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Public Auction of Items That Are Subjects of Enforcement Now Available in Several Clicks


Did you know that now it is possible to buy items which are subject to enforcement in public biddings – and it is just a few clicks away?

Up till now, the Law on Enforcement and Security Interest prescribed that movable assets and immovable property selling in enforcement proceedings should be done through an oral public auction, and it was prescribed that the conclusion on the sale should be published on the electronic bulletin board of the Chamber as well as in the usual way. In accordance with that, the advertisements regarding public auctions were available on the electronic bulletin board of the Chamber of the public enforcement officers, as well as on websites of Competent Courts. Besides that, it was possible to search these kinds of auctions on several websites, however, since they were owned by private entities, they were not considered reliable.

Even though it had been fairly easy to find advertisements about public auctions, they occurred in a specific spot in a specific city, meaning that those who wished to participate had to travel hundreds of kilometers to get to the place of auction, for example, someone who lives in Belgrade (located in central Serbia) had to travel to Niš (located in the southeast of Serbia).

Since the outbreak of COVID-19, preventive measures had to be taken which naturally, led to public auctions having to adapt to these changes, so auctions held in person were hindered and not recommended, since the goal was to prevent the spread of the virus .

Additionally, solving far greater problems than COVID-19 was at stake, such as abuses where the “victim” was always the enforcement debtor. In practice, the bidders colluded in order to get the auctioned item for a lower price, they paid competitors to give up the purchase, which led to items, especially immovable ones being sold for a price far lower than their market value. Besides, there were disparate ways of pressuring competitors to give up their participation in the public auction.

To overcome these problems, an online system of public auctioning was introduced. On August 14, the website e-Auction was created, through which it is possible to buy properties that are subjects of enforcement. So far, this method of selling is not compulsory, but it will be from September 1. The Ministry of Justice has published on its website the Rulebook for the use of the e-Auction platform , with steps showing you how to register and participate in the public auction.

To register you need to have an electronic signature issued by one of the Certification Bodies . After successful registration, the user gets instructions on how to pay the membership which lasts a year. The user can appear on the public auction as a natural person, the legal representative of a legal person, a general (for all public auctions) and a particular proxy (for specific public auctions).

People can easily go through the platform since it is divided into 3 categories: movable assets, immovable property, joint sale of movable assets and immovable property. Apart from that, it is also possible to browse tags such as cars, appliances, houses, property, etc.

After the user has found the item of their interest and signed up for the auction, they receive an e-mail with payment instructions. After enclosing the payment proof, the user may start the bidding by clicking on “bid” and entering the PIN code from their e-signature. The user cannot bid a random amount since the starting price is already determined.

The auction lasts for 13 hours. If in the last 5 minutes a new bid appears, the auction is prolonged for 5 minutes and this can go on until they reach the 15 th hour.

It is not necessary to register to view the ongoing or upcoming auctions. Everyone can log to the website and check the available items with their detailed description, ballpark estimate, starting price, bidding increment (how much the amount has to increase), start and end time of the auction as well as information about the debtor and creditor .

The online auction system has caught on in several countries of the EU: Austria, Croatia, Hungary, Germany, and others. In certain countries, the system is fully utilized, while in others it is only utilized for immovable property (for example in Latvia and the Netherlands)[1]. In the USA, this system is also used for items that were seized because they were obtained through criminal activity[2], as well as property confiscated by the Internal Revenue Service (IRS) [3].

The advantages are obvious – online purchase is much easier, items are sold faster since everyone can participate no matter the location, which causes greater demand and items being sold for a higher price[4]. All bidders are anonymous meaning that no one, not even the public enforcer nor the bidder knows who stands behind the numbers assigned by the system. This was designed as an efficient way of preventing the aforementioned misuses since now the possibility of making a deal with other bidders is completely removed.

Because online auctions have now been implemented in more than 10 countries, and the results show that it is an excellent solution for many problems which we face when the biddings are held in person, it is expected that this system will gain traction in no time.

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Aleksandra Jaćimović


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