Bailiffs will take away the property of bona fide purchasers

Bailiffs might add to the workload of the Russia courts: the Service wishes to access the property of third parties, which was purchased from debtors. In order to receive permission to sequester such property, the courts need to rule void the transactions of transfer of the property to third parties. If a court rules the transaction fraudulent, the new owner of the property may lose it.

Arthur Parfenchikov, Head of the Federal Bailiff Service, told of the respective amendments to the Law “On execution proceedings”. It is about the situations, when the Service may impose charges on the property of third parties transferred to them from the debtors.

During a business brunch at the “Rossiyskaya Gazeta” newspaper, A.Parfenchikov informed: “Currently, the Federal Law “On execution proceedings” stipulates charging the debtor’s property at the disposal of third parties. Such charging is done upon a court order or a notary’s executory title… It is suggested to follow the analogy and apply the same procedure to the cases related to charging the debtor’s property, which he assigned to other persons under a deal with the purpose of evasion of the executory documents’ requirements”.

The FBS was unable to promptly answer the question how large was the percentage of exactly such cases in the executory proceedings. A.Parfenchikov mentioned that the algorithm of detection of fraudulent deals has already been developed.

It seems that the bailiffs decided to expand the “profile” list of the debtors and their property, or so a participant of the collectors’ market says in a conversation with BFM.ru. The interlocutor of BFM.ru also says that currently the problem of sale and transfer on property by the debtors to third parties is sufficiently acute, especially at the automobile market.

As is the case with the FBS initiative, it regards not only pledges but any property that the debtor attempts to conceal. The expert says that it primarily concerns the non-payers of alimonies.

He comments: “This category of persistent non-payers, who bend over backwards to show how poor they are and how they can only give 3 thousand roubles to their child and how they have no property at all, is very large. Concerning the automobile credits with over 2 years of delay – practically a half of all such cars is already sold to someone. Many banks retain the passport of the car as surety, but people keep finding the ways to swindle the bank by bribing the State Automobile Inspection or reporting the loss of the passport to the Inspection, after which a duplicate passport is issued. Pursuant to the law, if the bank conducts some proceedings against the debtor, and the car is pledged, but is already sold, then the car is simply taken away from the person, who is a bona fide purchaser”.

Distinctive traits of a fraudulent deal

The representatives of the FBS point out that it befalls to the court to determine, whether a deal is fraudulent or not (and hence to decide the fate of the property already held by a new owner).

Alexander Shugaev, Lawyer of the Law Firm "YUST", explains that a deal is considered fraudulent if it “either conceals another deal or aimed at liability evasion”.

Thus, the court will have to ascertain that both parties to a transaction were aware of the consequences. As the members of the collectors’ market point out to BFM.ru, the value of the transaction – several times below the market value – may be a warning that the deal is fraudulent.

But A.Shugaev mentions that nobody has yet revoked the liberty of contract in Russia: “One cannot say that it is impossible to sell a Porsche Cayenne for 150 thousand roubles, if the parties have agreed on conditions. But the low price may be a certain signal indicating the deal’s suspicious nature”, - says the expert to BFM.ru.

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