The partial auction for communities of heirs

Objects such as real estate or land often give rise to disputes in communities of heirs. The ideas of how to proceed with the common property are too different and the participants cannot agree. Every heir has the right to demand a partition of the community of heirs at any time and thus to force its dissolution. In such a case, a partition auction may be the last resort to settle the disputes and dissolve the community of heirs. You can find out here what needs to be taken into account in the event of a dispute and a partition auction.

Learn more about communities of heirs!

Application for partition auction – the correct form must be observed

An application procedure always precedes a partition auction. This application can be made by any heir of a community of heirs. Formally, a written application, which must be submitted to the competent district court, is sufficient. However, it must be accompanied by certain documents. In the first application, it must be proven beyond doubt that the applicant has co-ownership of the property to be auctioned. The appropriate document is a corresponding extract from the land register, which must not be older than six months. Once the application has been received, it is examined by the local court and the next steps are initiated.

Partition auction & community of heirs – Video

The procedure – step by step to the partition auction

The process of a partition auction already begins with the application that one of the heirs from a community of heirs must file with the district court. This is followed by further steps in order to carry out the partition auction in accordance with the law.

The expert opinion – assess the value of the property

A partition auction requires an appraisal of the value of the property or land. The court needs this in order to determine the lowest bid for the partition auction. Such an appraisal can be obtained in three different approaches. The petitioner can obtain a private appraisal, but the entire community of heirs must agree to this step. An alternative is to obtain the appraisal through the court. Often a valuation report is already available. As long as this is not older than a few weeks or months, it can also be used.

The minimum bid – determined by the court

The court sets a so-called lowest bid before the partition auction to ensure that the proceeds of the partition auction can cover the costs of the proceedings and all claims of the heirs. Once this is determined, neither the market value nor the purchase price of the property or land is relevant and the lowest bid is considered the notional value. It is made up of the rights, encumbrances and minimum cash amounts. The person who acquires the property or land at the partition auction assumes all rights and encumbrances in addition to the subject matter and thus becomes the purchaser and debtor.

The auction – the highest bid gets the surcharge

Once the lowest bid has been determined by the court, a date for the partition auction can be set. Subsequently, the partition auction of the property or the land should be advertised in newspapers and on the Internet in order to attract interest in the property. Viewing appointments are also possible in consultation with the community of heirs. On the auction date, all interested parties can submit bids within a predetermined time frame. The highest bid is accepted for the property and the community of heirs may be divided.

The duration – varies from case to case

The duration of a partition auction is different depending on the case. It depends in particular on how long it takes to prepare the expert opinion and how long it takes to process the application. The applicant can only shorten the duration by already having a valuation report available when filing the application and the court agrees to its use.

The disbursement – dispute of the community of heirs

The community of heirs does not successfuly dissolve until the proceeds have been successfuly distributed. Disputes can also arise here. If the testator has not determined the distribution in his will, the statutory inheritance quotas usually apply. If the heirs do not agree, a civil action may be brought. The proceeds from the partition auction are deposited with the district court and are not paid out until the heirs have reached a written agreement on the distribution.

The costs – how much are they and who bears them?

Certain costs are incurred for a partition auction. These include the application costs, the procedural costs, the expert’s fees, the lawyer’s fees and the costs for newspaper and internet advertisements. All these costs are incurred when the court orders a partition auction. The costs for the notification of the co-heirs are part of the application costs. Usually, the costs of the proceedings have to be paid as an advance. Who bears the costs of a partition auction depends on the outcome of the auction. If the auction is successful, all costs will be deducted from the proceeds and thus each heir will share equally in the costs. However, if the auction is not successful, the applicant bears the costs alone and the community of heirs continues to exist.

The alternatives – private sale or voluntary auction

The partition auction involves some risks that should be well thought out in advance. The property could be sold below value and lead to low profits for the heirs. There are some alternatives that eliminate these risks. The property can be sold privately, saving the application, procedural and legal fees. In addition, the heirs can choose the buyer themselves and thus ensure that the property is not sold below value.

