Property auction lawyer in Paris: adjudication, seizure and overbid.

The adjudication hearing is held before the enforcement judge of the Paris judicial court, in the auction room. The judge first checks that the preliminary formalities have been properly completed: publication of the formal demand to pay operating as a seizure order, posting of notices, and insertions in newspapers carrying legal notices. The lawyer acting for the creditor reads out the description of the property and restates the reserve price set by the orientation judgment. Bids are then placed to the rhythm of ninety-second candles: as long as a new bid is placed within the allotted time, a new candle is lit. The property is adjudicated to the highest bidder once the last candle has burnt out without a further bid. The adjudication judgment is delivered on the bench and constitutes the new buyer's title to the property, subject to payment of the price within the statutory period of two months. Anyone may attend the hearing, but only lawyers registered with a bar may bid.

Any natural or legal person with capacity to contract may bid, with the exception of the seized debtor (who cannot bid on their own property), the judges of the court and their relatives. In practice, bids must be placed by a lawyer registered with a bar, who acts on behalf of their principal. A bidder therefore cannot attend the hearing alone: they must instruct a lawyer, give them an express mandate, and hand over an irrevocable bank guarantee or a bank cheque equal to 10% of the reserve price. Before placing bids, the lawyer must obtain this guarantee from their principal against a receipt (Article R. 322-41 of the Code of Civil Enforcement Procedures). The principal's identity is revealed only when the last accepted bid is made, by producing an identity document or a Kbis extract depending on the nature of the bidder.

Yes, it is an absolute requirement. Article R. 322-40 of the Code of Civil Enforcement Procedures provides that bids are placed through a lawyer registered with the bar of the judicial court before which the sale is pursued. In Paris, the lawyer must be registered with the Paris Bar or have appointed a local representative. This requirement safeguards the regularity of the procedure and secures payment: the lawyer obtains the necessary financial guarantee from their principal against a receipt. The mandate must be express and precise: name of the principal, description of the property, ceiling of the authorised bid. The lawyer acts as representative and binds the principal. At the end of the hearing, the lawyer draws up the adjudication slip and assists the client with depositing the price and paying the preliminary costs.

The ten per cent overbid is the mechanism that allows any interested person to increase the adjudication price by 10%, thereby triggering a new auction hearing. It is governed by Article R. 322-51 of the Code of Civil Enforcement Procedures. On pain of inadmissibility, the declaration must be made by a lawyer's deed, filed at the registry of the enforcement judge within ten days of adjudication, and accompanied by a certificate from the lawyer confirming that they hold an irrevocable bank guarantee or a bank cheque equal to one tenth of the principal price of the sale. The declaration must be notified to the successful bidder, the creditor bringing the proceedings, the seized debtor and the registered creditors within three days. The validity of the overbid may be challenged within fifteen days of that notification. If the declaration is in order, a new hearing is set, at which the property is put up for sale again on the basis of the increased reserve price. An overbid cannot be withdrawn.

Yes, but the timetable is strict. The seized debtor must concentrate their grounds at the orientation hearing. Article R. 311-5 of the Code of Civil Enforcement Procedures provides that no challenge or incidental application may be made after the orientation hearing, on pain of inadmissibility raised by the court of its own motion, unless it concerns procedural acts subsequent to that hearing. The Court of Cassation applies this rule rigorously. At the orientation hearing, the debtor may challenge the regularity of the formal demand, whether the claim is ascertained in amount and due, the valuation of the property, the reserve price and the terms of the conditions of sale. The debtor may also apply for authorisation to carry out an amicable sale, which must take place within a maximum of four months, extendable by three months. Once the orientation hearing has passed, room for manoeuvre narrows considerably: only subsequent acts and new circumstances capable of preventing the seizure from continuing remain open to challenge. Instructing a lawyer as soon as the formal demand is served is therefore crucial.

