“Real estate sales by auction are not a business! “

on April 10, 2018 – BORIS STOYKOV – Law – law News

© D. R.

Master Dominique de Ginestet, former bâtonnier of the bar of Dax, is a member of the college of the ordinal of the CNB and shall preside over the committee of rules and uses. The draft law on the programming for the Justice brought by the keeper of the seals, Nicole Belloubet, had initially planned to edit the proceedings for attachment of real property and divert the sale. This provision has been withdrawn from the bill, but a modernization of the procedure is still considered. As such, it sheds light on the current procedure and its possible modernization.

Posters of Paris : The draft law Covenant originally set out in a provision amending the procedures of the sales forensic real estate. This measure, withdrawn from, did it surprise ?

Dominique de Ginestet : It was a real surprise. This announcement has caused uproar practitioners, civil enforcement procedures. Firstly, it should be clear that the objectives of the planning law for Justice, as they are announced, are shared by the professionals. They aim to get the best price while simplifying and securing the process even more than it currently is. However, the solution that had been proposed by the state Chancellery, providing for the diversion of the hearing of sale, does not achieve these objectives. First of all, on the best price, I believe that the services of the State are parties to an observation is erroneous according to which the sales at the bar would be at a price lower than the market. In reality, the sales at the bar of the court are at the market price in most cases and sometimes even beyond. An apartment by the sea is a prime example. Sometimes, a very rare arriving at the bar of the court will sell more expensive than it would have negotiated in the agency. The conclusion is therefore false. The low prices are related to the geographical location of the building, its legal status, the fact that the premises may be occupied, that there is no warranty against hidden defects, a series of elements that explain the reason why the prices may not be high. On the other hand, there is nothing to show that in front of a public and ministerial officer, whoever he may be, this price would be higher.

The proposal for the diversion was totally inadequate because, today, in order to achieve a good price, it is necessary that the sale takes place in complete safety, transparency. The hearing with the presence of the judge reassures applicants are strongly awarded.

In the field of real estate sales judicial adjudication, it must be, as you know, certify and post the ads statutory including the property sold and the TGI. In addition to the publication of legal advertisements in the newspapers, it would be advisable to provide for the dissemination of legal advertising on the internet, which will award a sale price potentially higher.

The lawyers have made proposals to achieve, even more the well ; in particular, to be able to communicate all of the information on the building, not only the terms and conditions of sales, but also all of its annexes with the technical diagnostics.

All of these elements could be communicated through a digital platform is completely secure. These measures would allow the person interested by taking the time for reflection, to look at this information, the photos, instead of the visit in the premises of the tribunal. It would also be a good idea to multiply the visits and to offer a wider publicity, in particular by making advertising on the internet required. All of these methods would enhance the property and attract even more bidders.

A. P. : There is a criticism to the current procedure to be too slow…

D. G. : The other goal was to accelerate and secure the process. In its latest reports, the Court of cassation has made recommendations aimed especially at the rationalization of the use of intermediaries, the generalization of the procedure of assignment to the date fixed in the appeal, the lengthening of the period of validity of the command, the establishment of deadlines. The legal profession has expressed his agreement on these proposals, which had received the assent of the crown in Chancery. Finally, the last point – which is also not in the explanatory memorandum of the planning act, for the relief of the work of the courts. It is necessary to know that the hearing of the adjudication itself requires very little time in lecture. In fact, the time of the court of enforcement is mainly dedicated to address incidents that have been submitted at the hearing orientation. At no point was considered, of course, to remove the intervention of the judge of the execution of this audience orientation. The time of sale is therefore relatively small compared to the time spent by the judge in hearings orientation. Today, the time which is devoted to sales is one of the registry. It is necessary in the context of the simplification of the procedure to reduce its work. The many formalities entrusted to the registry of the court of enforcement are time-consuming and can be perfectly assigned to lawyers. I mentioned earlier the specification of the terms and conditions of sale. Currently, it is deposited in the grafts and they get people interested in the sale and provide them this document so that they read it. If these terms and conditions of sale becomes available online, the intervention of the registry will be removed and therefore lighter. Same thing with the receipt of statement of the registered creditors, which can perfectly be taken care of by the lawyer of the plaintiff creditor, as well as notifications, for example in the town hall, with service by a bailiff, in order to secure the procedure and to be certain that the recipient has received the document.

There are many proposals that have been submitted by the profession, in particular to lighten the work of the courts and especially that of the grafts. Others will be formalised in the coming days. We are in capacity to present solutions to improve the attractiveness of the property offered for sale, in order that it is sold at the best price possible, and to simplify and expedite the procedure, including the recommendations of the Court of cassation.

In any case, these sales do not constitute a business, far from it. This is the reason why it is necessary to continue to entrust these sales to lawyers and not to divert the hearing, otherwise the image will be that of a business which will take place in a commissioner of justice or before a notary public, according to a scheme of business, which is not the case today.

