Seizure of real estate for debts is a fairly common collection measure today, regarding non-payers and no matter what type of debt has developed over a long time.
And if previously the actions affected exclusively movable real estate and money, then in 2020 a resolution was adopted to arrest the debtor’s only home. However, despite the significance of the tactics, the implementation of seizure takes into account a number of features. Therefore, the debtor should not immediately become depressed that the financial institution will take away the housing for debts.
Official list of persons from whom they will be able to take away their only living space
The Ministry of Justice clarified that in this case the market value of the property will be taken into account.
The final verdict on the seizure of living space will be made by the judge. In this case, he will necessarily take into account the fact whether the debtor still has any property or does not have it, as well as the amount of his total income.
If a decision is made to take away the housing from the borrower, the judicial institution must assign an amount of compensation with which the individual will be able to purchase another property.
This draft legislative act has been published and is open to public discussion. If he gets votes in his favor, he will be accepted. Such a law will apply only to relations arising after it enters into force. Exceptions here will be situations requiring compensation for harm caused to life and health, as well as alimony debts.
Can bailiffs seize a land plot registered with a mortgage?
Property that cannot be levied under enforcement documents1. Execution under executive documents cannot be applied to the following property owned by a citizen-debtor by right of ownership: - residential premises (parts thereof), if for the citizen-debtor and members of his family living together in the owned premises, it is the only one suitable for permanent residence on the premises, with the exception of the property specified in this paragraph, if it is the subject of a mortgage and foreclosure may be made on it in accordance with the legislation on mortgage; - land plots on which the objects specified in paragraph two of this part are located, with the exception of what is specified in in this paragraph of the property, if it is the subject of a mortgage and foreclosure can be made on it in accordance with the legislation on mortgages; I would like to clarify with you that this house is not by chance being built with maternity capital funds!? GOOD SUCCESS TO YOU I HOPE YOUR POSITIVE FEEDBACK.
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Since the debtor himself does not bring money, the funds are withdrawn from the accounts. It turns out that if the payment is late, the client is obliged to repay the loan ahead of schedule, plus accrued penalties. At the same time, the guardianship authorities can give consent if the parents have other residential property.
Cases in which bailiffs can seize real estate
Often, many people confuse the concepts of foreclosure on property and seizure of real estate. They have different concepts. In the first case, the debtor is evicted from the living space, and it is put up for public auction. The amount from the sale of real estate will be used to cover debts.
Arrest implies the imposition of restrictions due to which the debtor will not be able to dispose of housing. At the same time, he has every right to live in it. You can replace the foreclosure of real estate with its arrest in the following cases:
- If the defaulter complies with all the rules of living in the apartment.
- If the debtor specifically avoids paying existing debts.
- If there is a need to prevent the occurrence of various real estate transactions by the debtor.
A certain share of the living space may also be subject to seizure. Here the bailiff must appeal to the court. The judge will decide on the allocation of a specific share of the debtor in kind. In other words, he will indicate the part of the apartment, its area and purpose. Based on this document, a resolution and act will be drawn up during the seizure process.
Foreclosure
Foreclosure of real estate is carried out only in extreme cases, when the defaulter has no other ways to pay off his creditors. First of all, the citizen’s funds are blocked on his accounts and cards, then his property is sold and he is required to contribute part of his monthly earnings to pay off the debt.
The initiator of the lawsuit is creditors or bailiffs.
The court then imposes restrictions on manipulations with real estate and becomes familiar with the situation within 2 months. By law, the court is obliged to listen to the arguments of both sides and then make an appropriate decision.
Experts are entrusted with assessing real estate. It is at the price they offer that the apartment is put up for sale. After the sale of the property, the debtor is given a 2-week period to vacate the property.
How is a single residential premises seized?
A decree to seize the debtor's property is issued at the request of the applicant or government agency. After which it is transferred to the bailiff service, which will seize it and will deal with its implementation in the future.
Note! A citizen should not be afraid of various calls from credit institutions demanding that they leave their property. Collection of property can only be carried out by bailiffs, the same applies to eviction from an apartment.
The classic process for seizing real estate is as follows:
- The bailiff notifies of a court order, according to which the debtor's property will be seized.
- Initially, all bank accounts of the defaulter are seized. If there are not enough funds for them, then the right to arrest may transfer to other property, including living space.
- The bailiff personally comes to the defaulter. An act will be drawn up on the spot in the presence of witnesses.
In the process of repossession of real estate, it is necessary to indicate to whose benefit it will then pass (address and contact details of the institution), as well as who is carrying out the procedure (last name, first name and patronymic of the employee). At the end, it is necessary to put the signatures of all participants in the process. Then the bailiff must make a photocopy of the document: one copy must remain with the defaulter, and the second must be given to the lender.
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As we said above, arrest is not a reason for eviction from an apartment. The debtor and his family have every right to live in it. The main purpose of arrest is to avoid various manipulations with real estate: sale, exchange, donation.
