Partition auction: process, costs and your rights

What is a partition auction?

If a house belongs to several people jointly, each of them can in principle demand dissolution of the community at any time (Sec. 749 (1) BGB). A division in kind (Sec. 752 BGB) practically always fails with a house. The plot of land is then sold by forced auction and the proceeds are divided (Sec. 753 (1) BGB). The proceedings are governed by the Act on Forced Auctions (Zwangsversteigerungsgesetz, ZVG), supplemented by the special rules of Sec. 181 to 185 ZVG (Sec. 180 (1) ZVG).

Two communities come up above all:

• Co-ownership in fractional shares (Bruchteilsgemeinschaft): married couples, civil partners or siblings who are each entered in the land register with a share, for example half each (Sec. 1008 BGB).
• Community of heirs: several heirs to whom the estate belongs jointly (Sec. 2032 (1) BGB). Each co-heir can demand the division of the estate (Auseinandersetzung) at any time (Sec. 2042 (1) BGB); via Sec. 2042 (2) BGB, Sec. 753 BGB also applies to the plot of land. More on this in the guide Community of heirs.

Feature	Partition auction	Forced auction because of a claim
Purpose	End the community in the plot of land	Satisfy creditors
Who applies	Co-owner, co-heir or whoever exercises their right to dissolution	Creditor with a claim
Enforceable title required	no (Sec. 181 (1) ZVG)	yes
Payment problems a requirement	no	usually yes
Special right of termination of the successful bidder towards tenants	no (Sec. 183 ZVG)	under the conditions of Sec. 57a ZVG
Result	Money instead of property, divided among the co-owners	Creditor is satisfied from the proceeds

Who can apply for a partition auction?

The court orders the auction if the applicant is entered in the land register as owner, is the heir of a registered owner or exercises their right to dissolution (Sec. 181 (2) sentence 1 ZVG). These are above all:

• Co-owners, even with a small share. A majority is not required.
• Co-heirs, even if the land register is still in the name of the deceased. The succession must be substantiated by documents (Sec. 181 (4), Sec. 17 (3) ZVG), usually with the certificate of inheritance (Erbschein) or an opened notarial will.
• Creditors who have attached a share. They can demand dissolution even if the co-owners have excluded it by contract, provided their title is not only provisionally enforceable (Sec. 751 sentence 2 BGB).

For a co-owner under guardianship or legal custodianship, the application requires the approval of the family court or guardianship court (Familien- oder Betreuungsgericht) (Sec. 181 (2) sentence 2 ZVG).

Jurisdiction lies with the local court as enforcement court (Vollstreckungsgericht) in whose district the plot of land is located; the federal states can concentrate auction matters at individual local courts (Sec. 1 ZVG). You prove the entry with a certificate from the land registry (Grundbuchamt) (Sec. 17 (2) ZVG). The law does not require a lawyer for the application (Sec. 78 (1), Sec. 79 (1) ZPO).

When is a partition auction not possible?

You should know these obstacles before you file an application or defend yourself against one:

• Exclusion by will: The testator can exclude the division for the estate or for individual items or make it subject to a notice period; as a rule, this ends 30 years after the death (Erbfall) (Sec. 2044 BGB). Anyone who wants to keep a house in the family can provide for this in their will.
• Exclusion by agreement: Co-owners can exclude dissolution; for good cause it nevertheless remains possible (Sec. 749 (2) BGB). Against a later acquirer of a share, this only has effect if it is entered in the land register (Sec. 1010 (1) BGB).
• Undetermined shares in the estate: As long as, for example, the birth of a co-heir is expected, division is excluded (Sec. 2043 BGB).
• Spouses in a community of accrued gains (Zugewinngemeinschaft): If the share in the house essentially makes up the entire assets of one spouse, their application may require the consent of the other under Sec. 1365 BGB.
• Abuse of rights: Only in narrow exceptional cases can an application be inadmissible under the principle of good faith (Treu und Glauben).

The court must take an exclusion that is apparent from the land register into account of its own motion and cancel or temporarily suspend the proceedings (Sec. 28 (1) ZVG). If it is not entered there, you usually have to assert it yourself by bringing an action.

The partition auction process in 8 steps

The court sets the pace; the parties can intervene at several points.