The conditions of sale are the reference document for the auction sale. They contain several sections to be examined carefully. First, the origin of title and the cadastral description, which identify the property precisely. Second, the reserve price set by the orientation judgment, from which bidding will start. Third, the charges and special conditions: easements, co-ownership, occupation by a tenant or an occupant paying no rent, works to be carried out, the actual rental situation. Fourth, the mortgage status certificate, which reveals the registrations encumbering the property. Fifth, the valuation drawn up by an expert. Several classic pitfalls call for vigilance: an adjudicated property remains subject to its charges, it may be occupied without title by occupants who are difficult to evict, and it may have defects that are not visible on a simple reading. The firm recommends that every serious bidder visit the premises on the organised viewing day and have the conditions of sale analysed by a lawyer before the hearing.

The successful bidder pays more than the adjudication price. Several categories of costs must be anticipated. First, the taxed preliminary costs, which cover the acts of the court commissioner (commissaire de justice), publications and the steps taken by the creditor bringing the proceedings. These costs are taxed by the judge at the adjudication hearing and paid on top of the price. Second, registration duties and property taxes (5.80% on average, depending on the département), payable within the statutory period after adjudication. Third, the fees of the bidding lawyer, which are freely negotiated. Fourth, any overbid costs if the sale is re-opened. A serious bidder generally budgets 8 to 12% in costs on top of the adjudication price. For a property adjudicated at €300,000, a total budget of around €325,000 to €335,000 should therefore be planned, to be deposited or paid within the two-month period provided for by Article R. 322-56 CPCE. Poor planning exposes the bidder to a failed bid (folle enchère) and its heavy financial consequences.

A successful bidder who does not deposit the price within the two-month period provided for by Article R. 322-56 CPCE becomes a defaulting bidder (fol enchérisseur). The procedure for re-running the auction, provided for by Article L. 322-12 CPCE, may then be started. The creditor bringing the proceedings first sends a formal notice to pay within eight days. If the successful bidder does not comply, the creditor applies again to the enforcement judge to set a new auction hearing. The defaulting bidder must be summoned to that hearing: the Court of Cassation has held that the defaulting successful bidder, who owns the property for as long as the termination of the sale has not been recorded, must be summoned to the adjudication hearing on the re-run of the auction, to which they are a party (Cass. 2e civ., 9 June 2022, No. 20-21.352, Bull.). If the property is resold at a lower price, the defaulting bidder bears the difference between their initial bid and the resale price, and cannot claim any refund of sums already paid in respect of costs.

No. The adjudication judgment fixes the price: no after-the-event negotiation is possible with the creditor bringing the proceedings or the seized debtor. Adjudication is firm and final, subject to payment of the price and costs. The only openings are the ten per cent overbid by a third party (which raises the price by 10% but never lowers it) or termination of the sale if the successful bidder defaults (which leads to a new sale, not a renegotiation). This rigidity justifies careful preparation in advance: a prior viewing, an audit of the conditions of sale, calculation of the total budget including costs, and a bidding ceiling set in writing with the lawyer. A bidder who gets carried away at the hearing and exceeds their ceiling has no way of going back, other than becoming a defaulting bidder themselves, which has heavy financial consequences. Budgetary discipline is therefore essential.

An amicable sale is the option offered by the enforcement judge to the seized debtor at the orientation hearing. If the debtor applies for it and shows a serious prospect of selling to a buyer of their choice, the judge may authorise an amicable sale, which must take place within a maximum of four months, extendable once by three months. The debtor keeps control of the sale: they negotiate the price, choose the buyer and sign the preliminary sale agreement, which the judge then approves. A forced sale by adjudication is the classic route: the property is put up for public auction in the auction room, with the debtor having no say on the identity of the buyer or the final price. An amicable sale has several advantages: a price that is often higher (the open market being more dynamic than an auction), no auction-room costs, and the possibility of negotiating the terms with the buyer. It does, however, require the debtor's cooperation, their ability to put forward a solvent buyer, and compliance with the strict timetable set by the judge.

