Enforcement in Austria

Enforcement in Austria

Enforcement, known as “Exekution” in Austria, refers to the enforcement of an established claim (to action, toleration or omission) of the entitled party against the debtor by state coercive power (as an execution title). As a rule, it concerns the realization of the plaintiff’s claim established in the successful court proceedings. In order for the positive judgment obtained against the defendant to be enforced, the execution proceedings serve to “forcibly” compel compliance with the judgment (the “title”) (hence also “Zwangsvollstreckung”, meaning enforcement).

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Enforcement Titles

For the purpose of execution, enforcement titles can include court judgments, decisions and rulings of administrative and financial authorities (typically payment obligations established by civil law decisions, but can also originate from an administrative authority or criminal courts), as well as certain notarial deeds and other titles enumerated in § 1 EO.

Foreign titles can be equated with Austrian ones, provided they were established abroad and are enforceable without a separate declaration of enforceability due to an international agreement or an act of the European Union (For more details, see Enforcement of Foreign Titles)

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Types of Enforcement

The EO (Execution Code) provides for various types of execution to collect the debt. These are briefly explained below:

Execution on movable property (execution against movable assets)

This type of execution refers to the execution on movable assets, which serves to collect outstanding monetary claims. Here, the enforcement is carried out by a bailiff through seizure and sale of the movable property.

However, the seizure of certain items is excluded:

An exception can be made if the value of the item that is generally exempt from seizure represents a high value compared to such an item in general (e.g. a fur winter coat compared to a common winter coat). In this case, the valuable item can achieve a comparatively high sales value for the required item (as a protected, non-seizable item) and may be exchanged. If the bailiff does not find any seizable items, the debtor must submit a list of assets.
There may be special constellations of rights to the items:

Execution on claims (execution against movable assets)

In this type of execution, the claim that the obligor has against a third party is taken over by the creditor, thereby settling the outstanding claim.

The most common type of claim execution is wage and salary execution. The execution court issues a payment prohibition to the employer. Accordingly, the employer may no longer pay the salary due (except for the subsistence level) to the employee, but exclusively to the creditor. The execution court issues a disposal prohibition against the employee. Accordingly, the employee may not dispose of his wage and salary claim against the employer.
If the financial circumstances of the obligor change (especially in the case of ongoing seizures such as salary claims), the court can adjust the (non-seizable exemption amount) at any time.

As a rule, the debt collection is carried out by means of a transfer. However, it is also possible

of the claim.
However, the seizure of claims for the following is excluded:

Execution on real estate

In real estate execution, the creditor has three different options to satisfy their monetary claim:

  1. Compulsory establishment of a lien

The claim is secured by registering a mortgage, a lien, or a building right for the creditor.

It should be noted that this does not provide immediate satisfaction for the creditor. However, he receives a security right. The creditor can only later obtain a forced administration – or auction through forced seizure – by applying to the court. If the creditor already possessed a (contractual) lien, the note of execution is immediately entered. Then that means:

2. Compulsory administration

The claim is secured through the ongoing use of the real estate and the profit generated thereby, which is used to cover the monetary claim.

For the forced administration, a person is appointed by the court. The forced administrator is responsible for ensuring that the income flows to the creditor instead of the debtor.

3. Compulsory auction

The claim is secured by auctioning the property. In the case of forced auction, immediate satisfaction occurs through the realization of the property, whereby the creditor receives the proceeds in money.

Execution for specific performance

Natural execution includes various types of execution, such as execution to effect actions (such as eviction execution), tolerations and omissions (such as to enforce claims for surrender or performance). Here, the owed action is enforced by exercising direct coercion, in certain natural executions by imposing coercive penalties.

Claims for surrender are to be enforced by the bailiff. If the item to be surrendered cannot be secured either from the obligor or from a third party, the creditor may file a claim for damages for non-performance.

If an object is to be evicted (e.g. apartment building), the execution title applies against all those who derive a right from the obligor (as well as family members). However, if another person possesses their right independently of the obligor (e.g. own lease), the effectiveness of the execution title does not apply to them.

If the item is in joint ownership with other persons, either a division of the item itself can take place, or, through realization, the respective claim can be paid out to the other (co-)owners.

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Competent Court

Here, a distinction is made between the court with subject-matter jurisdiction and the court with territorial jurisdiction.

Subject-matter Jurisdiction

The general district courts are always the competent courts of first instance for enforcement proceedings.

