Is enforcement of a low-value claim through the sale of real estate permissible?
In the enforcement proceedings at hand, the creditor filed a motion for enforcement against the debtor (Mr Vaskrsić) for the payment of EUR 124. The creditor initially demanded enforcement via the sale of the debtor’s movable property. After this was unsuccessful, the creditor suggested enforcement through the sale of the debtor’s real estate. The court granted the creditor’s motion and successfully sold the real estate. Mr Vaskrsić, for the most part, failed to engage in the enforcement process. Just one month prior to the real estate going to auction, he moved that the claim be settled using funds from his bank account, instead of through the sale of the real estate. The court eventually granted Mr Vaskrsić’s motion, albeit after the real estate had been sold (and after the decision on the allocation of the real estate was issued to the buyer). Despite the fact that the court had afterwards terminated the enforcement proceedings (as Mr Vaskrsić later repaid his debt), the court did not annul the decision on the allocation of the real estate, which is why the debtor’s real estate was validly sold to the buyer.
The foregoing decision of the enforcement court was upheld by all other judicial instances in Slovenia. It was only the ECtHR that allowed the debtor’s complaint. The ECtHR confirmed, inter alia, that the Slovenian Claim Enforcement and Security Act (Zakon o izvršbi in zavarovanju) does not set the minimum amount of a claim for which enforcement through the sale of a real estate is allowed, nor does it bind the courts to choose a less stringent enforcement measure in cases of disproportionality. However, in the opinion of the ECtHR, the sale of a real estate, where the claim amount is so low, constitutes a disproportionate measure (i.e. especially in light of the irreparable consequences incurred by the debtor due to the sale of his house). The ECtHR decided that Slovenia thus violated Protocol no. I to the European Convention on Human Rights and must pay EUR 80,000 in damages to Mr Vaskrsić.
Given the above, it is possible that creditors will no longer be successful with motions for enforcement through the sale of real estate where low-value claims are concerned. Consequently, creditors looking to enforce low-value claims (both in view of time and cost efficiency) should look at enforcement through the sale of moveable property, seizure of cash held in bank accounts or other similar means.
