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New project kicks off on the Vienna property market: DORDA advises on the first auction of historic appartment buildings

Monday, 10 June 2013

Two respected Viennese property brokers, Eugen Otto and Oliver Brichard, presented today, on 10 June 2013, a new project for the Viennese property market – the first auction of historic appartment buildings (Zinshäuser) in the city. As from autumn 2013, the auction concept will offer a transparent and secure public process for selling the capital’s historic apartment blocks. These auctions, which are voluntary, are aimed at private, commercial, institutional and public-sector property owners, as well as joint heirs, private foundations and vendors acting on behalf of third parties – in short, any party that requires an understandable, transparent means of selling their property. The auctions are carried out by property specialists Dr Eugen Otto and Oliver Brichard.

Stefan Artner, partner and head of the Real Estate Desk at DORDA (formerly Dorda Brugger Jordis), advised on the legal side of the project: "Voluntary auctions of this kind are an attractive alternative to the conventional mode of selling property. In contrast to a compulsory auction, which is ordered and effected by court, there is a notary enlisted in this case. After a bid has been accepted, the notary issues the official certificate required for the land register and distributes the monies from the highest bidder as specified in the auction conditions", explained Artner.

The legislative framework for this, Vienna’s first historic apartment-block auction, dates back to 2008, when the "Offer for Sale Amendment Act" withdrew voluntary auctions from the competence of the courts. Since then, attorneys, notaries and property brokers have been entitled to sell properties, as well as buildings erected on land owned by a third party, in private auctions. The property owner can define the conditions under which his property is auctioned and specify the reserve price. All interested parties that accept the auction conditions and pay the obligatory deposit at the beginning of the auction may participate. The auction is also announced in the court edicts database at least three weeks before it takes place, thereby ensuring the transparency that is required by law. "The new auction process meets EU requirements for an unconditional bidding process – and is therefore highly suitable for public-sector clients wishing to sell a property", commented Artner.

The auction conditions, which each bidder must sign prior to the auction, include the main information contained in a purchase agreement: a description of the property, the auction date and time, the reserve price, any deposit to be paid, details regarding payment of the highest bid and its distribution and use, the legal conditions for acquiring ownership and the consequences of non-compliance with the conditions by the highest bidder. At the end of the auction, the highest bid is accepted. The notary records the result in a notarial deed to which the auction conditions are attached. After the purchase price has been paid in full, the details of the new owner are entered in the land register based on the notarial deed and the auction conditions.

DORDA is a leading law firm in Austria and advises in all areas of business law. In addition to construction and real estate law the firm's core practice areas comprise M&A and restructuring, banking & finance, capital markets law, corporate law, tax law, competition, employment, private client and public law.

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