A forced auction (tvangsauktion) begins when a creditor with a claim (udlægshaver) on the property petitions the bailiff's court (Fogedretten) for a forced auction of the property. This creditor is called the petitioner (rekvirenten), and, together with the bailiff's court, handles the preparation and holding of the forced auction.
Are you considering buying a house at a forced auction? You should know that different rules apply here than for an entirely ordinary house purchase. Read more about the forced-auction process below.
Team up with one of Bomae's legal property advisers, who can help guide you through the buying process.
Why buy a house at a forced auction? There can be substantial savings if you choose to try buying a house – or holiday home – at a forced auction. You may be lucky enough to find properties at forced auction priced 10-20% below the market price compared with properties sold through a regular sale.
Read our guide to forced auctions below:
- Where to find properties at forced auction
- Are you allowed to view the property before buying
- Where the forced auction is held
Where do you find properties at forced auction? Properties to be sold at forced auction are announced at least 14 days before the auction date in the Official Gazette (Statstidende). In addition, properties can be found at www.tvangsauktioner.dk and www.itvang.dk.
They can also be found on the standard property portals www.boliga.dk and www.boligsiden.dk.
On these sites, you can find forced auctions throughout Denmark – whether you are looking for a forced auction in Zealand, Funen, or Jutland, you may well be lucky enough to find your dream home. Here you can find a freehold flat (ejerlejlighed) at forced auction in Copenhagen – or a villa at forced auction in Aalborg. It is therefore also important to decide which area you would like to settle in before you start looking.
What should I be aware of when buying a house at a forced auction?
Is it an agricultural property? Then there are a number of special rules you need to be aware of. Among other things, you must have permission from the Danish Agricultural Agency (Landbrugsstyrelsen) to buy the property, and you must also ensure that the auction deed is registered (tinglyst) within a year.
It is also important that you know that, in addition to the auction bid, you must pay the so-called “størstebeløb” (the largest-amount payment) and provide security (sikkerhedsstillelse). The størstebeløb covers, among other things, costs to mortgagees, creditors, and the petitioner's lawyer. At the same time, you must be able to immediately provide security for the purchase – meaning you must ensure, before you bid, that you have the necessary financing arranged with the bank. This is called providing security (sikkerhedsstillelse). You can read more about security and the størstebeløb here.
It is also important to know that you typically will not receive a condition report (tilstandsrapport) – and therefore no change-of-ownership insurance (ejerskifteforsikring). This means that you are liable yourself for any defects in the property. That is why viewing the property is very important.
Are buyers allowed to view the property at a forced auction? Since prospective buyers should not have to buy blind, you have the option of viewing the property together with the petitioner. However, note that only one viewing is held for all interested parties. You should therefore actively keep an eye on the viewing date so you can arrange to bring along a building surveyor.
In addition, a sales listing (salgsopstilling) is prepared for the property, containing information about it. This also shows the extraordinary amounts to be paid, since it is a forced auction.
What these extraordinary amounts include, we will come to later. The sales listing for the property is available on the websites mentioned above.
Where is the forced auction held? The forced auction is held at the bailiff's court (Fogedretten) in the judicial district where the property is located. First, the petitioner will present information about the property, and then the bailiff's court will accept bids.
When, despite three calls for higher bids, no higher bid is made, the auction ends with the fall of the hammer.
Once you have made a bid that becomes the final hammer-fall bid of the auction, you cannot withdraw your bid.
You therefore cannot cancel the purchase.
You can read much more about how to conduct yourself as a buyer at forced auctions.
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