E-note 5 – The attachement of immovable property (Professional E-note)

ATTACHABLE PROPERTY

Article 1560 of the Belgian Judicial Code states that:

“The creditor can pursue the compulsory purchase of:

1) property and its accessories belonging to the debtor;

2) usufruct, emphyteutic leaseholding and rights of superficies belonging to the debtor, on the same kind of property.”

1. Immovable property or assets considered as immovable property

Article 517 of the Civil Code states that:

“Property is immovable either due to its nature or purpose, or by the end use for which it is intended.”

2. Belonging to the debtor

The attachment petition must also come with an extract from the land registry which includes all information about the immovable property, serving as a declaration of ownership for the debtor.

ATTACHMENT BEFORE JUDGMENT

1. Conditions

The debt must be definite, liquidated and payable

Creditors with a definite, liquidated and payable debt can proceed to attachment before judgment of the moveable property belonging to its debtor, if the latter’s solvency is compromised.

LIQUIDATED:

If a foreign judicial order meets these requirements, it can be used to proceed with an attachment before judgment, even if there is no exequatur.

It must be an urgent matter

Article 1413 of the Belgian Judicial Code provides that:

“Creditors may, in urgent cases, ask the judge for authorisation to attach the attachable property belonging to the debtor prior to judgment.”

2. Procedure

No judgment on the merits of the case is available as yet

The petition

However, Article 1430 of the Judicial Code provides for some other specific information for property attachment before judgment:

“The petition to attach the real assets before judgment shall contain the following, in addition to the information stated in Article 1026:

  • 1) the title, causes, the total or the valuation of the debt;
  • 2) the property to be attached;
  • 3) the debtor’s surname, first name and domicile.

The following shall be attached to the petition:

  • 1) an extract from the land registry relating to the property to be attached;
  • 2) a certificate from the land registrar stating, if applicable, all existing records and all records of orders and attachments relating to said property.”

There is a judgment on the merits of the case

Judgments provide authorisation to proceed to attachment before judgment for certain convictions within it, independently of the acceptance of the provisional compulsory enforcement, unless the judge ruling on the merits of the case has formally ruled out this possibility or a respite of payment has been granted.

No order must be issued

Article 1432 of the Judicial Code provides that:

“The property attachment before judgment must not be preceded by any order.

It is done by writ issued to the debtor which must contain the following, under penalty of nullity:

  • 1) a copy of the petition and the order authorising the attachment or, if it has not been previously issued, a copy of the judgment which, as stated in Article 1414, is used as authorisation;
  • 2) the identity of the debtor: surname, first name, profession, domicile, place of birth and date of birth;
  • 3) a precise indication of the property attached in accordance with Article 1568;
  • 4) the extract of the land registry.”

This attachment must be recorded in the month after the order of the judge of attachments. If this is not recorded, the order is considered null and void and the attachment before judgment is annulled.

It is the date the writ of attachment is presented at the land registry that is taken into account. The land registrar must record the attachment within eight days, under penalty of nullity.

Renewal

Creditors who provide proof that their attachment must be maintained must request a renewal at least 15 days before it expires. This period of 15 days is an expiry date.

Article 1439 of the Judicial Code provides that:

“The order is served on the debtor. The order is considered null and void if the record renewal request has not been made before the end of the validity period for the previous attachment.

The record renewal takes place upon presentation of a request in two copies to the registrar containing the precise indication of the record to be renewed, along with the authenticated copy of the order and the record of service, without prejudice to the application of Article 90, section 2, of the law of 16 December 1851, if applicable.”

DISTRAINT

1. A few specific cases

Joint ownership

Article 1561 of the Judicial Code:

“However, the indivisible part of the debtor cannot be enforced by its personal creditors before division or sale by auction of property belonging to joint heirs/owners, that they can provoke or in which they are entitled to take part, unless the joint ownership agreement concluded prior to the division request or the mortgage deed is adhered to.

In the event of sale by auction of property belonging to joint heirs/owners, and whoever the buyer is, other than the co-recipient, of which the indivisible part was mortgaged, the right of the mortgagee is transferred from the debtor to the creditor in the price.

In the event of division with cash adjustment, the amounts that the co-divider must pay are allocated to the payment of priority or mortgage debts, which would lose this status, according to their ranking at the time of the division.”

