Execution on Asset Rights
Execution on Asset Rights
The Enforcement Code (EO) provides several means to forcibly enforce outstanding monetary claims. In addition to the well-known forms of execution on movable property and execution on claims, there is also execution on (other) asset rights. Precisely because this form of execution is less known, a closer look at its prerequisites, procedure, and practical applications is worthwhile.
Execution on asset rights has been comprehensively re-regulated since the comprehensive reform of enforcement law, which came into force on July 1, 2021, and is codified in Sections 326 et seq. of the Enforcement Code (EO).
Parties to the Execution on Asset Rights
In the execution of property rights, there are two main parties: The pursuing creditor, who wants to enforce a monetary claim, and the obligated debtor, whose property rights are used.
Rights Under Consideration
Execution on asset rights covers all rights with monetary value that are not already covered by other types of execution, such as execution on movable property, claims, or real estate. Thus, this form of execution serves as a catch-all provision for rights that would otherwise fall through the cracks of traditional enforcement measures.
Executable Asset Rights
Execution is carried out on the following asset rights, among others:
- Co-ownership shares in real estate
- Rights arising from virtual currencies
- Rights to repeated receipt of proceeds (e.g., lease or harvest yields)
- Rights of use for movable or immovable property
- Hunting and fishing rights
- Company shares
Non-attachable Asset Rights
Not every asset right can be forcibly realized. The legislator protects certain legal positions to safeguard the personal and social interests of the parties.
Certain rights are expressly considered non-attachable:
- The right to divide marital or partnership property and savings, provided that no division proceedings have yet been initiated or an agreement has been reached on this.
- Highly personal or otherwise non-transferable rights (e.g., right to marry, to membership in certain corporations, etc.)
- Benefits in kind from social insurance (e.g., medical aids, medications)
- Businesses with an inseparable personal character (e.g., small businesses operated solely by the entrepreneur)
Peter HarlanderHarlander & Partner Rechtsanwälte „The execution on property rights begins where classic seizure measures reach their limits and therefore requires particularly sensitive legal expertise.“
Execution Order
First, the enforcing party must file an application for execution, specifically stating the request for enforcement therein. Only then will the court act and examine whether the legal requirements for the approval of execution on asset rights are met.
If execution on asset rights takes place, the court generally has to appoint an administrator. This administrator is tasked with immediately identifying all attachable asset rights, preferably with the cooperation of the obligated party.
Execution Without Administrator Appointment
Under certain conditions, the court may refrain from appointing an administrator. For this, an application from the enforcing party must be submitted, in which they precisely specify the affected asset right and immediately request its realization. If these conditions are met, the enforcement court does not have to appoint an administrator. The enforcing party is authorized to assert and enforce the right themselves and can sue for it or make other declarations necessary for its realization.
Mandatory Administrator Appointment
The law mandatorily prescribes the appointment of an administrator for certain asset rights:
- Leasing of a business
- Sale, lease, or rental of real estate
- Sale of a company share
- Termination of a partnership agreement
Since these cases require expert administration and valuation of the rights, the appointment of an administrator is mandatory.
Sebastian RiedlmairHarlander & Partner Attorneys „Effective enforcement does not mean blind access, but rather a planned approach within the legal limits.“
Attachment of Asset Rights
With the approval of the execution, the court issues a prohibition of disposal to the obligated party, so that they may no longer dispose of the affected asset rights. Upon delivery of the prohibition, the right is considered attached. If the asset right concerns registered rights, such as a share in real estate, the attachment is carried out by entry in the public book or register.
Realization of Asset Rights
The administrator converts the attached rights into money. The law provides for various options for this:
- Sale
- Auction
- Compulsory Administration
- Leasing or rental
The type of asset right and the court’s approval determine which method of realization the court permits.
Execution on Company Shares
Company shares can also be attached. In the case of partnerships and cooperatives, the administrator may terminate the company to realize the share.
Stricter rules apply to corporations. If the share in a corporation is only transferable with the consent of the company, all parties involved (debtor, company, creditor, possibly co-shareholders) are informed about the estimated value and the planned realization. If there is a right of first refusal in the articles of association, a co-shareholder can take over the share himself within two months. This is to prevent strangers from becoming shareholders unintentionally.
Execution on Businesses
The court does not approve the attachment of a business if it is inseparably linked to the personal labor of the entrepreneur. This is the case, for example, with a sole proprietorship. Administration or leasing proves to be practically impossible.
In the attachment of a business, the administrator realizes it exclusively through compulsory administration or leasing, as a sale or forced auction is not permitted. During the period of execution, the compulsory administrator takes over the management of the business and ensures that all necessary actions for ongoing operations are taken. Furthermore, the court publicly announces their appointment and subsequently registers it in the commercial register.
Your Benefits with Legal Assistance
An experienced lawyer carefully examines which asset rights can be attached and at the same time ensures that the enforcement is carried out legally sound and effectively. Furthermore, they safeguard your interests against debtors and third parties, so that losses are avoided and claims are fully enforced.
Through a specialized law firm, unnecessary costs and delays can be avoided, allowing you to gain clarity, security, and a realistic assessment of your chances of success.
- Support in enforcing your claims
- Safeguarding your rights and interests vis-à-vis all parties involved
- Support throughout the entire procedure