Another alternative is the voluntary auction. The community of heirs can turn to a public auctioneer who organises and conducts an auction. The advantage here for the heirs is that the minimum bid can be determined themselves and thus there is no risk of an auction below value. However, in both cases the community of heirs must unanimously agree to the sale of the property.

The most important questions on the subject of partition auctions in communities of heirs

A partition auction can resolve disputes within a community of heirs, but it can also reignite disputes. To avoid mistakes and save time, it is important to take the right steps. Lukinski’s experts answer the most important questions on the subject of partition auctions in detail for you.

Why a partition auction?

A partition auction can put an end to long disputes, especially in communities of heirs, and lead to a result with which all heirs agree. The partition auction also offers the last resort if no agreement can be reached.

What does for the purpose of abolishing the community mean?

The partition auction success for the purpose of the abolition of the community around from an indivisible article, like a property or a real estate a divisible money equivalent to generate.

What is a partial auction of a house? More terms in our property glossary.

A partial auction is held when several people are co-owners of a property. The partial auction turns an indivisible object into a divisible amount of money that can be divided among the owners.

What does § 1010 BGB mean?

Pursuant to § 1010 of the Civil Code, the co-owners of a plot of land may make arrangements for the administration or use of a plot of land or exclude the right to demand the dissolution of the community.

What did ZVG mean?

The abbreviation ZVG stands for Zwangsversteigerungsgesetz. This regulates both the forced sale and the forced administration.

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Reject inheritance – makes sense depending on the situation

The inheritance does not always hold only good things in store for the descendants. Even if many dream of riches and expensive jewellery, debts or dilapidated real estate can also be part of the estate. In such cases, it is possible to disclaim the inheritance within a certain period of time and in accordance with certain criteria. What happens to the inheritance afterwards and how you can best proceed in such a case is now explained by the experts at Lukinski.

The form and deadline – you must pay attention to this

To disclaim the inheritance requires some rules. Simply notifying the family or simply having no reaction to the inheritance is not enough. The form is very crucial. The heir must make a disclaimer to the probate court either in the form of a transcript or in a publicly notarized form. However, a simple letter is not sufficient. A personal appearance before the probate court is also possible. There, the heir explains his or her request and a judicial officer records it in writing. The local court in whose district the deceased had his or her last residence is responsible. If the deceased is German, but had his residence abroad, the Berlin-Schöneberg Local Court is responsible. In Baden-Württemberg there is a special regulation. In this federal state, the state notary’s office is your contact.

However, not only the form is very decisive for the success of the disclaimer, but also the content and the deadline of the declaration. This must have clearly listed why the inheritance does not want to be accepted. The reasons should be clearly listed. These may include, for example, that the estate consists mainly of debts. The declaration is subject to a so-called six-week period. If the heir does not wish to accept the inheritance, the relevant declaration must be submitted to the competent probate court within six weeks, otherwise the inheritance is deemed to have been accepted. The cut-off date is assumed to be the day on which you learned of the inheritance, which usually coincides with the day of death. The deadline is only extended in certain exceptional cases. For example, if the deceased or the heir himself is abroad at the time of death, the six-week deadline can be postponed.

Generally speaking, the probate court does not have a duty to bring. The heirs are only notified of the inheritance if there is a will or if they succeed to the inheritance because, for example, someone else has already disclaimed the inheritance. In all other cases, the heirs are assumed to know whether or not they inherit anything from a deceased family member.

• The correct form is decisive in order to make the disclaimer of the inheritance legally effective.
• The content of the declaration must contain precise reasons for the renunciation of the inheritance
• Heirs are not informed of their role as heirs by the probate court unless there is an estate, or they succeed to the estate as heirs

Inheritance: Accept or reject? – Tips from a lawyer

Rejecting an inheritance – When does it make sense?

No heir is obliged to accept the inheritance. This is mainly for the protection of the heir, because he or she receives not only the assets but also the debts of the deceased, for which he or she is liable with his or her own private assets. Before an inheritance is therefore started or struck, each heir should first of all get a precise overview of the assets and debts of the deceased. These include bank balances, securities, valuables, land and real estate, but also funeral costs, loans, maintenance arrears or compulsory portion claims. The costs of an estate administration or a will opening can likewise be added. If this examination shows that there is more debit than credit, it makes sense to disclaim the inheritance. If real estate in need of renovation is part of the estate, a detailed examination is also necessary. If the inheritance is accepted, a lot of money must be invested in the renovation work, which can be very expensive depending on the case. Therefore, you should carefully consider whether you want to accept the inheritance in such a case or not.

