Significant Amendments to the Enforcement and Bankruptcy Law

The Law numbered 7343 introduced significant amendments to the Enforcement and Bankruptcy Law No. 2004 (“EBL”), in particular regarding the forced sale of movable and immovable properties subject to seizure. The amendments made to EBL can be summarised as follows:

• The authority to decide for the postponement of the execution is granted to the Enforcement Court of the place where the execution proceedings are carried out.

• The estimated price of a seized property (subject to the sale) must be determined with an appraisal report issued by a valuation expert if such properties are registered in an official registry.

• In case of an action for the recovery of property, if a movable property is jointly possessed by the debtor and the third party and the latter accepts to be trustee, such property will not be taken into custody by the execution office. If the Enforcement Court decides to continue the execution proceedings upon creditor’s or debtor’s objections against the recovery action, then the movable property can be taken into custody.

• The request for the sale of seized movable properties should be made within 1 year after the seizure of such properties. If the seized property cannot be sold despite the timely request, the period to request for the sale will extend for a further 1 year. All valuation and sales expenses must be paid in advance at the time of the sale request.

• Documents (including agreements and etc.) certifying the debtor’s commitment regarding the payment of his debt in instalments is exempted from stamp tax.

• The debtor can request from the execution office to grant him the power to sell the seized property within seven days starting from the issuance of the appraisal report.

• The auction for the sale of seized properties will be conducted via an electronic platform integrated with the National Judiciary Informatics System (UYAP).

• In case of a sale through tender, the tender winner is obliged to deposit the sale price in cash within 7 days following the issuance of the tender minutes. Filing of a request for cancellation of the tender does not eliminate this obligation.

The amendments aim to address the hurdles that are encountered in practice and accelerate the sale of seized properties. The amendment enabling the sale of seized properties in an electronic platform is a vital and innovative change in terms of the implementation of EBL.