The reserve price is the amount from which bidding starts. It is set by the orientation judgment, on the proposal of the creditor bringing the proceedings and after hearing the seized debtor. The creditor sets it freely, but it is not in its interest to set it too low: if no bidder comes forward, the property is adjudicated to the creditor automatically at the amount of the reserve price. The reserve price is generally set between 50% and 80% of the expert valuation of the property, depending on market conditions and the level of the debt. The seized debtor may challenge the reserve price at the orientation hearing: they may argue that it is manifestly insufficient in view of the property's real value, which would expose the property to a sale at a knock-down price. The judge decides on the basis of the valuation and the arguments put forward. At the adjudication hearing, bidding builds up from the reserve price in increments chosen at will by the lawyers, until bidding stops and the property is adjudicated to the highest bidder.

The time limits are strict and vary according to what is being challenged. To challenge the formal demand to pay, the regularity of the procedure or the valuation of the property, the seized debtor must act before the orientation hearing, on pain of time bar. Once the orientation hearing has passed, Article R. 311-5 CPCE makes new challenges inadmissible, unless they concern later acts or new circumstances capable of preventing the seizure from continuing. To challenge the validity of a declaration of overbid, the time limit is fifteen days from notification to the parties. To challenge the adjudication judgment, an appeal is available only in strictly listed cases and within a short time limit. An appeal to the Court of Cassation remains open in cases of excess of power, as in the case law of Cass. 2e civ., 9 June 2022, No. 20-21.352 (Bull.), which penalises the failure to summon the defaulting successful bidder to the re-run hearing. The golden rule: act quickly, ideally before the orientation hearing, where everything is decided.

Yes, the creditor bringing the proceedings or any registered creditor may make an overbid, on the same conditions as any other interested person: a declaration by a lawyer's deed within ten days of adjudication, accompanied by a bank guarantee certificate. This strategy is used when the property has been adjudicated at a price the creditors consider insufficient to cover their claim. The overbid then requires a new auction hearing with a reserve price increased by 10%. If no third party comes forward at a higher price at that new hearing, the overbidding creditor becomes the successful bidder at the amount of the increased reserve price. They must then deposit the price and pay the costs like any successful bidder, on pain of becoming a defaulting bidder. This operation has a cost and is not without risk: the creditor takes the property at a price that may prove higher than its real value. It is justified above all where the creditor believes it can resell the property quickly at a better price, or has strategic plans for the building. The firm advises creditors on whether this strategy is appropriate, case by case.

The overbid hearing follows the same procedure as the initial adjudication hearing. It is set by the court registry following a regular declaration of overbid. All interested parties are notified: the initial successful bidder, the creditor bringing the proceedings, the seized debtor, the registered creditors and the overbidder. The reserve price is now the initial adjudication price increased by 10%. At this hearing, anyone may bid through a lawyer, including the initial successful bidder who was displaced by the overbid and may try to recover the property. If a bid higher than the new reserve price is placed, the property is adjudicated to the highest bidder. If no bid is placed above the new reserve price, the property is adjudicated to the overbidder at the amount of the increased reserve price. The overbidder then becomes the successful bidder and must deposit the price within two months. An overbid is therefore a binding act: the overbidder is bound and must complete the purchase if no third party places a higher bid.

The firm adapts its proposal to the nature and complexity of the case. For a seized debtor wishing to prepare for the orientation hearing, the assistance covers an audit of the formal demand, a reading of the conditions of sale, drafting of the submissions challenging the seizure, oral argument at the hearing, and post-orientation follow-up. For a bidder or prospective successful bidder, the assistance covers an audit of the conditions of sale, calculation of the total budget, bidding strategy, territorial representation (postulation) at the adjudication hearing, the declaration of overbid, or the steps for deposit and publication. For an overbidder, the assistance includes drafting the declaration of overbid, notifying the parties within three days, and territorial representation at the overbid hearing. Fees are set at the start of the engagement after analysis of the case. The firm favours transparency and predictability: a detailed quote is provided from the first appointment. For a first analysis of conditions of sale that does not commit you to further instructions, you can count on a quick consultation at a fixed fee.