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The Transfer of Ownership of the Properties at Auction

The Transfer of Ownership of the Properties at Auction - See How Property is Switched to Real Estate Auctions

The Transfer of Ownership of the Properties at Auction

Those who win a house at auction often wonder when they actually own the property. It is necessary to know that the transfer does not automatically occur with the transfer, which is why it is necessary to wait for the transfer order to be issued by the court.

This decree makes the transition from the debtor to the holder of the property of the asset being executed. The transfer decree therefore has the translative effect of the royal right on the asset in the claimants' rights.

The issue of the transfer of ownership in real estate auctions is complex and requires some clarifications related to:
  • Decree of transfer and release of the property
  • Property transfer costs at auction
  • Foreclosure transcripts
  • Home key delivery at auction
  • What to do after the transfer decree
Before we get into the subject, let's first look at what the transfer decree is.

Transfer Decree: What it is And How it is Obtained

The definition that gives us the civil code of the transfer decree is as follows:

"The Execution Judge's provision by which the royal right is passed on by the debtor who owns it, to the final bidder who thus becomes its new owner."

In simpler terms, the transfer decree attests to the transfer of ownership of the property following the purchase at auction. Through the signing of the transfer decree, the enforcement court decides the sale of the dispossessed asset to the bidder and, at the same time, gives the green light to the cancellation of the foreclosures and mortgages burdened on the property, since the creditors have retaliated against the asset and can now obtain the liquidity necessary to satisfy the credit against the insolvent debtor.

It should be remembered that the transfer decree is not always signed with the award. In some cases the court may not sign such an order and block the sale: usually this happens when he believes that the price offered is considerably lower than the right one. In this case the auction will be reopened and the base price will be increased in the face of new evaluations and appraisals.

So how do you get the transfer decree? First, the bidder will have to pay the price on the terms set out in the sales order; After that, after which a period of time ranging from a couple of weeks up to 3 months, the judge if he considers the sale suitable signs the decree. After obtaining confirmation of the signature, it will be possible to withdraw the decree in the appropriate court.

Decree of Transfer And Release of the Property

We have seen that in order to obtain the measure and thus become the owner of the property, it will be enough to pay the price on time and that the sale is deemed suitable by the court. But what if the property continues to be occupied by the old owner or other tenants?

This is a common situation: that's why it's important to know if the property is occupied before the auction, and to what point.

In any case, with the transfer decree, the enforcement court provides "the release of the property without charge to the contractor or the assignee or the purchaser...".

If you win a property at the auction that is already occupied you will need to go to a bailiff to obtain possession.

The costs of executing the liberation order always weigh on the procedure and, therefore, are not borne by the contractor.

The execution of the release of the property is carried out by the custodian according to the provisions of the real estate execution judge, in the interest of the contractor or the assignee if they do not urge it. For the implementation of the liberation order, the custodian can use the public force and appoint auxiliaries.

The measure will, however, be challenged by a third party who claim ownership of a right to enjoy the good and the deadline for opposition will start from the day the notification of the measure was finalized against the third party.

Property Transfer Costs at Auction

One of the fulfillments following the awarding phase of the asset is the registration of the transfer decree, which effectively transfers ownership of the asset to the bidder.

According to the practice of many courts, the registration of the measure is the responsibility of the delegated professional for the sale.

The sales person will then take care of the transfer transactions by drawing from the deposit paid by the bidder at the time he applied for the auction.

Expenses for the transfer of the property include:
  • Register tax (or VAT): the amount of the register tax is 9% (reduced to 2% in the case of first home;
  • Mortgage and land tax, set at 50 euros each;
  • Stamp duty (equal to 16 euros per copy) and stationery rights (from 11.54 euros) for the release of genuine copies of the transfer decree;
  • Professional compensation of the delegate
In practice, the amount of expenses and fees ranges between about 10% and 15% of the final award price (if it is a first home the amount is lower).

Foreclosure Transcripts

We have already said that with the transfer decree the court will cancel the foreclosures and mortgages on the property.

In general, the costs of cancelling the burden are borne by the procedure, although for some courts these costs are borne by the contractor. This should be checked before participating in the auction: the cancellation of the burdens would represent an additional cost to be added to the entire purchase operation and therefore the amount will be carefully assessed.

If you want to avoid spending to cancel mortgages and foreclosures you can always wait for the prescription, but to be 100% sure it is always preferable to pay for cancellation.

In any case, the bidder has the right to request the return of the cancellation costs, as these expenses are included in the privileged expenses ex art. 2770 civil code.

Home Key Delivery at Auction

Who to turn to to get the keys to the house purchased at auction is a matter that is outside the real estate execution procedure.

However, with the transfer decree we have in hand, in fact, an executive title that allows us to act for the immediate release of the property. It will therefore be necessary to agree directly with the debtor for the delivery of the keys of the property.

If the property has a custodian appointed by the Court it will be possible to turn to him to obtain the keys and he can also provide for forcible release if the occupant does not show himself to be cooperative.

What to do After the Transfer Decree

In order for the transfer decree to have legal value, it is not sufficient for it to be issued, but it will have to be deposited in the stationery of the same. It is permissible to suspend the sale and to revoke or annul the award when the decree, although signed, has not yet been filed in the stationery.

Within 30 days of filing the measure in the chancellery, you must go to the Conservatory in order to obtain the quantification of the taxes to be paid. After that, you will have to make the payment of taxes and deliver the Mod. F23 at the Conservatory.

Here, in summary, are the steps following the transfer decree:
  • Communication to the Local Public Security Authority of the sale and the name of the purchaser
  • Acquisition of the repertory number of the transfer decree
  • Determining the amount of register tax and payment
  • Annotation at the bottom of the decree of the extremes of the registration
  • Transcript for Transfer Order
  • Cancellation of formalities
  • Determining amount and payment transcription tax
  • Entry in the possession of the bidder
  • Closing custody and sales operations
In this article we explained how the transfer of property in real estate auctions takes place. Becoming an auction house owner is never easy but we hope to have helped clarify the whole process.

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