Local Jurisdiction

The local jurisdiction is generally based on the general place of jurisdiction of the obligor. In the case of natural persons, therefore, the habitual residence is used, in the case of legal entities, for example, the company headquarters. If the obligor does not have a general place of jurisdiction in Austria, that district court can be used in whose district the movable property on which the execution is to be carried out is located.

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Costs and Fees

The attorney’s fees in the execution proceedings are determined by the Lawyers’ Tariff Act (RATG). The court and enforcement costs are based on the Court Fees Act (GGG) and the Enforcement Fees Act (VGebG). As a basis of assessment, the amount of the (main) claim to be collected is generally used.

In the event of an award of costs, these attorney’s and court costs are added as a further (cost) claim to the ongoing execution proceedings and recovered by the bailiff.

In short: The creditor has to advance the costs of the execution proceedings. In the event of collectability, however, the court fees and costs of legal representation are ultimately borne by the debtor.

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Challenging an enforcement title

Since the creditor’s claim on the merits has already been established in the court proceedings, the obligor can no longer challenge the fundamental entitlement to enforce its content. That would rather be a question of legal remedies in the court proceedings (so-called recognition proceedings, in comparison to the subsequent execution proceedings).
However, one can proceed against the execution procedure as such (i.e., the manner or the distribution resulting from the enforcement).

  1. Appeal

The appeal can be used to take action against a specific measure in the execution proceedings. An appeal is a legal remedy to take action against a decision of the court.
In particular, against such over

can be challenged by means of an appeal.
Appeals are excluded for:

2. Objection

If you appeal against a judgment, no new facts may be presented as arguments in principle. This is based on the distinction between court proceedings and legal remedies. If it were possible to present further new facts even afterwards, a legal remedy would act like a second court proceeding. What is still prohibited in the appeal proceedings is permitted within the scope of the objection. In exceptional cases, new facts can be presented.

The objection serves in particular to challenge the distribution of proceeds or a defect in the compulsory auction.

By means of an objection, the creditor can also challenge the distribution of amounts, the amount, or the rank of the registered claims.

3. Presentation

If an enforcement decision was made by a registrar (instead of a judge) (usually in the case of pure monetary claims), the legal remedy of the presentation can be used to take action against it. Just like the appeal, a measure of enforcement is challenged. The matter in dispute is now being reviewed by a judge.

4. Complaint

If one wishes to challenge the manner of the enforcement act as an official act, a complaint can be filed with the execution court.
The complaint is distinguished into:

5. Objection

An objection can be filed informally by the obligor if:

It follows that the creditor must submit an improvement of the information or the title within a period of five days in order to be able to enforce effectively. Otherwise, the execution proceedings (including acts already executed) must be discontinued. The creditor may even be liable for damages if the obligor has suffered financial disadvantages as a result.

6. Temporary Suspension of Enforcement

In principle, no interruption of the execution proceedings can be achieved. The legal remedies (appeal, complaint, etc.) also do not stop the proceedings in their current state.
If a postponement is pronounced, the acts already executed in principle remain in effect. An exception to this principle arises if the obligor

In addition, however, further requirements must be met, which arise in particular from the challenge to the execution title itself (§42 EO). This means that action is taken not only against the procedure of enforcement, but also against the court judgment. The title, which first authorizes the enforcement authorities to carry out execution actions, is to be eliminated. In addition, the interests of the creditor must not be jeopardized. This results from the further requirement, a weighted distribution of interests and the provision of security, that the obligor’s application must not be hopeless.

If the creditor has already been satisfied in the meantime or a deferral has been agreed, the enforcement authority must also refrain from execution (“Innehaltung”). The same naturally applies to the reverse case of the obligor’s insolvency.

Questions regarding the action for partition

  1. My property has been handed over to a forced administrator. Will I never get it back now?

Yes. You will get your property back if all claims could be settled otherwise or if a dismissal order is issued by the court (e.g. if the execution title was declared invalid or you have concluded a different settlement).

2. I live on the property that is now being forcibly administered. Do I have to move out with my family?

No. During the period of forced administration, you and your family must be provided with a separate residential unit on the property. However, this only includes essential living spaces. If you have used additional premises, these must be made available to the forced administrator during this time.

3. My property is to be forcibly auctioned. What else can I do about it?

If the creditor’s claims are justified, he has the fundamental right to initiate a forced auction. Until the start of the auction, however, you can still try to reach an agreement with him. A different payment agreement can cause a postponement of the auction proceedings.
If you submit such an agreement with proof to the court in good time, the so-called postponement application will be approved without further requirements having to be met.
The forced auction proceedings can then only be resumed after a period of three months. If two years pass without an application for continuation, the execution shall be discontinued altogether by the court.