, after which they submit a request for the registration of ownership to the competent land registry court and become the owner after the registration in the land registry is complete.

Taking into account the previously stated, the price of the purchase of receivables is always lower than the price of the purchase of property.

There is no singular answer and the exact duration of the proceedings cannot be determined because not all enforcement and/or insolvency proceedings are equally complex, and not all courts are equally prompt in resolving the proceedings in the same time period (the required time depends on the complexity and the number of proceedings the judge is in charge of). The possible time span is between 2 and 5 years.
The buyer becomes the owner by ruling on adjudication becoming legally valid and paying the purchase price in the time period stated in the decision.

The moment of the transfer of possession depends on several factors – for example, if during the enforcement proceedings, a property that is owned by the company against which insolvency proceedings were initiated is purchased, and if the property is already in the insolvency manager’s possession, then the transfer of possession is quick and depends on the agreement with the insolvency manager.

If that is not the case, then the transfer of possession depends on the court, the enforcement debtor’s flexibility and/or third person that is in the property’s possession. Depending on the duration of the enforcement, the proceedings may last anywhere from 6 months to 2 years.

Unless it is stated that the property is bought with its movable property, the movable property will not be a subject of sale, and no ownership is acquired over them, especially because a third party may have a registered lien on that movable property.

During the sale of property through enforcement or insolvency proceedings, among other legally prescribed indications, the indication of a vacant possession of a property is also stated, i.e. whether the enforcement debtor lives with their family members in that property, or if the property is rented or leased.

The vacant possession of a property signifies that the enforcement debtor and/or third person does not live in the property and that there is no furniture or other movable property inside the property, as well as that the property is not rented or leased.

Non-vacant possession of a property means that the property buyer in the enforcement proceedings must become an owner of the property through new enforcement proceedings in order to take over the property.

During insolvency proceedings, the insolvency manager must, immediately after the insolvency proceedings are initiated, take into possession all assets that form a part of an insolvency estate (including properties) and manage them, as well as transfer the ownership to the property buyer.

During the insolvency proceedings, the insolvency creditor and the first creditor with separate satisfaction right, pursuant to Article 247 paragraph 7 of the Insolvency Act, may state that they are buying the property and offset their claim against the insolvency debtor’s claim on the basis of the price in the amount of the determined value of the property.

Pursuant to the minutes of the 30th meeting of the Department for Commercial and Other Disputes of High Commercial Court of 9 November 2017, the first creditor with separate satisfaction right in order of priority does not have to be the bidder in the public auction to give the statement about the purchase of property and offset their claim against the insolvency debtor’s claim for the amount of the price of the property’s determined value.

The statement must be given until the end of the electronic public auction.

Accordingly, the amount can be offset until the end of the electronic public auction at the latest.

During the enforcement proceedings, the enforcement creditor that is the buyer and the only creditor settled from the deposit does not have to pay the deposit if it is the same as their enforcement claim or less.

If the deposit amount is higher than their enforcement claim, the enforcement creditor must pay the difference.

The court decides, in the decision on the award, on the exemption of the buyer from paying the deposit at the buyer’s request submitted to the court no later than the end of the electronic public auction.