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.

Factors influencing the price of real estate – How can you save money when buying real estate?

Are you simply unable to find a suitable property that meets your price expectations? Then you should consider which of the influencing factors has the least importance for you. Can you find a compromise with yourself or your family by agreeing not to live so centrally, or to do without a terrace or balcony? These compromises can bring the price of the property closer to your expectations.

The location – Where should the property be located?

One of the most important factors influencing the price of a property is its location. How far is it to the city centre, to the nearest supermarket or to important doctors? This distance plays an important role for everyone. Nevertheless, a central location of the property is not the first priority for everyone. Many property buyers prefer to live in a quiet area to escape the stress of everyday life. Nevertheless, the most important shops or doctors should not be too far away. If it doesn’t have to be a big city or central location, it makes sense to compromise here and save money in this respect.

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Single-family house or terraced house – Which costs more?

What property is it? If it is a terraced house, you have directly adjacent neighbours. For this reason, the value of this property is lower than that of a detached house. In a detached house you have less noise from neighbours and you have more control over your own noise level. With a detached house you usually benefit from the advantage of having a larger green area at your disposal, whereas many people feel a little cramped in terraced houses. With a terraced house it is therefore advantageous if you know the neighbours beforehand and know that you would get along with them.

Check modernisation status – What measures have been carried out recently?

If a property appeals to you in many ways, it is still important to pay attention to the age of the property. If you don’t, you run the risk of having to deal with new costs very soon. What’s more annoying than having to worry about repairs or energy-saving measures to a newly purchased property? If damage to the property has not only been repaired immediately, but has also been combined with modernisation, this is considered to increase the value of the property. Recent measures such as improved thermal insulation or fire protection can be of enormous benefit to you.

Room layout – Every room needs meaning and purpose

The room layout in an apartment or house can also be of great importance. If a property is to be used as a shared flat, it is important that there are no through rooms. If a property is awkwardly cut, or even the room layout is not ideal, this will bring down the price of a property. Is the bedroom a suitable size for the furniture intended? Will a dining table fit in the kitchen or is there even an extra dining room? Many prospective buyers think very carefully beforehand about which room will serve which purpose. If a room should serve as a children’s room in the first years, then it is often already planned in advance what it could serve when the children have moved out.

Energy efficiency: saving energy and money

The energy efficiency should be checked carefully before buying a property. How old is the heating system? Are the roof and exterior walls adequately insulated? Are the windows double-glazed? These are the questions you should ask yourself before buying a property. But why is this the most important point that everyone should consider? If your purchased property satisfactorily fulfils these measures, you can save an enormous amount of money. If you are not able to check this information sufficiently yourself, it may be worthwhile to talk to an energy consultant. They will be able to tell you which renovation measures you should expect and how much you will have to pay in this respect.

Purchase prices for condominiums

This statistic compares the cities with the highest condo purchase prices from 2014 and 2018.

• Munich – Increase: 1,605
• Frankfurt am Main – Increase: 1,687
• Stuttgart – Increase: 1,181
• Potsdam – Increase: 1,835
• Berlin – Increase: 1,377

You can find more infographics at Statista Our Berlin guide: real estate Berlin.

Terrace or balcony – superfluous luxury or compulsory?

Many people who don’t benefit from the luxury of having their own garden wish they had a balcony or terrace instead. Who wouldn’t like to have breakfast outside when the weather is nice, or simply switch off without having to go to a public place? But unfortunately, this advantage is not available with every property. For this reason, it has a value-increasing effect on the property price.

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Demand influences the price

Having what everyone wants triggers a sense of achievement in many people. However, the higher the demand of a property is, the higher the property price will be in the end. Since the previously mentioned factors also influence the demand, this is closely related. If you opt for a more remote property, the demand also goes down and so does the price. If you own a slightly more remote property for which demand increases over time, you will benefit from an increase in value which can bring you a huge profit on resale. Additionally, if the property has been regularly refurbished or even modernised, you could make a big profit.

Residential rent index in Germany from 1995 to 2017

Not only do property prices depend heavily on the various influencing factors, but property rental prices also depend on these factors. These statistics show the development of rents in Germany.

• Residential rent index 2017 at 109.7 (increase 1.7)
• Residential rent index 2016 at 108 (increase 2.6)
• Housing rent index 2015 at 105.4 (increase 1.6)
• Housing rent index 2014 at 103.8 (increase 2.5)
• Housing rent index 2013 at 101.3 (increase 1.3)

You can find more statistics at Statista

Prefabricated house or solid house

If you decide not to buy a used house, but to build your own home, you will inevitably have to deal with the question of whether you want to build a prefabricated house or a solid house. A prefabricated house is usually cheaper than a solid house. But what are the advantages of which construction method? A big advantage of building a prefabricated house is that it is particularly fast and can be carried out in all weather conditions. The construction of a solid house takes longer. A solid house brings the advantage of a good indoor climate. In summer it does not get too hot and in winter it does not get too cold. The modern prefabricated houses also have good insulation.

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Now that you know which influencing factors determine the price of a property, it is worthwhile to use this knowledge to start looking for a suitable property again. Think about which influencing factors have priority for you and you will find a suitable property.