The bill on foreclosure on single housing defines the debtor as an individual who is able to repay his own obligations to creditors only through single housing. If this situation becomes more complicated, it can be seen that an apartment often not only provides a citizen with housing right, but also serves as a luxury item. So, foreclosure on the sole housing of the debtor is prohibited by law. In turn, the courts make some changes and additions here, because of which, in practice, everything seems not so unambiguous. After all, it often happens that a bankrupt has several apartments, so there is a need to determine which one to leave as the only housing.
A difficult situation requiring foreclosure
It often happens that a citizen has some debt directly to the creditor. Often this situation is supplemented by the fact that of the property complexes possessing it, the value of which would cover the debt or most of it, there is nothing besides housing. That is why it would be advisable to consider the foreclosure on the only housing of the debtor and its order.
In any case, the citizen needs to know that, in accordance with the second part of Section 78 of the Law “On the Execution of Execution”, in the process of execution of proceedings, which is instituted through the relevant executive documentation in favor of the pledge holder directly, the recovery of property is somehow applied regardless of whether if the mortgagor (debtor) has other property.
It is important to note that the practice of foreclosing on the only housing of the debtor shows: current situations can be classified into two components:
- Mortgage Housing.
- The only housing.
Mortgage housing and all the nuances of the situation
The Federal Law on the Enforcement of the Only Housing in the first article says that in accordance with the real estate pledge agreement (in other words, with the mortgage loan agreement) the pledge holder (first party), who is directly the creditor in relation to the obligation secured by mortgage lending, the right to satisfy their own requirements in monetary terms to the debtor through this obligation from the value of the mortgaged property of the mortgagor (second party), as rules Before other creditors of the second hand, for the same exemptions as are established by federal law.
Thus, foreclosure on the only housing implies that in the case of securing a mortgage loan through an apartment, it does not matter at all whether it serves as the only housing or not. The provisions of the Civil Code of Russia say that the bank that provides this loan has the absolute right to foreclose on the debtor's housing. It is necessary to add that in such a situation, delays should be at least systematic, that is, observed more than three times during the year. In addition, the amount corresponding to the loan must necessarily exceed five percent directly from the size of the cost of housing.
Additionally
By the way, in the event that the mortgagee prefers to leave the mortgage subject (for example, the apartment that currently belongs directly to the mortgagor) to himself in accordance with the procedure established by the Law with regard to mortgages, and the cost that can be earned for the premises is not quite enough to cover obligations to the mortgagee in full, the debt in terms of the obligation secured by the mortgage loan is fully repaid, in addition, the obligation secured by the mortgage is obligatory visually terminated. The practice of foreclosing on the only housing of the debtor shows that the debt on the obligation secured by a mortgage loan is repaid if its amount is equal to or less than the value of the mortgaged residential property. It is important to add that this value should be determined precisely when a mortgage loan arises in an official form. This provision is given in accordance with the fifth paragraph of Article 61 of the Federal Law "On Mortgage".
It is important to add that in any case, there is a need to carefully study the content of contracts concluded with a particular banking structure, because fundamentally different lending conditions can be provided there. This means that the algorithm of actions will fundamentally change.
What else do you need to know?
It should be noted that the foreclosure on the only housing and the further sale of this property serve as a weighty reason in order to terminate the right to use it by the mortgagor, as well as other persons who live in this apartment or house. An important condition here, one way or another, is the mortgaging of property in accordance with a mortgage or mortgage agreement by force of law in the absolute provision for the repayment of a target loan or loan, which is provided by a banking or similar institution that develops the relevant activity. By the way, the provision of a loan for the construction or acquisition of a dwelling, as well as its overhaul or a fundamental improvement in terms of planning can be carried out by another legal entity.
If, prior to the formation of the debt and the execution of the mortgage loan, a lease or rental agreement was signed for the corresponding residential premises, then foreclosure on the only housing and the direct sale of this real estate through tenders suggests that the relevance of the lease or rental agreement remains one way or another.
By the way, in accordance with the law (Article 78 of the Federal Law "On Mortgage"), two methods can be considered with respect to foreclosure on residential real estate:
- Through the court: in order to implement the enforcement application, it is imperative to apply to the judicial authorities with a corresponding action and only after the court decision is received, it becomes possible to transfer housing for the purpose of its implementation.
- In an order excluding the court. In this case, foreclosure on a single housing through a court is irrelevant. Here, only a formal agreement between the bank (or another banking structure) and the borrower, certified by a notary, is sufficient. By the way, this method implies consent to foreclosure not only from the mortgagor, but also from people who directly own the given housing in accordance with the law of the general type of property. For example, from a spouse, other co-owners, or from guardianship authorities.
Provisions relevant today
In this chapter, it will be appropriate to consider the foreclosure on the only housing in 2017.The fact is that on 02.02.2017, the discussion of an interesting draft law in society was completed, which was developed by state authorities in order to implement the position of the Constitutional Court of Russia. It should be noted that it was expressed five years ago. In accordance with it, the court explained that immunity from the collection procedure must necessarily apply to housing, which is sufficient to fully satisfy the housing issue.
Previously, treatment and recovery (the year 2017 changed the situation) for the only housing of the debtor was prohibited in accordance with the Civil Code of the Russian Federation (procedural). The only exceptions were premises that serve as the subject of mortgage lending. Currently, the relevance of this provision, fortunately or unfortunately, has been exhausted.