Expert opinion
Mikhailov Evgeniy Alexandrovich
Teacher of civil law. Lawyer with 20 years of experience
If an individual owns several properties, the bailiff can seize one of them. Subsequently, it will be sold at public auction to cover existing debts.
Can bailiffs take away a plot of land with a house for a fee?
If the amount is not enough, then the seizure of property begins, which is first confiscated, then appraised and sold at the lowest price. The funds received are transferred to the lender. The sale of property is not carried out by the bailiff himself, but by special organizations.
It is also difficult to recover real estate from a defaulter if it has several owners. If the debtor has several shares of property, the court makes a decision to arrest with the right to subsequently sell a share in one of the apartments.
In what situations can a debtor lose his real estate?
The Ministry of Justice is currently considering changes to the bill. If they are approved, the defaulter may lose his only living space. The following persons will have to part with their apartment:
- Who avoid paying alimony by all means.
- Who are obliged to compensate for financial damage caused to life and health, as well as as a result of criminal acts or in the event of the loss of a breadwinner.
Important! The total amount of debt should not be less than 200,000 rubles and be commensurate with the value of the property. The area per person must also be taken into account here - more than 36 square meters.
For example, if a defaulter has a small one-room apartment, then he may not be afraid of losing it. But if he owns spacious apartments, then they can be confiscated. In this case, he will be given real estate, but of a smaller area.
But this bill is still only under consideration. Let's take a better look at real cases when you can lose your only home.
Mortgage credit lending
A fairly common occurrence when you can lose real estate is mortgage lending, namely non-payment of installments on it. In this situation, the credit institution has the authority to sue the defaulter in court with a demand to seize the living space in order to pay off the resulting debt. It does not matter here whether the debtor owns several apartments or only one. But for a defaulter there are still certain conditions for eviction:
- You cannot evict a person from an apartment if the total amount of debt is less than five percent.
- Payments are overdue for less than three months.
Expert opinion
Mikhailov Evgeniy Alexandrovich
Teacher of civil law. Lawyer with 20 years of experience
Let's look at an example: a person cannot pay mortgage payments because he lost his permanent job. Because of this situation, he owed the credit institution an amount of 40,000 rubles. The bank filed a lawsuit against the debtor to collect the mortgaged apartment, the cost of which is 2,000,000 rubles, against the debt. But the judge rejected the claim because the amount of debt is much less than the value of the property.
In the life of every person there are various unpleasant moments: loss of a job, illness, etc. In such situations, it is recommended not to hide from creditors, but with their participation to look for ways out of a difficult life situation. The best option here is to contact a banking institution. Here you can submit an application:
- For debt restructuring. Here you increase the mortgage repayment period by reducing monthly payments.
- To provide “mortgage holidays”. Here the credit institution exempts the person from payments for a certain time and does not charge interest for this.
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Not long ago, the State Duma adopted a bill on providing “mortgage holidays”. Here, borrowers will be able to take out a certain interval in which they do not need to make monthly loan payments. The maximum period is 6 months. At the same time, it became possible to change the payment schedule.
After accepting the application, the bank issues official approval for the deferment of contributions. And then citizens can switch to a new payment schedule.
It is also possible to take out another loan against the same mortgaged property. But first, make sure there are no provisions in the first mortgage agreement that exclude this right. In this case, you can pay off the debt in one bank and pay with another.
Child support debts
Seizing the property of a person who is trying in every possible way to hide from alimony is a very realistic measure. If the total amount of debt is comparable to the value of the debtor’s living space, then a bailiff can easily do this.
For example: a parent has not paid child support for a long time. As a result, he accumulated a debt of 900,000 rubles. He has no other property besides the apartment. The bailiff sends an official request to Rosreestr. There he learns that not long ago the debtor received an apartment under an inheritance agreement. Its cost is comparable to the amount of debt. Here, the bailiff seizes the property and then puts it up for auction in order to pay off the debt.
Can the debtor's only home be taken away for debts?
In short, yes, they can. More precisely, the debtor’s home (even if it is his only one) can be foreclosed on for his debts, be it for a loan to a bank, for compensation for damage caused, for alimony or for some other obligation.
The current Kazakh legislation does not contain restrictions regarding the foreclosure of a single dwelling; it is not included in the property that cannot be foreclosed on.
The only concession for debtors belonging to socially vulnerable segments of the population is that they cannot be evicted during the heating season (clause 3-1 of Article 29 of the Law of the Republic of Kazakhstan “On Housing Relations”).
However, the situation may change. The fact is that the Ministry of Finance has developed a bill on bankruptcy of individuals - a document that is undoubtedly necessary and eagerly awaited by many debtors. So, one of the provisions of the bill allows, under certain circumstances, to foreclose on the debtor’s only home.
According to its version, foreclosure cannot be applied to the debtor’s only home if at the same time:
it is not the subject of a pledge; the size of its usable area does not exceed the established standards for one resident debtor and his dependents (currently it is 18 square meters per resident); the amount of the principal amount paid under the loan agreement was more than 50% as of the date of opening the process of restoring solvency.
