Expatica news

Electronic auction of seized goods raises €300 million and helps debtors

6208aProperty and goods seized by the State are now sold off via a Internet auctions, enabling higher prices to be achieved.

These electronic have made the range of seized cars, goods and properties more accessible to the public and fairer prices achieved.

Property can be the result of debt collection procedures or from the proceeds of crime, whatever the source it was long the case that the closed bid auction system failed to achieve sensible selling prices, leaving the debtor severely disadvantaged.

This was been the case with many property sales with former owners complaining that the auction price was nowhere near the market value that could have been achieved.

The use of the new system “is the recognition by the Ministry of Justice that electronic auctions are a tool that works and is worth using,” said José Carlos Resende, a member of the Order of Solicitors and Execution Agents (OSAE).

Electronic auctions have been available since July 2016, replacing the traditional ‘sealed envelope’ sales and have been much more transparent, ensuring that goods are sold at prices that are closer to their real value.

This is big business as, so far this year, €300 million has been raised from 5,621 auctions resulting in 2,916 sales. The money raised has been used to cover outstanding debts of private individuals who had been dragged through the courts.

The number of auctions carried out increased substantially in 2017 compared to 2016. When the electronic auction service started, 425 sales were made, totalling €36.2 million.

There is now a much greater transparency in sales, and those handling the sale of goods and property have realised that they are going to win by selling in this way instead of the traditional ‘sealed envelope’ system.”

The head of the OSAE estimates that “the average value of property sales, for example, is rising from 30% to 70% of its valuation.”

“This is positive for the creditor, because he receives more, and also for the debtor who used to end up without his house and still with a huge debt to pay, since the amount collected did not cover everything,” said Resende.