Thanks to an innovative project, today the size of the housing, as well as its value, allowing the execution of foreclosure on mortgaged property (the only housing), must be specifically determined. So, it is possible to foreclose on residential real estate, the size of which is slightly more than twice the norm for providing housing space both for a citizen due to the state, and for absolutely all family members directly living with him. The relevant norm is established by local authorities. So, in Moscow, it is equal to eighteen square meters per person.
By the way, today the penalty on housing will be influenced by the cost of the premises themselves. So, it should not be less than twice the value of this real estate, which in size corresponds to the provision of housing. It is important to note that the average specific value of the cadastral value of real estate for the cadastral quarter in relation to the territory of the subject of Russia is also taken into account. Such characteristics, as a rule, go through the approval procedure under the legislation on valuation activities.
New bill and its features
The innovative project provides that the opinions of state representatives accompanying the foreclosure of a single dwelling justify the following points:
- A foreclosure is permitted if the debtor does not have at all money and other relatively expensive property, sufficient to fully satisfy the requirements of the claimant.
- A foreclosure is possible if there is no apparent concomitant disproportion between the size of the claims and the direct cost of the only residential premises in the enforcement proceedings.
- As the judicial practice shows, foreclosure on the only housing is possible provided that the salary and other actual incomes of the debtor citizen are disproportionate to his obligations.
An explicit basis for foreclosure is the determination of the judiciary, adopted on the basis of a statement by the claimant or the bailiff. The currently relevant project interprets what information must be indicated in this kind of documentation. The most important thing here is that the court sets the minimum amount that is sent to the debtor immediately after the sale of its premises. This amount, as a rule, is used to purchase new living space. As a rule, it has a standard framework and is considered normal for living fully.
The reaction of people to the law
The bill regulating the foreclosure on the only housing of the debtor, of course, has led to various public discussions.On the one hand, people are absolutely sure that this project will finally stop the complete impunity of many debtors, and lenders will finally be able to satisfy their requirements in accordance with the law. This project, according to the Russians, will eliminate from the human mind the idea that you can borrow money and not give it away (after all, nothing in this world just happens). How many deals regarding apartments will save such an interesting and useful bill!
On the other hand, society requires serious revision of the new decree, because it does not exclude the presence of a certain number of children for the debtor, which as a result may suffer the most. But they, in fact, are not guilty of anything.
Only housing
If the housing does not remain in the mortgage and the citizen is registered in it, and in the Unified Register of the State for Real Estate Rights and the State Real Estate Cadastre there is no data on other premises that belong to this debtor citizen, the apartment or house is considered to be his only housing .
The Civil Procedure Code of Russia says that the foreclosure on the only housing that is pledged is impossible in the same way as its treatment if for the debtor and his family living in this residential building, this housing is the only one suitable for a full stay on constant terms.
Thus, the law fully protects the rights of a citizen-debtor to organize housing conditions, but brings the other side of the obligation (creditor) in a situation where the debtor has property, but it is impossible to enforce it. Paradox!
Everything was resolved by Decree No. 11-P 14. 05
2012, the Constitutional Court of the Russian Federation issued Decree No. 11-P, where it did not admit in any way that the provisions of Article 446 of the Civil Procedure Code of the Russian Federation are contrary to the Constitution of the Russian Federation, as they are primarily aimed at ensuring absolute protection of the constitutional right to receive normal housing conditions, but at the same time launched some restrictions.
What is the position of the court? There are a number of relevant facts to date. First, the constitutional right to housing ensures the absolute fulfillment of a function that is very significant for society, and also allows a citizen to realize key rights and freedoms. The right to receive full-fledged housing conditions closely interacts with the principle of the Constitution, according to which the individual is considered nothing more than the highest value. So, nothing can cause a diminution of his dignity. That is why in the process of ensuring the absolute satisfaction of the interests of the creditor in terms of property, the legislator must necessarily guarantee the debtor the right to provide certain housing conditions.
Secondly, immunity in respect of property to the only housing owned by the debtor and, of course, his family, which is established by the second paragraph of the first part of Article 446 of the Civil Procedure Code, serves as an absolute guarantee of the socio-economic rights of these persons in the field of legal relations regarding housing and in no case contrary to the Constitution of the Russian Federation.
What else?
Several conclusions of the court’s position regarding the reaction Decree No. 11-P was considered in the previous chapter. What else is relevant today? Thirdly, the spread of immunity in terms of property for housing, the dimensions of which slightly exceed the average values, and its cost is enough to fully satisfy the requirements of the lender, significantly upsets the balance of legal interests that relate directly to participants in enforcement proceedings.Thus, immunity to this kind of living space is completely unreasonable. It disproportionately restricts the legal rights of a creditor. That is why the Constitutional Court of the Russian Federation made it the duty of the legislator to clearly establish the limits of immunity in terms of property, as well as providing guarantees that would preserve the living conditions for a debtor citizen and, of course, his family, necessary for a normal existence.
In addition, the legislator is obliged to organize an order regarding the collection of debtor's housing, as well as to clarify the list of persons who are living together with a citizen-debtor. The Constitutional Court of the Russian Federation noted that the process of foreclosure on such residential real estate (or some part thereof) should be carried out exclusively by a court decision and only if the judicial authority considers that in any case it exceeds the standards established by law, and the debtor's income is disproportionate to his obligations directly to the creditor.