For example, a borrower bought an apartment with credit money, registering it as collateral to the bank. The apartment is small in size and does not exceed the standard. If the principal amount of the debt is 16 million tenge, the borrower only needs to pay more than 8 million tenge to the bank - and the apartment will no longer be taken away.
The banking sector has already expressed disagreement with the proposed bill in this part, pointing out that its adoption in this form will inevitably exclude lending secured by a small-sized home: accepting such collateral will become highly risky for them. Bankers warn that the “7-20-25” mortgage program, aimed primarily at lending to such housing, may be under threat. Compliance with such a lending principle as loan repayment is called into question.
It should be noted that the question of the possibility, roughly speaking, of taking away the only housing for debts has always been quite controversial and painful, and not only for us.
The approach of legislators in different countries in solving this problem is different. In some countries, the law by default allows for foreclosure on a single home (Great Britain, France, Spain, Italy, Switzerland, Estonia, Latvia), in others it prohibits this, although with some exceptions (Russian Federation, Brazil, Belarus, Turkmenistan, Uzbekistan, Sweden, Portugal), in others it allows, but with the preservation of the debtor’s right to use housing (Austria, Belgium, Germany, Liechtenstein).
Well, the question is indeed a difficult one. Even if we put emotional rhetoric aside, the legal aspect of this problem is also quite complex.
Firstly, the interests of the creditor require that the law does not contain any obstacles to foreclosure on the debtor’s only home. The creditor has a reasonable right to demand full satisfaction of his claim from the debtor. If the latter owes it, let him answer to the creditor with all his property, including housing. This follows from the legal principles of ensuring the restoration of violated rights and the conscientious fulfillment of obligations (Articles 2, 8 of the Civil Code).
Secondly, the impossibility of foreclosure on the only housing actually means the impossibility of full execution of the judicial act of recovery in favor of the creditor under a civil obligation: there is a court decision to collect the debt from the debtor, but it cannot be executed due to the specified limitation. Thus, everyone’s constitutional right to judicial protection and the constitutional principle of mandatory judicial acts on the territory of the republic are undermined (Article 76 of the Constitution).
Thirdly, exceptions of this kind undermine the stability of property turnover, since its participants lose confidence in the proper performance by counterparties of their obligations and the ability to protect their violated property rights and interests. This kind of exclusion of debtors’ liability can serve as a demotivator for the proper fulfillment of their obligations, facilitating unscrupulous debtors to ignore the legal requirements of creditors.
However, on the other hand, the Constitution says that “in the Republic of Kazakhstan, conditions are created to provide citizens with housing” (clause 2 of Article 25). Let us draw attention to the fact that our Constitution, unlike the Russian one, does not guarantee everyone’s right to housing. But even in this version, supporters can see the grounds for a constitutional restriction on the deprivation of the only housing: since the state creates conditions for providing citizens with housing, therefore, it must create conditions that do not allow the deprivation of citizens of housing.
In addition, a person is the highest value for the state, his dignity is inviolable (Articles 1, 17 of the Constitution). Deprivation of a single home is hardly consistent with the internationally recognized right of everyone to a decent standard of living, as proclaimed by Article 25 of the Universal Declaration of Human Rights and Article 11 of the International Covenant on Economic, Social and Cultural Rights.
As you can see, the raised issue of single housing is far from ambiguous from a legal perspective. Both points of view stated above have their justification. As always, it is important to find a balance, that “golden mean” that would allow taking into account the interests of the creditor and debtor from a position of fairness.
Lawyers have this thesis: “Property obliges.” This means that property rights are not only the right of everyone to own, use and dispose of property; this is also the obligation (ability) to answer them for one’s obligations, including with all one’s property. Property should give rise to a responsible attitude of citizens towards the exercise of their civil rights and responsibilities. Misunderstanding of this side of property, indulgence in avoiding responsibility for one’s debts - all this leads to the cultivation of dependent sentiments in society, paternalism (the belief that the state will solve all the citizen’s problems).
It is curious that in the Russian Federation, unlike us, at first they did not decide to allow foreclosure on the only housing (with the exception of housing purchased with a mortgage). Why? Because they considered that people had not yet moved away from the Soviet consciousness and were not ready to fully answer for their debts. But recently, Russian society has come to understand that this cannot continue for long, that people need to be taught to answer for their debts. Bills are appearing that are designed to expand the list of cases when a debtor’s home (even his only one) can be taken away for debts (utilities, alimony, etc.). The resistance to such initiatives is colossal. But, nevertheless, they are moving in this direction.
We, planning to abolish the possibility of applying for single housing, are moving, oddly enough, in the opposite direction.
Of course, keeping in mind the need to maintain a balance of interests of creditors and debtors, it is possible to allow situations where the debtor should not be deprived of this or that property. But whether housing should be included in this category is a big question.
Daulet Abzhanov, Ph.D.
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