According to ÚGKK’s interpretation, priority is determined by the order of registration on the property title sheet. A mortgage registered before the apartment owners’ statutory lien therefore survives the auction, and the successful bidder acquires the apartment subject to it. In one dispute, the Košice Regional Court ruled differently and granted the apartment owners priority because ownership of the apartment had first been acquired before the mortgage was registered. When satisfying a bank’s claim that is due, a distinction must be drawn between a voluntary auction and an enforcement auction; the cited ÚGKK interpretation concerning deletion of a senior lien related to an enforcement auction.
An apartment owner is in arrears with payments for services and contributions to the operation, maintenance and repair fund. The owners in the building have voted to put the apartment up for voluntary auction. The apartment is also subject to a mortgage taken out by the owner years ago. A prospective bidder needs to know which encumbrances will remain. The same question matters to the bank and the debtor.
On what basis do apartment owners request an auction?
A statutory lien over the apartment arises in favour of the other owners of apartments and non-residential premises to secure claims relating to the building and the apartment (Section 15(1) of Act No. 182/1993 Z. z.). We explain why it cannot be deleted in the question statutory lien over an apartment. A decision to request a voluntary auction requires a majority of the votes of all owners (Section 14b(1), letter o)) and the request is submitted on their behalf by the building manager (Section 8b(1), letter h)) or by the owners’ association if it manages the building.
Does the statutory lien take priority over the mortgage?
If an apartment is subject to several liens, the order of registration determines the order in which the secured claims are satisfied (Section 151k(1) of the Civil Code). For immovable property, this is the order in which the cadastral office received the documents (Section 41(2) of the Cadastral Act). The Apartment Ownership Act does not expressly give the statutory lien priority. In its Cadastral Bulletin 2/2025, the Geodesy, Cartography and Cadastre Authority (ÚGKK) therefore takes the view that if another lien precedes the statutory lien on the property title sheet, the statutory lien ranks behind it.
The Košice Regional Court ruled differently in one dispute. In its judgment of 28. 2. 2023, case no. 6Co/190/2022, it proceeded on the basis that the statutory lien arises when ownership of the apartment is first acquired. It granted the apartment owners the status of senior secured creditors where, at the time of enforcement, they had a claim against the apartment owner that was due and ownership of the apartment had first been acquired before the mortgage was registered. In the same dispute, the Supreme Court had previously set aside an earlier judgment of the Regional Court and directed it also to explain the significance of registration of the statutory lien for its ranking (order of 24. 10. 2022, case no. 9Cdo/264/2020).
What happens to the liens after the property is awarded to the successful bidder?
The Voluntary Auctions Act proceeds on the basis that liens are not extinguished by the transfer of ownership.
The following quotation is reproduced in its original language:
Ak osobitný zákon neustanovuje inak, prechodom vlastníctva alebo iného práva k predmetu dražby nezanikajú záložné práva a majú účinky voči vydražiteľovi […]
When a lien is enforced, however, the Civil Code rules governing what happens to the other liens apply. If enforcement is carried out by the senior secured creditor, meaning the creditor whose lien is registered first, the apartment is transferred free of the other creditors’ liens (Section 151ma(3)). If enforcement is carried out by a lower-ranking creditor, the apartment is transferred subject to the liens of creditors ranking ahead of that creditor, while the rule on transfer free of encumbrances applies, with the necessary adjustments, to creditors ranking behind that creditor (Section 151ma(6)).
ÚGKK concludes from this that, when registering the successful bidder as owner, the cadastral office deletes only liens registered after the statutory lien being enforced. Under this interpretation, a mortgage registered before it remains, and the successful bidder acquires the apartment subject to it. If the bank’s claim is not yet due, the transfer of ownership does not make it due (Section 31 of Act No. 527/2002 Z. z.).
If the bank’s claim is already due
If the claim of a creditor ranking ahead of the party requesting the auction is due at the time of enforcement, that creditor may commence its own enforcement or also seek satisfaction from the sale proceeds (Section 151ma(8)). In the same bulletin, addressing an auction conducted in enforcement proceedings, ÚGKK takes the view that the cadastral office will then also delete the senior creditor’s lien, but only if the documents on which registration of the successful bidder as owner is based expressly show that the claim is due and has been lodged in the auction proceedings. The cadastral office does not itself decide whether the claim has been extinguished and will retain the lien in the absence of that information.
What to consider before the auction
- If you want to buy the apartment at auction, read the auction notice. It should identify the rights and obligations encumbering the apartment if they materially affect its value (Section 17(1), letter d) of Act No. 527/2002 Z. z.), and the expert takes account in the valuation of encumbrances that will survive the transfer of ownership (Section 12(1)). Compare this with the current property title sheet.
- If you own the apartment, the auctioneer must cancel the auction if, before it begins, you deposit with the auctioneer the amount of the claim together with ancillary amounts and the auction costs to the extent that you are liable for them (Section 19(1), letter k)).
- If you are a higher-ranking creditor, check whether you have also received the auction notice and decide whether to seek satisfaction from the proceeds.
How we can help
Before the auction, we review the property title sheet and the auction terms. We assess which encumbrances will remain after the property is awarded to the successful bidder as part of our property due diligence. If you are buying the apartment, our property purchase service follows on from this. For creditors and owners whose apartments are being auctioned, we assess the lien enforcement process as part of our security agreement service. The article enforcement of a lien over immovable property describes the voluntary auction process itself, while second-ranking lien explains the position of creditors at different ranks.
This answer provides general information on the law as at 3 October 2026. It does not constitute legal services or replace an assessment of an individual case. The details of your situation may differ. Book a consultation to discuss them.