Step	What happens	Deadline	Basis
1. Application	Application to the enforcement court with proof from the land register and, where applicable, proof of inheritance	none	Sec. 1, 15, 17, 181 ZVG
2. Order	The court orders the auction and asks the land registry to enter the auction note (Versteigerungsvermerk); attachment (Beschlagnahme) upon service	none	Sec. 19, 22 ZVG
3. Suspension application by the others	Application for temporary suspension for up to six months	non-extendable deadline of 2 weeks from service of the notice	Sec. 180 (2), Sec. 30b ZVG
4. Market value	The court sets the value, if necessary after a valuation report; immediate complaint (sofortige Beschwerde) possible	complaint within a non-extendable deadline of 2 weeks from service (Sec. 569 (1) ZPO)	Sec. 74a (5) ZVG
5. Setting the date	Publication with the market value; the valuation report may be published online	at least 6 weeks before the date, service on the parties 4 weeks before	Sec. 38, 39, 43 ZVG
6. Auction date	Announcement of the conditions, lowest bid (geringstes Gebot), bidding period	bidding period at least 30 minutes	Sec. 66, 73 ZVG
7. Acceptance or refusal of the bid	Acceptance of the bid in favour of the highest bidder or refusal below 5/10 or 7/10	new date usually after 3 to 6 months	Sec. 74a, 81, 85a ZVG
8. Distribution hearing	Distribution plan (Teilungsplan), payment of the cash bid (Bargebot), payout or official deposit	cash bid before the distribution hearing	Sec. 49, 105, 113, 117 ZVG

On the market value: It is the basis of calculation for the minimum bid, the security and the court fees. If you consider it wrong, you must challenge the decision setting it with an immediate complaint. You can no longer challenge the acceptance of the bid later on the grounds of an incorrect value (Sec. 74a (5) sentences 3 and 4 ZVG).

At the auction date: The court reads out the value, the lowest bid and the auction conditions (Sec. 66 (1) ZVG). Bidding lasts at least 30 minutes and continues until no more bids are made despite a request (Sec. 73 (1) ZVG).

Minimum bid: lowest bid, 5/10 and 7/10 limits

There are three different lower limits that are often confused.

1. The lowest bid. Only a bid that covers the prior-ranking rights and the costs of the proceedings is admitted (Sec. 44 (1) ZVG). In a partition auction, this includes all rights that encumber or co-encumber the applicant's share, and all rights that rank ahead of or equally with these (Sec. 182 (1) ZVG). A land charge (Grundschuld) on the entire plot therefore falls within the lowest bid and remains in place (Sec. 52 (1) ZVG). The successful bidder (Ersteher) takes it over in addition to their cash bid. If the shares are encumbered differently, a balancing amount is added (Sec. 182 (2) ZVG).

2. The 5/10 limit. If the highest bid, including the capital value of the rights that remain in place, does not reach half of the market value, the court refuses acceptance of the bid of its own motion (Sec. 85a (1) ZVG).

3. The 7/10 limit. If the highest bid including the rights that remain in place is below seven tenths of the market value, an entitled person whose claim is not covered as a result can apply for refusal (Sec. 74a (1) ZVG). You must file the application by the close of the hearing on acceptance of the bid (Sec. 74a (2) ZVG). Whether and when a co-owner in a partition auction is an "entitled person" in this sense depends on the individual case.

If acceptance of the bid is refused for one of these two reasons, the court sets a new date, usually no earlier than three and no later than six months later. At the new date, neither the 5/10 nor the 7/10 limit applies (Sec. 74a (3) and (4), Sec. 85a (2) ZVG). The house can then go for well below its value.

Worked example. The court sets the market value at €300,000. The plot is encumbered with a land charge of €100,000, which remains in place under the auction conditions.

Limit	Highest bid including rights that remain in place, at least	of which land charge (remains in place)	Cash bid required
5/10 (Sec. 85a ZVG)	€150,000	€100,000	€50,000
7/10 (Sec. 74a ZVG)	€210,000	€100,000	€110,000
new date after refusal	no value limit, only the lowest bid	€100,000	at least the part of the lowest bid payable in cash

The land charge is included at its nominal amount. For the co-owners, this means: after deduction of the costs, little may be left of the cash bid for distribution, while their personal loan debt to the bank may continue.

