On 31 October 2013, in the article “Beslag op de koopsom van een woning” (“Garnishment of the purchase price of a dwelling”), we already discussed a judgement of the Supreme Court of 12 July 2013, in which the Court ruled that garnishment levied on the purchase price against the buyer is not subject to the protection of the priority notice (“Vormerkung“).
The Vormerkung means that, in the six months after a purchase agreement regarding the purchase of immovable property is recorded in the land register, any mortgages or attachments registered in respect of the relevant immovable property cannot be enforced against the buyer. This means that, in such case, the registered property can be transferred to the buyer free from the relevant mortgages and/or attachments. In practice, creditors tried to circumvent the Vormerkung by having garnishment levied on the purchase price against the buyer, as a result of which the immovable property could not be transferred to the buyer. After all, it meant that the buyer was unable to pay the purchase price, as garnishment had been levied on that. Without payment, there can be no transfer. According to the judgement of the Supreme Court, garnishment levied on the purchase price against the seller was not subject to the protection of the Vormerkung. This meant that the garnishment against the buyer had the desired effect, and the creditors achieved what they wanted to achieve.
However, this changed on 1 January of this year, when a legislative change came into effect that means that, if garnishment is levied on the purchase price against the buyer after the purchase is recorded in the land register, the buyer can pay the purchase price to the civil-law notary, despite the garnishment levied on it, so that the transfer can go through.
In addition, from that moment onwards, attachments levied on the immovable property after the purchase is recorded in the land register will only be levied on the portion of the purchase price the civil-law notary holds for the benefit of the seller. It means creditors will be more likely to opt for levying garnishment on the immovable property again.
However, the legislative change means the buyer is much better protected.
If you have a question about this subject, you can contact our office, +31 10 209 2777 or by e-mail info@lvh-advocaten.nl
