(republished from mononews.gr)
Interest in participating in compulsory property auctions is steadily increasing, and the initial moral hesitation of potential bidders is gradually fading over the years. According to a recent study presented by Landea, the main deterrent for prospective bidders is not the moral stigma associated with evicting the previous owner but rather the lack of visibility into the property's interior and the fear of legal complications.
The truth is, as often noted, that upon the adjudication of the property and payment of the auction price by the successful bidder, any liens, mortgages, and seizures on the property are extinguished—thus, the asset is transferred "clean" to the buyer. However, other risks remain that could potentially entangle the highest bidder in lengthy legal disputes:
- Auction annulment risk even after adjudication: Even after the auction concludes and the auction price is paid, the auction may be annulled. This could result in the loss of ownership and force the buyer into a protracted legal battle to recover the amount paid. There are numerous potential defects in the auction process, and volumes of legal literature have been devoted to analyzing them in depth.
- Legal actions by the debtor regardless of merit: Even when no procedural flaws exist, the debtor may still file a claim to annul the auction—either to pressure the buyer or simply to engage in litigation, however slim the chances of success. This means that even in a perfectly valid auction, the buyer could still end up in court. The costs of such a dispute are unlikely to be recovered from the losing party, who is often insolvent.
- Litigation through no fault of the buyer: A notable example is the recent Decision No. 4004/2025 by the Athens Court of Appeal. In that case, the highest bidder purchased a property and invested further in renovations. The initial court annulled the auction because the Servicer had unjustifiably refused a settlement just days prior. The buyer had no way of knowing this, as the only information available was the E-auction listing. Fortunately, the Court of Appeal overturned the decision, upholding the auction's validity. Still, the buyer endured a four-year legal ordeal, incurring high legal costs and stress.
- The strange irony: debtors losing properties due to others' mistakes: For example, Decision No. 697/2025 by the Athens First Instance Court annulled an auction because the Servicer had failed to properly notify one of the mortgage lenders. Similarly, Decision No. 1515/2024 by the Corfu First Instance Court involved the same issue, while Decision No. 481/2025 annulled an auction due to defects in the enforceable title.
Recent Legislative Changes
Just a few weeks ago, further amendments to the Code of Civil Procedure and the compulsory auction process were enacted (Law 5221/2025). One major reform is the forthcoming launch of a platform to fast-track the adjudication of such annulment actions. This means disputes over properties will likely be resolved within a few months. Even if the former owner files a clearly unfounded annulment claim, litigation is expected to conclude within one to two years.
Additionally, the same law narrows the types of procedural flaws that can lead to annulment—essentially fortifying the auction process.
Conclusion
Participating in a property auction can bring significant benefits to the new owner but is not without its risks. In some cases, the buyer is not just purchasing real estate—they're also buying into a legal battle. As a legal journal aptly put it back in 1911:
"Poor successful bidder! He paid the auction price, took possession, and four years later, with the auction annulled, returned the property and is now fighting the creditor of the debtor... What cursed fate led him to the auction, and instead of buying real estate, he bought a lawsuit!"
Although comprehensive statistics on auction annulments are unavailable—since each enforcing creditor maintains their own records—available information indicates that annulment rates are extremely low. Given the latest reforms to the Code of Civil Procedure, the landscape is expected to become even more favorable for prospective buyers.
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