• An over-indebted inheritance can lead to the financial ruin of the heir
• Renovable real estate can be part of the inheritance and lower the value of it

The costs – disclaiming inheritance in the event of overindebtedness

If the inheritance is overindebted, the costs are very low. The fees for disclaiming the inheritance are a flat rate of 30 euros at the probate court. If an inheritance that is not overindebted is rejected, the costs are incurred in accordance with the Court and Notary Costs Act. The higher the value of the estate, the more expensive the proceedings will be.

An inheritance can only ever be disclaimed in full. Accepting the assets and disclaiming the debts is therefore not possible. If an inheritance is disclaimed, the heir is no longer entitled to the compulsory portion, which is normally due to each heir according to the law. If the estate is disclaimed by all possible heirs, it becomes the property of the state. The latter uses the assets (if any) to pay off part of the debts. The creditors of the remaining debts are left empty-handed in such a case.

• The cost of eliminating an inheritance in the event of overindebtedness is very low
• An inheritance can only ever be accepted or disclaimed in full.

Udecide in retrospect – is this possible?

Once an inheritance has been accepted or the deadline has passed, there is usually no turning back. However, once again exceptions confirm the rule. In certain cases, it is possible to withdraw from the inheritance after the fact. If, for example, it comes to light after the acceptance of the inheritance that the estate contains a large loan from the deceased, of which you were unaware until then, the acceptance of the inheritance can be contested. However, as a prerequisite, you must have had full knowledge of the assets and debts of the estate. However, if the heir wants to contest the acceptances because the six-week period was not known or it was not clear when it starts, this is also possible with a good lawyer.

In the opposite case, there are also some possibilities. If the inheritance was disclaimed due to over-indebtedness and it subsequently transpires that the estate does not contain as many debts as was assumed at the outset, the disclaimer cannot be contested. If, however, it subsequently transpires that securities or real estate are part of the estate of which you had no knowledge at the time of the disclaimer, a challenge is very much possible. The contestation must be declared in writing to the probate court within six weeks after the error has been recognised and must state the reasons for the contestation.

• Depending on the case, a subsequent disclaimer of the inheritance is possible
• However, the disclaimer of the inheritance can also be challenged retrospectively.

Read more about inheriting without a will!

The most important questions on the subject of disclaiming an inheritance

Many regulations, deadlines and declarations make the disclaimer of an inheritance complicated. So that no questions remain unanswered for you, our experts at Lukinski answer the most important questions on the subject of disclaiming an inheritance.

What does it cost to disclaim an inheritance?

The cost of disclaiming an inheritance in the event of over-indebtedness is a flat rate of 30 euros. If an estate that is not overindebted is disclaimed, the costs are calculated according to the amount of the estate.

What if you disclaim an inheritance?

If an heir disclaims the estate, he or she is no longer entitled to take over the assets and debts of the deceased and is not liable for them with his or her private assets. With a disclaimer, the heir loses all rights and claims he or she has to the estate. This also includes the compulsory portion.

When does the deadline begin to disclaim inheritance?

The six-week period to disclaim the inheritance begins when the heir becomes aware of his or her status as one. In most cases, the period begins with the knowledge of the death of the testator, that is, the date of his death.

What is the intestate succession?

If no will has been left or if it has been found to be invalid, the legal succession applies. This is based on the degree of kinship and the marital property status of the testator. The relatives are divided into three orders for this purpose.

What do I have to do to disclaim an inheritance?

The heir must present himself in person at the probate court of his own residence or the last residence of the deceased, identify himself and disclaim the inheritance. On the spot, the rejection is put on record.

What happens to the debt after death?

In principle, after death, both the assets and the debts pass to the heirs as long as they do not disclaim the inheritance.