Property Tenders (Auctions)
Legal support in property tenders (auctions)
Property auctions include tenders for the sale of property, including the sale, lease of state and municipal property, as well as the property of debtors, which can be both individuals and legal entities.
Sale of public property is regulated by the Decree of the Government of the Russian Federation of August 27, 2012 No. 860 “On organizing and conducting the sale of state or municipal property in electronic form”.
Individuals, legal entities, individual entrepreneurs can become participants in such auctions. It should be noted that almost all property auctions are held in electronic form. In order to participate in property auctions it’s necessary to go through the registration procedure on the electronic trading platform and have an enhanced qualified signature. The property auctions of state or municipal property also include auctions for the right to conclude a lease agreement.
In most cases, the sale of property of individuals and legal entities within the framework of property auctions is carried out after the recognition of an individual or legal entity as bankrupt. As part of the bankruptcy procedure, the sale of property of individuals and legal entities is carried out by specialized organizations or arbitration managers. Due to the unstable economic and political situation, the growth in the sale of property of individuals and legal entities declared bankrupt also increased.
An important point in the conduct of property auctions is the evaluation of the sold, rented real estate, which should be carried out by an independent appraiser.
Property auctions for the sale, lease in relation to state or municipal property is the most controlled procedure, this is due to the fact that state or municipal property is sold in compliance with all legal norms, without violations and the auction is not subsequently declared invalid, and the transaction subsequently has not been invalidated. As a rule, such auctions can be monitored by various authorities to verify the legality of the auction.
Auctions for the Sale of Property
Any individual or legal entity that meets the established requirements can act as a buyer or tenant, while, as a rule, auctions for the sale of property are available to an unlimited number of participants. At the same time, bidders for the sale of property must be registered on the relevant trading platform.
The bidding procedure for participants in such auctions consists of:
- Preparation and submission of an application for participation.
- Attachment to the trading platform of documents confirming status of legal entities and individuals. Often, such documents are attached to the personal account of the future bidder even at the time of registration on such a trading platform.
- Signing an agreement on a deposit and transferring the money amount of the deposit to the details of the auction organizer specified in this agreement.
- Adoption by the auction organizer of a decision on admission or refusal to admit participants to the auction.
Participants in property auctions submit price offers and after the end of their submission, the organizer of the auction makes a decision to recognize the winner and conclude a contract of sale with the participant who sent the highest price offer. At the same time, the deposits received during the auction are returned to all applicants, except for the winner. Such a return is not made to the winner for the purpose of concluding a contract, this is due to the fact that the winner may refuse or avoid concluding a contract. When the winner avoids signing the contract, the contract may be entered into with the next highest bidder after the winner.
It is not uncommon for the bidding to be declared invalid due to the lack of submitted bids or the rejection of bidders as not meeting the requirements established by the bidding documentation. In this case, the auction is declared invalid, and the organizer receives the right to announce a second auction for the sale of the relevant property. In this case, the organizer of the auction lowers the cost of the property being sold. If, in this case, the auction is recognized as failed, then the debtor's property put up for auction is sold through a public offer.
At the same time, a public offer differs from a property auction in that the value of the property being sold, if none of the bidders submits price offers, consistently decreases over a certain period of time. The organizer of the auction must set a threshold to which a decrease can occur, below which the value of the property being sold cannot decrease.
Self-preparation of documents for participation in property auctions can take a significant amount of time, while it becomes possible to draw up and send documentation for participation in property auctions with an error, which may become the basis for rejecting an application for participation in property auctions. In this regard, it should be noted that the participation and assistance of a qualified lawyer in the field of property auctions will minimize the risks of rejecting an application for participation in an auction, reduce the time spent on paperwork, and also allow you to receive competent advice on all stages of property auctions.
- Advising clients on holding and participating in property tenders
- Preparation of documents for the participation of the customer in property auctions
- Accompanying participation or direct participation on behalf of the participant in property tenders (auctions)
- Representing the interests of the customer in the conduct and participation in property tenders