OGH: Prohibition of sale prevents joining foreclosure proceedings
The Austrian Supreme Court (Oberster Gerichtshof, OGH) clarified that a prohibition of encumbrance and sale also prevents joining an existing forced foreclosure procedure.
In the case at hand, the obligated party and his wife each owned half of a property. With regard to the one half share of the obligated party, a prohibition of encumbrance and sale in favour of his wife was recorded in the land register. With regard to the property, foreclosure proceedings were already pending by another creditor who had obtained a (joint) title against both co-owners.
The creditor in the current proceedings had a title only against the obligated party (husband) and applied for the foreclosure of his share of the property by joining the pending foreclosure proceedings.
The Court of Appeal did not grant the application, as a recorded prohibition of encumbrance and sale prevented the granting of the forced sale. This also applied in the case of joining an already pending forced foreclosure procedure.
The OGH agreed with this view. Pursuant to Section 139 para 1 of the Enforcement Order (Exekutionsordnung, EO), once the initiation of the foreclosure proceedings has been noted, no special foreclosure proceedings may be initiated in favour of further claims as long as these proceedings are ongoing. All further creditors join to these proceedings pursuant to Sec. 139 para 2 EO. A "joining" is thus nothing other than the granting of the forced sale, for which the conditions for enforcement had to be fulfilled. A prohibition of encumbrance and sale stood in the way of this.
Also, the purpose of the prohibition of encumbrance and sale had not ceased to exist only because of the pendency of forced foreclosure proceedings. Since the foreclosure of the property shares was not inevitable, the spouse still had an interest worth protecting. Nor had the prohibition of encumbrance and sale become ineffective against the creditors because the spouse could no longer rely on the prohibition of encumbrance and sale due to joint liability.
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