Security deposit at a judicial auction: savings certificate, lodging and return

The current sequence follows from section 180(1) EO. Before granting the award, the court calls on the highest bidder to lodge the Vadium. The statute therefore does not require every bidder to pay security in advance.

Security must nevertheless be fully prepared before the hearing. If the highest bidder does not lodge it immediately, the auction continues from the preceding bid. The court must also impose an administrative fine of up to EUR 10,000 on the defaulting highest bidder.

This narrow point in time differs from later payment of the highest bid. The article on the highest bid after the award covers the payment period, interest and consequences of default. This article deals only with security immediately before the award.

Section 179(1) EO fixes the Vadium at 10 percent of the appraised value. A minimum amount of EUR 1,000 applies in every case. The relevant figure is therefore the court valuation, not the minimum bid, the personal bidding limit or a private purchase price estimate.

Compare the amount directly with the valuation, auction edict and current auction conditions. The bid budget planner assists with private budget preparation, but it does not calculate the court security and does not validate a particular savings certificate.

If the property scope or the court material changes, do not rely on an older calculation. A person monitoring several auctions should document the amount and certificate separately for each court file number.

Section 179(1) EO expressly states that only savings certificates may serve as security. A financing commitment, bank statement, cash or a mere willingness to make a bank transfer does not replace the statutory form.

A password protected savings certificate is suitable. The same applies to a certificate issued in the name of a customer identified under section 40(1) BWG. The statute permits the court to dispose of it without the password being supplied.

For a named savings certificate, the auction record or an order containing the relevant details of the buyer under section 194(1)(3) EO must also be presented. These documents should not be sought only after the hearing. The bank, certificate and court file must be coordinated.

The request under section 180 EO is made to the highest bidder immediately before the award. The original certificate, identity documents and any authority to act must therefore be available at the hearing. Planning to provide them later is unsafe.

If another person acts for the bidder, the security deposit and authority are separate review points. The article on bidding authority before the auction hearing helps organise identity, the scope of authority and the bidding limit. It does not replace the review of the Vadium.

The auction edict and conditions before bidding belong in the same preparation file. Prior hearings should not be used to infer either the authority required now or the suitability of the current certificate.

If a mortgage in favour of the highest bidder encumbers the auctioned property, section 180(2a) EO provides a special option. On application at the auction hearing, the obligation to lodge the Vadium is waived to the extent that the mortgage secured claim is expected to provide cover.

The waiver is neither automatic nor necessarily complete. The land register rank, current claim balance and expected cover matter. Merely being a creditor without the appropriate mortgage on the particular property is insufficient.

Where lodging is waived, section 180(3) EO requires the court to prohibit disposal, encumbrance or pledging of the registered claim and to note that prohibition in the land register. The creditor hub helps separate the claim, security and enforcement file.

Under section 180(2) EO, the lodged Vadium remains in court custody until the highest bid has been paid in full or the refusal of the award has become final. It is not a freely available amount that the buyer may simply demand back after the hearing.

Section 181(2) EO provides that any security held by the court serves as a pledge for all claims arising from the auction against the buyer. At the same time, under section 201(2) EO, the Vadium held by the court reduces the later amount payable on the highest bid.

If lodging was waived for a mortgage secured buyer, section 181(1) EO permits that buyer to lodge the Vadium later. This allows the prohibition on dealing with the claim to be lifted and its land register notation deleted. Custody, credit and deletion are therefore distinct steps.

Arrange the auction edict, court valuation, current auction conditions, court file number and intended bidding ceiling. Add the specific savings certificate, bank documents on its form, and identity and authority documents.

For a named savings certificate, the court documents required by section 179 EO also belong in the follow up file. A possible waiver application by a mortgagee additionally requires an up to date land register extract, claim statement, rank and cover calculation.

The buyer hub and buyer checklist help organise these materials. A broader account of the parties and procedure is available in the firm article on judicial auctions in Austria.