Spouses

In accordance with Article 1562 of the Judicial Code, the compulsory purchase of immovable property belonging to the shared assets of the debtor and his or her spouse can be pursued with a view to payment of a debt shared by both spouses or which is a debt owed by one spouse which burdens the shared assets.

2. Procedure

Pursuant to Article 59, §1 of the mortgage law (LCH in French), lenders with a judgment or another authentic deed and who intend to take a compulsory enforcement or attachment measure, must first attempt to come to an amicable agreement. This agreement must be initiated by the creditor, before any orders are served.

Notification of an order

Contrary to the procedural instructions applying to the property attachment before judgment, a payment order must be served prior to the distraint.

Article 1564 of the Judicial Code determines the information that must appear on this order:

  • a full copy of the title, unless it has been served to the debtor;
  • the election of domicile in the district where the judge sits who must hear the attachment;
  • the statement that, if payment is not made, the attachment of the real assets will take place;
  • the surname, first names, profession, domicile, place and date of birth of the debtor;
  • the basic contents of Article 43 of the Judicial Code;
  • the fact that the debtor may communicate any private bid for his or her real estate to the judge within eight days of the writ of attachment being served.

In accordance with Article 1567 of the Judicial Code, the order is valid for six months, i.e. in six months, the order must be followed by a writ of attachment. If this deadline is not met, the order automatically loses effect.

Respite of payment

Article 1334 of the Judicial Code provides that:

“If the enforcement or the attachment takes place by virtue of an authentic document other than a judgment, the extension request provided for in Article 1244 of the Civil Code must be made within fifteen days of the order otherwise it shall be rendered null and void, or if there is no order, from the first writ of attachment served on the debtor.”

This right to claim a moderate respite of payment is a public one and cannot be ruled out. It is however necessary for the debtor to be in difficulty and act in good faith.

The attachment

The attachment must be ordered in the six months, but only (under penalty of invalidity) after the fifteen days following the order have been served.

A payment order must be served again after six months.

In accordance with Article 1568 of the Judicial Code, the writ of attachment must contain the following:

  • a statement of the enforcement deed;
  • the designation of the attached real assets as prescribed by Article 144 of the mortgage law;
  • the indication of the judge who will rule on the request;
  • the indication of the debtor’s option to pass on any private bid for its real asset within eight days;
  • the identity of the attached party.

The attachment does not entail any transfer of ownership and only entitles the creditor to have the property sold. Actually, the ownership right has a completely different meaning for the debtor. He or she can no longer mortgage or alienate the immovable property and will have to act in the interest of the creditors.

The objection

The debtor can summon the creditor to the court of attachments due to irregularity of the attachment or the title.

The request and the order of designation of the notary

In accordance with Article 1580 of the Judicial Code, the creditor has one month, after the attachment is recorded, to lodge a request with the court, asking it to designate a notary who will be tasked with the public or private sale of the attached property.

The request shall also include:

  • the original order;
  • the original writ of attachment;
  • the enforcement deed;
  • the extracts from the land registry;
  • power of attorney for a private sale, if applicable.

The order that results from Article 1580 of the Judicial Code can be appealed by the petitioner or the person whose property has been attached. For either recourse, there is a deadline of one month from notification.

Although the serving of the order is not a legal obligation, the order can be served to the relevant party simply in order to let the deadline for third party proceedings lapse. Objections do not produce any suspensive effect.

Private sale

At the request of the person whose property has been attached

The debtor is informed, both in the order and in the writ of attachment, that the immovable property can also be sold privately.

At the request of the creditor applying the attachment

The attaching party can also file a request for a private sale, in accordance with Article 1580ter of the Judicial Code.

Public sale

Conditions of sale

If the immovable property is not sold privately or if the judge of attachments objects to a private sale, general conditions of sale must be set in order to describe the legal framework for the continuance of the transactions.

These conditions shall describe the legal relationship between the party whose property has been attached, its creditors and the buyer.

The debtor and the creditors responsible for the mortgage advertisement for an order or a served attachment before judgment are invited, by writ, to review the conditions of sale and witness the forced sale at least one month in advance.

The sale

The sale must take place in the six months following the order of designation of the notary, under penalty of invalidity. If this deadline is not met, a new notary must be appointed.

The notary shall draw up an auction report that will be sent to the buyer along with the conditions of sale. An extract from the deed of invitation to tender must be served on the party whose property has been attached within fifteen days of the expiration of the deadline for payment of costs (this deadline can be found in the conditions of sale).