Seizing, Handling of Asset & The Right to Initiate a Lawsuit
The enforcement procedure in general and civil judgment enforcement in particular which take less attention, but it plays a very important role in a dispute. If the judgment debtor has conditions but does not voluntarily enforce the judgment, at this time the judgment enforcement agency has the right to enforce the judgment. Seizing, handling of asset of judgment debtor is one of the grounds for coercive the judgment enforcement according to Article 71.3 of 2008 Law on Civil Judgment Enforcement, which was amended and supplemented in 2014 (Law on Civil Judgment Enforcement). The orders and procedures of seizing and handling of asset of judgment debtors are quite strictly regulated by laws; It is often applied in practice.
According to Article 207 of 2015 Code of Civil: “Common ownership means ownership by multiple subjects over an asset. Common ownership includes common ownership by portion and common ownership by integration. Asset under common ownership is common asset.”
And according to Article 74 of Law on Civil Judgment Enforcement; Article 2, Article 7 of Joint Circular No. 11/2016/TTLT-TANDTC-VKSNDTC on seizing, handling asset in the common asset are regulated at below:
Condition for Seizing Common Asset
The Civil Judgment Enforcement Agency only seizes and handles common asset which is land use rights, houses and other assets attached to the land in the following cases:
- When other assets are not enough to enforce the judgment; or
- By request of the requestor.
Determining the Portion of Asset in the Common Asset
The common asset of the judgment debtor with other people can be determined the portion of owned or cannot be determined the portion of owned and use of joint owners.
Seized asset in common asset which is determined the owned from the joint owners shall be handled as follows:
- For divisible common asset, the Enforcer shall apply coercive measures to the portion of the asset corresponding to the portion owned by the judgment debtor.
- For common asset that cannot be divided or if the division significantly reduces the value of the asset, the Enforcer may apply coercive measures to the entire asset and pay back to the joint owners the remaining value of the asset according to their ownership.
For common asset which cannot be determined the portion of owned and use:
- Joint owners have the right to initiate a lawsuit to request the Court to determine their portion of owned in the common asset. Within 30 days from the date of receipt of the notice, if the joint owners do not initiate a lawsuit, the judgment creditor or the Enforcer has the right to request the Court to determine the portion of the judgment debtor’s owned in the common asset to secure the judgment enforcement.
- For assets owned and used by husband and wife: For assets jointly owned and used by husband and wife, the Enforcer shall determine the portion of owned by husband and wife in accordance with the law on marriage and family and notify such to husband and wife. In case the husband or wife disagree, they have the right to initiate a lawsuit to request the Court to divide the common asset within 30 days from the date on which the portion of owned is determined by the Enforcer. Upon the expiration of the above time limit, if the involved parties do not initiate the lawsuit, the Enforcer shall handle the assets and pay back to the husband or wife of the judgment debtors the value of the assets under their ownership.
- For assets owned and used by households: The Enforcer shall determine the portion of owned and used according to the number of members of the household at the time of establishment of the ownership of asset, the time of approval by the Government on land allocation, land lease, recognition of land use rights, receipt the transfer of land use right. The Enforcer shall notify the household members of the results of determining the portion of owned and used. Similar to the common assets of husband and wife, if the household members disagree, they have the right to initiate a lawsuit to request the Court to divide the common assets within 30 days from the date on which the portion of owned is determined by the Enforcer. Upon the expiration of the above time limit, if the involved parties do not initiate a lawsuit, the Enforcer shall handle the assets and pay back to household members the value of the assets under their ownership.
Preemptive Right to Purchase of Joint Owner
When selling the common assets, the joint owner has the right to preemptively purchase the asset. The preferred selling price for the joint owners of the common assets of the judgment debtor is the fixed price.
Procedure of Purchasing Common Asset
- For real estate and movable asset which the ownership and use rights must be registered. The Enforcer shall issue a decision to sell the asset to the joint owner or issue a decision to hand over the assets to the judgment creditor.
- For movable assets that is not subject to registration of ownership or use rights, the Enforcer shall make a minute of handing over the assets to the joint owner or the judgment creditor.
It can be seen that the current legal regulations provided a relatively complete and clear regulation on the handling and responsibilities of the involved parties in the issue of determining
the common ownership assets, at the same time, regulated the preemptive right to purchase the judgment debtor’s portion of the assets in common ownership. But in practice, how to handle the portion of assets of the judgment debtor with others to ensure the enforcement in accordance with the laws and minimizing the complainant of the involved parties is a very necessary and important. Therefore, the Enforcer are required to be very strict in the implementation of the enforcement procedure. And to ensure the legitimate rights and interests, the involved parties need to clearly understand some general principles as follows:
When conducting seizing asset, the asset which is private ownership shall be seized first, then the asset in common ownership of the judgment debtor with other people.
- The Enforcer shall only seize and handle asset of judgment debtor under the common asset after having written agreement on division of common asset of joint owner or having obtained a Court judgment on the determination of common asset.
- Prior to coercive against asset in common ownership of the judgment debtor with other people, including land use rights, the Enforcer must notify the joint owner of the coercion.
- Common asset according to marriage and family cases, inheritance cases that have been settled by the Court are not applicable under Article 74 above, because the judgment creditor and the judgment debtor are persons in the same judgment or decision.
If you have any questions or concerns about the difficulties and obstacles in the civil judgment enforcement procedure and finding solutions for the seizing, handling of common assets or exercising the right to initiate a lawsuit under the provisions of the Law on Civil Judgment Enforcement, our experienced lawyers on Enforcement are always available at info@letranlaw.com.