How long does a partition auction take?

The law does not prescribe a fixed duration. But it sets deadlines that result in a minimum duration:

Stage	Statutory deadline
Suspension application after service	2-week non-extendable deadline (Sec. 30b (1) ZVG)
Temporary suspension	up to 6 months, can be repeated once (Sec. 180 (2) ZVG)
Suspension to protect a joint child	can be repeated several times (Sec. 180 (3) ZVG)
All suspensions together	at most 5 years (Sec. 180 (4) ZVG)
From setting the date to the auction date	should not be more than 6 months (Sec. 36 (2) ZVG)
Publication before the date	at least 6 weeks (Sec. 43 (1) ZVG)
New date after refusal	usually 3 to 6 months (Sec. 74a (3) ZVG)

On top of this come the valuation report, complaints and the distribution of the proceeds. In practice, more than a year often passes from the application to the money in your account. If there is a dispute over the distribution of the proceeds, it can take considerably longer.

What does a partition auction cost?

The fees for the proceedings and the auction date are based on the market value as set by the court; those for acceptance of the bid and distribution are based on the highest bid including the rights that remain in place (Sec. 54 (1) to (3) GKG). We have recalculated them using the schedule of costs (Kostenverzeichnis, KV) and the fee table of the GKG, assuming that a third party is awarded the property at the market value and no rights remain in place.

Fee (KV GKG)	Rate	Market value €200,000	€300,000	€500,000
Decision on the application (2210)	€120 fixed	€120.00	€120.00	€120.00
Proceedings in general (2211)	0.5	€1,019.00	€1,439.00	€2,069.00
Auction date (2213)	0.5	€1,019.00	€1,439.00	€2,069.00
Distribution proceedings (2215)	0.5	€1,019.00	€1,439.00	€2,069.00
Total for the proceedings		€3,177.00	€4,437.00	€6,327.00
Acceptance of the bid (2214), paid by the successful bidder	0.5	€1,019.00	€1,439.00	€2,069.00

• Fee 2210 is charged separately for each applicant and each joinder; if several co-owners apply together, they count as one (preliminary note 2.2 KV GKG).
• If the proceedings end before the first date is set, the fee for the proceedings drops to 0.25 (KV 2212). The fee for the auction date does not apply if acceptance of the bid is refused under Sec. 74a or Sec. 85a ZVG (KV 2213).
• If a co-owner acquires the property at auction, the fee for acceptance of the bid is calculated on the value less their share (Sec. 54 (2) sentence 2 GKG): with €300,000 and a half share, €809.00 instead of €1,439.00.

Expenses come on top: the valuation report, invoiced under the JVEG (KV 9005), publications (KV 9004) and service at €3.50 per service, only from the eleventh service (KV 9002). The cost of the valuation report depends on the work involved.

Who pays? The costs of the proceedings are taken from the proceeds in advance, except for the costs of the order, joinder and acceptance of the bid (Sec. 109 (1) ZVG). Economically, they are therefore borne by all co-owners. The €120 for the order is borne by the applicant, the fee for acceptance of the bid by the successful bidder (Sec. 109 (1) ZVG, Sec. 26 (1) and (2) GKG). If there are no proceeds, the applicant owes the costs (Sec. 26 (1) GKG).

Lawyer's fees: Unless otherwise agreed, fees of 0.4 each under the RVG apply in the proceedings for the proceedings, the auction date and, separately, the distribution proceedings (nos. 3311, 3312 VV RVG). For co-owners, the value of the matter (Gegenstandswert) is their share (Sec. 26 no. 2 RVG). For a half share in €300,000, a 0.4 fee comes to €821.40 net.

Real estate transfer tax (Grunderwerbsteuer): The highest bid itself is already taxable (Sec. 1 (1) no. 4 GrEStG). There are exemptions, among others, for co-heirs dividing the estate, for former spouses dividing their assets after divorce and for relatives in a direct line (Sec. 3 nos. 3 to 6 GrEStG).

Preventing or stopping a partition auction: what you can do

An objection alone does not stop the proceedings. But the law gives co-owners several tools.

