A property from a bailiff's auction – is it worth buying?

Bailiff's auctions involve turning a debtor's assets into cash when they cannot settle their obligations. For people looking to buy a property, they can be a chance to find a house or flat at a bargain price. Find out whether it is worth taking advantage of such an opportunity and how to do it.

How does a bailiff's auction work?

A bailiff's auction is the final stage of enforcement proceedings, the aim of which is to recover a debt. The bailiff first tries to seize the funds in the debtor's bank account and their salary. If the amounts obtained are too low to satisfy the creditors' claims, the officer seizes the debtor's movable property and real estate.

The main purpose of enforcement proceedings is to enforce an obligation arising from relationships governed by substantive civil law. In practice, this means that if there is no other way to recover the debt, the bailiff may seize the debtor's house or flat. The property is then put up for auction, and the funds obtained are passed to the creditors towards repayment of the debtor's obligations. Both individuals and legal entities may take part in the auction, and the buyer is the person who offers the highest purchase price.

What properties can you buy at a bailiff's auction?

Bailiff's auctions attract people looking for houses for sale, but also for flats, commercial premises and plots of land. In this way you can acquire almost any type of property, and do so at a very attractive price.

The properties most often put up for bailiff's auctions are:

• houses,
• flats,
• land,
• industrial buildings (for example halls, warehouses),
• retail and service premises,
• garages and parking spaces.

The range is very wide, because it covers all assets that have significant value and can be turned into cash.

How does a bailiff's auction proceed step by step?

A bailiff's auction is quite a complicated process, and the procedure consists of many stages. Not every one of them matters to someone looking for a house or an apartment for sale. It is nevertheless worth knowing what the whole process looks like.

• Official commencement of enforcement proceedings

The bailiff officially begins recovering the debt. First they try to contact the debtor and agree a repayment schedule with them. If this is not possible or the debtor is unable to settle the obligation, the process moves on to the next stage.

• Seizure of the debtor's assets

The bailiff starts by seizing the funds in the debtor's bank account and their salary (never in full, always only a specified portion). If the sum is insufficient to cover the obligations, the officer may also seize the debtor's assets, that is, movable property and real estate. Their owner may use them but may not dispose of them (for example, sell or let them).

• Demand for repayment of the debt

The bailiff calls on the debtor to repay the debt within two weeks. If this does not happen, the assets will be put up for auction.

1. Valuation of the property

If the debtor's assets include a property, an appropriate entry is made in the land and mortgage register (księga wieczysta). The creditor then applies to the bailiff for a valuation. The property is described and its value is estimated.

• Notice of the auction

The auction may not take place earlier than two weeks after the valuation of the property becomes final. After that time, the court and the bailiff make information about the planned auction public. Such announcements can be found online, for example on the website of the National Council of Bailiffs (https://licytacje.komornik.pl/).

• The course of the auction

Anyone who pays the bid deposit (wadium), that is, a set sum of money, can take part in the bidding. It amounts to 1/10 of the value of the property. It can be paid in cash to the bailiff or into the bank account provided. The auction itself is fairly simple – the bailiff announces the starting price, and participants offer higher and higher amounts. The highest bidder wins. The final price (less the bid deposit) must be transferred within 14 days to the designated deposit account.

After the auction ends and the specified amount is paid, the court issues a decision on entering the buyer in the land and mortgage register.

Bailiff's e-auctions

Bailiff's e-auctions follow the same course as those held in person and also make it possible to buy a property at very attractive prices. However, they do not require you to appear in person at the auction venue designated by the bailiff. The entire process takes place online. To take part, you must register on the government portal e-licytacje.komornik.pl. Announcements of current bailiff's auctions are also posted there. Taking part is similar to using online auction sites – the person who offers the highest amount wins.