The debtor must be protected. If his property is sold, he must know that it is under the authority of a magistrate who has the image of impartiality, and whose decision will not be criticized.

A.-P. : The place of the council of the lawyer is important in this process ?

D. G. : The duty of a council of advocates is essential. You don’t buy a house as a watch brand. Today, the candidate contractor shall bring to the auction when it is a lawyer. This assistance is in addition necessary in order to make the audit of the funds and their origin, the verification of solvency.

A.-P. : A previous reform of the foreclosure process occurred a few years ago…

D. G. : yes, Indeed. It is important not to lose sight of the fact that the last reform of the procedure of foreclosure date of 2006. It is the result of a close consultation between the Chancellery and the practitioners of the enforcement procedures and of the national bar Council. It is also necessary not to forget that since 2006, the distribution procedure has been déjudiciarisée, entrusted to lawyers, and that in 99 % of cases, this distribution takes place out of court, and is therefore a success. This shows that the lawyers are able to lessen the work of the judges. Finally, it is important not to lose sight of the fact that this reform of 2006 has placed the debtor in the center of the foreclosure, in order that everything is done to promote the private sale of the property. All of this for the debtor, who cannot do otherwise, to become aware that his property can be sold and that he has to deal with it. It is important to know that more than one-third of the procedures of foreclosed real estate are closed for a private sale, which is favoured by lawyers. For the other, many of the files do not go up for sale because agreements are concluded between the lawyer who represents the plaintiff creditor and the debtor, himself, or represented by his lawyer. The debtor is the person who undergoes this procedure with the more violence. This is not an offender. He simply had the wrong not being able to pay his credit. The family home is often at stake.

A. P. : It is thus necessary to promote the private sale ?

D. G. : yes, but at the end of the bout, the seizure is successful at the auction and it is necessary that the debtor can attend this sale, can see that it is made under the authority of a judge, that is to say, the State. We are in the framework of the preservation of the property right, a constitutional right, and it seems to me essential that the judge be present at the end of the procedure. Once again, the legal profession is their ability to present proposals to modernize this procedure, especially considering the technology digital and available to us.

A.-P. : Still, you, the intervention of the judge is essential ?

D. G. : The judgment of adjudication, because it is a judgment, will allow the contractor to proceed with the expulsion of the one will be wrongly maintained in the premises. If we only had a deed drawn up by a public and ministerial officer, whoever he may be, this act of sale would not allow the eviction. And the successful bidder, the buyer, the new owner, would be forced to initiate a new procedure in order to order the expulsion. This would therefore lead to an increase in the time masterful and the work of the grafts. This is to demonstrate that the stated objectives in the act of programming will not be affected by the proposed action. It has, fortunately, been removed. This is the reason for which the consultation is required with the lawyers.

A. P. : actually, the attorneys are often specialized in this type of procedure…

D. G. : The lawyers who practice this procedure in foreclosures have a high skill, a specialty is very sharp. The diversion would not operate to the detriment of the debtor and the creditor is pursuing and, in the end, an increase in the work of the judge.

A. P. : And in advertising land ?

D. G. : The lawyer could also take care of the formalities for the registration of the judgment award. It is enough that we benefit from the formality merged, like notaries. This claim has been presented within the framework of a project of reform of land registration. This would allow the lawyer of the plaintiff creditor to proceed in a same time with the registration formalities and publicity in the service of the land, whereas today, this is done at the initiative of the registry which then returns to the lawyer’s judgment with the reference of this record, so that it can publish. This procedure is much too long and too heavy for the registry.

All of these proposals have been formalised in a project which will be awarded in the beginning of the week at the Chancery. There are certainly still a lot of formalities now assigned to the registry which could be entrusted to the counsel for the plaintiff creditor.

A. P. : there is a dedicated working group within the CNB ?

D. G. : Yes, there is a group working on the subject, dating back several years. Under the previous administration, I was in charge of this group. My mandate had been renewed, I currently chair the commission rules and practices and am always in charge of this working group, made up of elected members of the national bar Council, but also practitioners, civil enforcement procedures and foreclosure, drawn mainly from the Association of the practitioners of the procedures and execution (APPE) and to the association Law and Procedure. This group has already been active in the framework of previous reforms of the foreclosure, making multiple proposals. He also intervened in the discussions with the DGCCRF on the reform of the tariff of the postulation. The adopted texts are, as well, from a consultation to be very narrow in terms of trust and sincerity.

The national bar Council calls for the continuation of the dialogue with the Chancellery in order to achieve a real modernisation of the procedure of foreclosure. The goal is to promote the sale at the best price, secure and simplify the procedure for the rationalization of the use of between-ness and the establishment of deadlines, and to modernize it through the use of digital tools and finally to reduce the work of the courts ,
in particular, in releasing the grafts from numerous formalities .

Interview by Boris Stoykov

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