Temporary suspension (Sec. 180 (2) ZVG). On application, the court suspends the proceedings for at most six months if this appears appropriate after weighing the interests of all co-owners; this can be repeated once. The two-week non-extendable deadline begins with service of the order that informs you of this right (Sec. 30b (1) ZVG).

Protection of joint children (Sec. 180 (3) ZVG). If the community consists only of the applicant and their (former) spouse or civil partner, the court must suspend the proceedings on application if this is necessary to avert a serious risk to the welfare of a joint child, even several times. All suspensions together may not exceed five years (Sec. 180 (4) ZVG).

Protection against enforcement (Sec. 765a ZPO). In exceptional cases, the court helps if, because of very special circumstances, the auction means hardship that is incompatible with public morals.

What the applicant controls. They can consent to a suspension; if this has already happened twice, a third consent counts as a withdrawal (Sec. 30 (1) ZVG). If, after a suspension, they do not apply for continuation within six months, the proceedings are cancelled (Sec. 31 (1) ZVG), as they are on withdrawal (Sec. 29 ZVG). This is the route if you do reach an agreement after all.

The other side joining the proceedings. Any other co-owner can join with their own application and then has the same rights as the applicant (Sec. 27 ZVG). A withdrawal by the first applicant then no longer ends the proceedings. Anyone who files the application only as a means of pressure should bear this in mind.

Other routes: asserting an exclusion of division (see above), bidding yourself or selling your share in the estate (see alternatives).

Bidding yourself: security and financing

Co-owners and co-heirs may bid like any other interested party. You need to know a few rules:

• Security (Sicherheitsleistung): A party can demand immediately after your bid that you provide security (Sec. 67 (1) ZVG). The security is in principle one tenth of the market value (Sec. 68 (1) ZVG), so €30,000 for €300,000; under the conditions of Sec. 68 (2) and (3) ZVG, more can be demanded.
• No cash: Paying in cash is excluded. Permitted are a Bundesbank cheque or a crossed bank cheque (Verrechnungsscheck) issued no earlier than the third working day before the date, an unlimited, unconditional bank guarantee as primary obligor (selbstschuldnerische Bürgschaft) (not for bids by the debtor), or a transfer that is credited to the court cashier's office (Gerichtskasse) before the date and proven at the date (Sec. 69 ZVG).
• Exception for holders of charges on land: A co-owner does not have to provide security if they are entitled to a mortgage or land charge that is wholly or partly covered by the bid (Sec. 184 ZVG).
• Payment: You must transfer the cash bid to the account of the court cashier's office before the distribution hearing; from the acceptance of the bid it bears interest (Sec. 49 (2) and (3) ZVG). So clarify the financing before the date.
• Rights that remain in place: Land charges, a right of residence or a usufruct that remain in place are taken over by you in addition to the cash bid.

After acceptance of the bid: ownership, tenants, moving out and proceeds

Ownership: With the acceptance of the bid, the successful bidder becomes the owner (Sec. 90 (1) ZVG). Rights that do not remain in place are extinguished (Sec. 91 (1) ZVG).

Right of residence and usufruct: Whether a right of residence (Wohnrecht) or a usufruct (Nießbrauch) remains depends on its rank and the auction conditions. If it is extinguished, it is replaced by a claim to compensation for its value from the proceeds, for a usufruct as an annuity in the amount of the annual value (Sec. 92 ZVG).

Tenants: The successful bidder takes over the tenancy agreement (Sec. 57 ZVG, Sec. 566 BGB). The special right of termination from an ordinary forced auction does not exist here (Sec. 183 ZVG); the normal termination rules of tenancy law apply.

A co-owner moving out: The order accepting the bid is an enforceable title for eviction and surrender against a previous co-owner who lives in the house (Sec. 93 (1) ZVG). The successful bidder does not need to bring a new action for this.

Proceeds: At the distribution hearing (Sec. 105 ZVG), the costs of the proceedings are taken first, then the rights to be satisfied in cash are paid (Sec. 109 ZVG). The rest belongs to the previous co-owners. How it is to be divided among them is not decided by the court. If you do not reach an agreement, the amount is placed in official deposit (Hinterlegung) (Sec. 117 (2) sentence 3 ZVG).

In a community of heirs, the proceeds belong to the estate (Sec. 2041 BGB), and the community continues in the money. After settlement of the estate liabilities, it is distributed according to the inheritance shares (Sec. 2047 (1) BGB); equalisation obligations or outstanding compulsory share claims can change the calculation.

