Real estate seizure and forced realisation constitute the ultimate enforcement measure against a defaulting property owner. They are governed by the Federal Act on Debt Enforcement and Bankruptcy (DEBA) and give rise to complex procedures involving several parties: the enforcement office, the court, mortgage creditors, tenants and the owner. PBM Avocats intervenes both to defend the interests of debtors seeking to avoid or delay realisation, and to assist mortgage creditors in the effective conduct of pledge realisation proceedings.
Enforcement by Way of Realisation of a Real Estate Pledge (arts. 151 et seq. DEBA)
When a debtor fails to repay a mortgage loan, the creditor bank may initiate enforcement by way of realisation of a real estate pledge (art. 151 DEBA). This route is distinct from ordinary enforcement by way of seizure or bankruptcy. The creditor submits an enforcement request to the enforcement office (EO) at the place where the property is located. The EO notifies the debtor of a payment order specifying the secured claim and the relevant mortgage certificate or mortgage. The debtor has ten days to file opposition; if they do not, the EO may, six months after the enforcement request, be required to proceed with the auction sale of the property.
Lifting of opposition takes place through judicial proceedings (definitive lifting action if the claim is established by a judgment or enforceable instrument, or provisional lifting on the basis of a pledge instrument). PBM Avocats represents debtors in these lifting proceedings and examines whether legal remedies (set-off, prescription, procedural defects) can delay or halt forced realisation.
Property Auction and the Schedule of Charges
Before the auction, the EO draws up a schedule of charges (Lastenverzeichnis / état des charges, art. 140 DEBA by reference), which lists all charges encumbering the property: pledge rights (mortgage certificates, mortgages), easements, land charges, land register annotations, tenants' rights. This document is essential for potential bidders, as it determines which charges will be taken over by the successful bidder and which charges will be repaid from the sale proceeds.
The reserve price generally corresponds to the amount of charges to be taken over by the successful bidder. Mortgage creditors of higher rank are satisfied first from the auction proceeds, in the order of their ranking in the land register. Lower-ranking creditors and unsecured creditors are only paid from the remaining balance. If proceeds are insufficient to satisfy all creditors, the latter receive a certificate of loss (art. 149 DEBA) for the unrecovered amount.
Stages of the Real Estate Seizure Procedure
| Stage | Content | Indicative Timeline |
|---|---|---|
| 1. Payment order | Notification to the debtor by the enforcement office | Day 0 |
| 2. Lifting of opposition | If the debtor files opposition, the creditor must seek its lifting | After opposition |
| 3. Seizure request | Creditor requests seizure of the property (1-year deadline) | After lifting |
| 4. Land register annotation | Registration of the seizure in the land register | A few weeks |
| 5. Official valuation | Valuation of the property by the office | Several weeks |
| 6. Auction | Publication, sale to the highest bidder | 6–18 months after seizure |
| 7. Distribution of proceeds | Payment of creditors in order of rank | After auction |
Real Estate Seizure in Ordinary Enforcement Proceedings (arts. 89 et seq. DEBA)
An unsecured creditor (without real security) may have a debtor's property seized in the context of ordinary enforcement by way of seizure. The seizure of the property is pronounced by the EO and annotated in the land register (art. 101 DEBA), preventing the debtor from validly disposing of the property without the EO's authorisation. If the debt is not paid within the statutory period, the creditor may require realisation of the seized property at public auction. The proceeds are distributed among the seizing creditors, after satisfaction of the mortgage creditors registered in the land register who have priority over unsecured seizing creditors.
A particular difficulty arises when the seized property is the debtor's family home or primary residence. PBM Avocats examines the protections available — deferral, repayment plan, opposition to realisation for procedural defects — and negotiates with creditors for alternatives to forced sale (refinancing, voluntary sale with redistribution of proceeds).
Protection of the Family Home and Family Law
The family home benefits from special protection under Swiss matrimonial law. Art. 169 SCC provides that one spouse may not, without the express consent of the other, terminate the lease, dispose of the family home or restrict its real rights, even if they are the sole owner. This protection also applies in forced execution proceedings: if the property is the family home, the non-owning spouse must be informed of the proceedings and may intervene to assert their rights. In ongoing divorce proceedings, interim measures may be requested to protect the family home against premature realisation.
PBM Avocats coordinates the real estate and family law dimensions of these sensitive situations, combining its expertise in real estate law, enforcement law and family law to provide its clients with a comprehensive and effective defence.
Frequently Asked Questions about Real Estate Seizure and Forced Sale
What is the difference between seizure and realisation of a real estate pledge?
Real estate seizure (arts. 89 et seq. DEBA) is a forced execution measure in the context of ordinary enforcement proceedings against a debtor: an unsecured creditor (without real security) may have real estate belonging to the debtor seized and sold at auction. Enforcement by way of realisation of a real estate pledge (arts. 151 et seq. DEBA), on the other hand, is the route reserved for mortgage creditors: a creditor whose claim is secured by a mortgage certificate or mortgage may require the auction sale of the encumbered property, without going through seizure. These two routes have distinct procedures, different timelines and different effects on the rights of third parties registered in the land register.
How does a property auction proceed under Swiss law?
The real estate auction is conducted by the competent enforcement office (EO) under arts. 97 et seq. (seizure) or 156 et seq. (pledge realisation) DEBA. The EO publishes the auction conditions (Lastenverzeichnis) which describe the charges encumbering the property, the reserve price (Steigerungsbedingungen) and payment arrangements. Interested parties may inspect the conditions and visit the property before the sale. The minimum price is generally set at the amount of charges to be taken over by the purchaser. The successful bidder pays the price immediately or within the deadline fixed by the conditions; failing this, a new sale is organised at the defaulting bidder's expense.
What rights does the debtor-owner have to protect the family home?
The family home benefits from special protection under Swiss law. Under art. 169 SCC, a spouse may not, without the express consent of the other, either dispose of the family home or restrict its real rights, even if they are the sole owner. This protection also applies in forced execution proceedings: art. 93 para. 1 DEBA provides that certain assets are non-attachable, though this protection is limited for real estate. The debtor may request from the court a payment deferral or protective measures. PBM Avocats examines the protective measures available in each situation and advises on options to avoid or delay forced realisation.
Can a mortgage creditor realise the pledge even if the debtor is not bankrupt?
Yes. Enforcement by way of realisation of a real estate pledge (arts. 151 et seq. DEBA) is an autonomous route that can be initiated as soon as the secured claim is due and unpaid, without waiting for bankruptcy proceedings. The mortgage creditor notifies the enforcement request to the EO, which notifies the debtor of a payment order. If the debtor does not file opposition (or if the opposition is lifted), the creditor may require the auction sale of the encumbered property. The procedure is distinct from bankruptcy and allows the mortgage creditor to be paid in priority from the sale proceeds, before unsecured creditors. The owner's bankruptcy may be opened concurrently if their debts exceed their assets.
What happens to tenants in the event of a forced sale of their building?
In the event of forced realisation, the successful bidder acquires the property with all charges registered against it (mortgages, easements) but also existing leases. Under art. 261 para. 1 CO (applicable by analogy via art. 30 of the Ordinance on Forced Realisation of Real Estate), existing leases are in principle transferred to the successful bidder. The successful bidder may however terminate the lease of the debtor-owner's primary residence with a six-month notice period. Bona fide tenants — who are not the pursued debtor — enjoy stronger protection: their lease is transferred to the successful bidder and can only be terminated under the ordinary rules of tenancy law.