Placepoint

Tvangssalg

Tvangssalg (forced sale) is the sale of real property carried out by the district court against the owner's will in order to cover a monetary claim. It is the last resort when a hjemmelshaver (registered title holder) fails to pay interest, instalments, felleskostnader (shared costs) or an attachment lien, and it happens after a lienholder or attachment claimant has petitioned the court for realisation.

The rules are set out in the Enforcement Act, in particular chapter 11 on forced sale of real property and chapter 12 on enforced coverage in housing cooperative shares. The case starts with a petition to the district court in the judicial district where the property lies. Most commonly, a bank with a pant (lien) registered in Grunnboken demands a sale after default, but Skatteetaten, the municipal collection office, eierseksjonssameier (unit ownership associations) or borettslag (housing cooperatives) can also petition for a forced sale when the claim has a sufficient basis (a judgment, a decision or a registered legalpant, a statutory lien). Eierseksjonssameier and borettslag hold a legalpant for unpaid felleskostnader of up to 2 G (eierseksjonsloven § 31, burettslagslova § 5-20) and use it to clear up units in chronic default.

Once the petition is granted, the district court appoints an assistant, usually an estate agent or a lawyer, who conducts the sale on behalf of the court. The property is marketed in the ordinary way and is, as a rule, sold through a bidding round. Bids are approved by the district court by ruling, not by the seller. The buyer receives a skjøte (deed) after the ruling becomes final and the purchase price has been paid; the court's assistant handles registration and settlement. The sale proceeds are distributed according to the order of priority in Grunnboken: the order of priority follows the time of registration under section 20 of the Land Registration Act, while the distribution rules themselves are in section 11-36 of the Enforcement Act. First-priority liens are covered first, then second priority, and finally any remainder goes to the hjemmelshaver. Encumbrances without coverage are deleted as part of the sale.

It is important to distinguish a forced sale from a bankruptcy sale and from a voluntary sale during debt negotiations. In a bankruptcy of the hjemmelshaver, the estate controls the property and can choose to realise it, possibly by agreement with the lienholders. In a forced sale, it is the individual lienholder's claim that drives the process, and the hjemmelshaver can in theory still avert the sale by settling the claim before the hammer falls.

The forced sale is visible in several places in Grunnboken. The petition is registered as an annotation on the property's land register page and gives notice to other rights holders. It also provides the basis for urådighet (a restriction on disposal): the hjemmelshaver can no longer freely sell, pledge or encumber the property without the court's consent. For a buyer in the market, the annotation is a strong signal: a property under forced sale is bought "as is" without the ordinary seller obligations under the avhendingsloven (Alienation Act), and the buyer must investigate carefully. A forced sale often gives a lower sale price than a voluntary sale, because the timeframe is tight and the seller has no incentive to prepare the property. Even so, prices are not in free fall: the court's assistant is obliged to obtain the "probable market value" and can reject bids that are clearly too low.

In Placepoint, you see registered annotations about forced sale, restriction on disposal and bankruptcy in the encumbrance overview in the property panel, so you pick up early on properties where the ownership situation is under pressure.

How it looks in Placepoint

In Placepoint, you find this in Property panel:

Tvangssalg in Placepoint

From Placepoint's dictionary: Tvangssalg

More information: Lovdata: Tvangsfullbyrdelsesloven chapter 11 (real property), Lovdata: Tvangsfullbyrdelsesloven chapter 12 (housing cooperative shares), Kartverket: Registration of forced sale, Store norske leksikon: tvangssalg

English: Forced sale (court-ordered sale of real property).

Common questions we come across

Who can petition for a forced sale?

Any creditor with a registered pant or attachment in the property, as well as eierseksjonssameier and borettslag for unpaid felleskostnader through a legalpant of up to 2 G. The claim must be due and in default.

How is the price set in a forced sale?

The court's assistant, normally an estate agent, markets the property and holds a bidding round. The district court approves the highest bid by ruling, provided that it covers the probable market value.

Does the seller receive any of the sale proceeds?

Only if the sale proceeds exceed the total lien debt and costs. Lienholders are covered first, by priority in Grunnboken, then any attachment holders. Any remainder goes to the hjemmelshaver.

Do the encumbrances carry over in a forced sale?

Liens and attachment encumbrances without coverage are deleted as part of the forced sale. Easements, lease agreements and other established rights may, however, remain in place, depending on priority and the content of the ruling.

Can the buyer make a complaint after a forced sale?

The property is sold as is, and the seller's liability under the avhendingsloven does not apply in the same way as in a voluntary sale. The buyer must investigate the property carefully before bidding.