Partition auction in a community of heirs and on divorce

Feature	Community of heirs	Spouses after separation or divorce
Community	joint ownership of the estate as a whole (Gesamthand) (Sec. 2032 BGB)	usually co-ownership in fractional shares, e.g. 1/2 each (Sec. 1008 BGB)
Claim to dissolution	Sec. 2042 (1) BGB	Sec. 749 (1) BGB
Typical obstacles	exclusion of division in the will (Sec. 2044 BGB), undetermined shares in the estate (Sec. 2043 BGB)	agreement (Sec. 749 (2) BGB), consent under Sec. 1365 BGB
Special protection	general suspension (Sec. 180 (2) ZVG)	in addition, suspension to protect joint children (Sec. 180 (3) ZVG)
Proceeds	belong to the estate, distributed according to inheritance shares (Sec. 2041, 2047 BGB)	belong to the ex-partners according to their shares, equalisation claims separately
What the auction does not resolve	equalisation among heirs (Ausgleichung), estate liabilities, compulsory share	equalisation of accrued gains, loans, compensation for use
Alternative without the consent of the others	sell your share in the estate (Sec. 2033 BGB)	sell your share (Sec. 747 sentence 1 BGB)

Who belongs to the community of heirs and with what share follows from the will or from intestate succession (gesetzliche Erbfolge). You can find more on all inheritance topics in the inheritance law guide.

Advantages and disadvantages of a partition auction

Advantages	Disadvantages
Ends a deadlocked community even without an agreement	Proceeds depend on the bids, and at the new date after a refusal there is no value limit
No title and no consent of the others required	Court fees and the valuation report reduce the proceeds
Procedure regulated by law and held in public, with the market value set by the court	Interested parties have no right to view the property
Co-owners can bid themselves	The community of heirs continues in the proceeds, the dispute over distribution remains
Pressure on all parties to reach an agreement	Often takes more than a year, eviction title against occupants

A partition auction has failed, for example, if no admissible bid is made at the date, if acceptance of the bid is refused or if the applicant withdraws. If an auction produces no result, each co-owner can demand that it be repeated; if this also fails, they bear the costs (Sec. 753 (2) BGB).

Alternatives to a partition auction

Because the auction costs money and time, it is worth comparing it with these routes:

• Takeover by one co-owner: One of you takes over the property and pays out the others. This requires an agreement on the value and financing. For heirs, this happens as part of the division of the estate; the part concerning the plot of land requires a notary (Sec. 311b (1) sentence 1 BGB). If you take it over yourself, you can have the purchase agreement checked from the buyer's perspective before the notary appointment (€259 fixed price, review report within 24 hours).
• Joint sale on the market: You all sell together to a third party. You decide the price, buyer and timing yourselves, and viewings are possible.
• Selling a share in the estate: Every co-heir can dispose of their share in the estate; the contract must be notarised (Sec. 2033 (1) BGB). They cannot dispose of their share in individual items of the estate, for example only in the house (Sec. 2033 (2) BGB). If they sell to a third party, the other co-heirs have a right of first refusal (Vorkaufsrecht), which they can exercise within two months (Sec. 2034 BGB).
• Partition agreement (Auseinandersetzungsvertrag): The heirs reach an agreement on the entire estate, not just the house. This prevents the dispute from continuing over the proceeds after the auction.
• Arrangement on use: If you still want to keep the property, an arrangement on administration and use, if necessary by majority decision, can buy time (Sec. 745 BGB, for heirs Sec. 2038 (2) BGB).

Checklist before the application

• Who is entered in the land register, and with what share? Has the succession been proven?
• Is there a will or an agreement that excludes division?
• Which land charges, rights of residence or usufructs are entered, and which would remain in place?
• How high is the realistic market value, and what would a sale on the open market bring?
• Do you want to bid yourself? Is the financing in place, and can you provide 10% security?
• Does anyone live in the house, a co-owner or a tenant?
• Are you spouses in a community of accrued gains, or do you have joint children?
• Which claims remain open after the auction (loans, equalisation, compulsory share)?
• Are you prepared to advance the costs if the proceedings fail?