What Rights Does a Debtor Have During Enforcement Property Assessment?

What Is Meant by 'Assessment' of Real Estate

People use this term to refer to several different actions. It is useful to distinguish between them, as different rights and duties apply to each.

• Enforcement order for sale of real property (exekuční příkaz k prodeji nemovité věci) – issued by the enforcement officer (exekutor) under the Enforcement Code No. 120/2001 Coll. (§ 69 et seq.). The property is not seized outright, but the debtor can no longer deal with it freely.
• Property inspection and valuation (zjištění stavu a ocenění) – the enforcement officer arranges for the property to be valued, usually by an expert (znalec). The expert or enforcement officer may need to inspect the property.
• Seizure of chattels (soupis movitých věcí) – a separate procedure in which the enforcement officer inventories personal property in the house or flat (§ 52 et seq. of the Enforcement Code).

In the case of the real estate itself, then, it is not an 'assessment' in the true sense as with personal property, but rather a set of actions before the auction (dražba).

When Assessment or Inspection Is Necessary

If the enforcement officer is conducting enforcement by sale of real property, he or she must know its condition, appurtenances, and value in order to set a reserve price and announce the auction (dražba) (Code of Civil Procedure No. 99/1963 Coll., provisions on enforcement by sale of real property; applied mutatis mutandis to enforcement under the Enforcement Code). Inspection is thus usually part of the proceedings. Between the enforcement order (exekuční příkaz) and the auction there are usually weeks to months, so time to prepare normally exists.

Seizure of chattels (soupis movitých věcí), on the other hand, is only one of several options; it need not occur if enforcement is pursued only against the real estate.

What a Debtor May Do and Is Entitled To

• Demand proof of authority. The enforcement officer or his or her appointed agent should identify themselves and state what matter they are dealing with.
• Be present and bring a trustworthy person or lawyer. Having a witness present is often useful.
• Ask questions and point out facts, such as tenants, charges on the property, co-owners, or items belonging to third parties.
• Have objections recorded. A record is made of the action; it is wise to read it and have your objections noted.
• Protect items exempt from enforcement. Under § 322 of the Code of Civil Procedure No. 99/1963 Coll., basic household goods, personal items, or items necessary for work cannot be seized.
• Defend yourself by filing objections. You may lodge a complaint against the enforcement officer's actions (§ 88 of the Enforcement Code No. 120/2001 Coll.) and, under the conditions set out in that Act, request suspension of enforcement (§ 54 et seq.).
• Point out third-party rights. Property of family members or tenants does not belong to the debtor and should not be seized.

What a Debtor Must and Must Not Do

Rights come with responsibilities. The debtor should:

• allow access to the property and cooperate with valuation; obstructing the action could lead to stricter measures under the Enforcement Code,
• answer truthfully about property and third parties,
• not move, sell, or conceal items the enforcement officer has recorded.

After the enforcement order (exekuční příkaz) is served, the debtor must not transfer or encumber the property without the enforcement officer's consent, for example by a mortgage; such conduct could be ineffective. Ownership of the real estate passes only upon entry in the Czech Land Registry (katastr nemovitostí) under the Land Registry Act No. 256/2013 Coll.; the land registry office cannot decide earlier than 20 days after notifying the owner.

Access to a dwelling is subject to lawful procedure and authorization. If in doubt, ask for proof and a written statement.

How Conduct and Preparation Affect the Process

Quiet cooperation usually simplifies the process. Refusal of inspection will not stop the auction but may complicate matters. An auction is usually the most expensive option for the debtor; from the proceeds, the costs of proceedings and creditors' claims are paid first. At an auction, the minimum bid is two-thirds of the final price (§ 336e of the Code of Civil Procedure No. 99/1963 Coll.; applied mutatis mutandis to enforcement proceedings).

Useful preparation:

1. Prepare documents: title deeds, tenancy agreements, insurance policies, documentation of building works and renovations.
2. Separate and document items belonging to others (invoices, handover protocols).
3. Obtain photographic evidence of personal items and the property's condition.
4. Consider alternatives: sale with the enforcement officer's consent, settlement of the enforcement, or an agreement with the creditor. A calculator comparing auction and sale may help.

Tips for Protecting Personal Property

• Do not sign anything under pressure and without understanding; a signature on the spot is not necessary.
• Beware of quick-fix offers. Loans secured by the property and sale-leasebacks can make matters worse; see risks of property sale-leaseback.
• Cash payments are limited to 270,000 CZK per day (Act No. 254/2004 Coll.); reputable property purchases are conducted through a lawyer's escrow account.
• If you have doubts about the procedure, contact a lawyer; a full overview is provided in the guide to enforcement on real estate.
• If debts exceed your ability to pay, you may also consider insolvency proceedings under the Insolvency Act No. 182/2006 Coll.

More information can be found in the advice and explanations section. The content is for information only and does not replace legal advice; a non-binding situation assessment is free through the online form on the website.