Changes in legislation concerning bailiff security interest

19. 4. 2016

The amended Rules of Enforcement have brought many changes in the debt recovery procedure by means of enforcement. For example, the aforementioned amendment has fundamentally transformed the concept of bailiff security interest.Bailiff security interest may no longer be used for direct enforcement

Bailiff security interest is no longer a way to carry out enforcement, as was previously the case. Therefore, it is no longer possible to use bailiff security interest to recover a debt by means of enforcement. It may only be used to secure a debt. The new legislation concerning bailiff security interest is therefore different from judicial security interest, provided for in the Rules of Civil Procedure, which may continue to be set up as part of judicial enforcement of a judgement.

More initiative on the part of the obligee

With effect from 1 July 2015, the obligee must first submit to the bailiff a motion to establish bailiff security interest, determining the immovable property to be encumbered by bailiff security interest and proving that the relevant immovable property is owned by the obligor. It is irrelevant what claim the obligee has in relation to the obligor and on what grounds.

If the obligee's motion meets all the aforementioned requirements, the bailiff will issue a writ of execution to establish security interest. In addition, the obligor will not be informed of this fact by a "standard" notice that the obligor would receive in the event of a writ of execution used to commence enforcement proceedings for the purpose of debt recovery.

The obligee is not entitled to reimbursement of cost in relation to the bailiff. On the contrary, if the obligee fails to pay the cost of the enforcement, it will not be possible to carry it out. The actual act of carrying out enforcement then ends at the moment when the writ of execution to establish bailiff security interest comes into force.

Once the writ of execution comes into force, it will also be up to the obligee's initiative to file a motion with the relevant land registry department to register the bailiff security interest in the Land Register. An administrative fee of CZK 1,000 must be paid for this motion (i.e. the same fee as for any other proceedings for registration in the Land Register).

Less chance of recovering a debt by means of enforcement

With regard to this amendment, we would like to point out that enforceability of debts within enforcement may be partially decreased. In this context, we also recommend that you pay maximum attention to the property situation of the debtor as a potential obligor – if only because the amendment to the Rules of Enforcement has also stipulated a binding order of the possible ways of carrying out enforcement.

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