“Hello, about a year ago I purchased a detached house and the associated plot of land through a reputable estate agent. The title to the detached house was duly registered in the land register, and there were no indications of any potential future legal issues throughout the entire registration process. About 14 days ago, I received a letter from the insolvency administrator informing me that the previous owner of the detached house had become insolvent. The insolvency administrator further stated that he intended to include the detached house I had purchased in the debtor’s insolvency estate, as he considers the purchase contract for the house to be void or invalid. In addition, I received a seizure order for the detached house from the Police of the Czech Republic. The reason given for the seizure was that the detached house is alleged to have been acquired from the proceeds of a criminal offence. I am seeking legal advice on how I can resolve this situation in order to avoid both the loss of the detached house and the loss of my life savings.“
Your question concerns two different legal situations, which may, however, arise simultaneously. In the event that your property has been included by the insolvency administrator in the debtor’s insolvency estate, it is necessary to file an action for the exclusion of the property from the insolvency estate with the locally competent insolvency court within 30 days of being notified by the insolvency administrator.
The action for separation could be supported by the argument that you acted in good faith when purchasing the detached house and that there were no indications whatsoever that the purchase agreement might be an invalid legal act. It should be noted that all signatures on the contract were notarised and that you purchased the property through a reputable estate agent with legal support. Furthermore, it can be argued that the purchase price was paid properly, on time and in accordance with the terms of the purchase or escrow agreement. It should also be noted that, during the registration proceedings, the debtor raised no objections whatsoever to the validity of the purchase agreement, made no allegations of misrepresentation and did not contest the application for registration of ownership of the detached house. If these assertions are supported by appropriate evidence and the insolvency administrator cannot sufficiently prove that you misled the previous owner or debtor, the court should rule in favour of the action for separation of property, so that the detached house remains in your ownership.
In the event that the previous owner of the detached house was to assert the nullity of the purchase agreement, whereby the matter, as in your case, is not the subject of insolvency proceedings, they would be compelled to bring an action for a declaratory judgement to clarify whether or not a legal claim exists. Put simply, this would mean bringing an action to determine whether a legal claim has been established between you and the previous owner of the detached house through the purchase agreement. Your argument in these proceedings would essentially be the same as that described in the previous paragraph. The previous owner of the detached house would also have to apply to the relevant Land Registry Office for the entry of a note of dispute, the purpose of which is to indicate that there are discrepancies in the Land Registry Office regarding your detached house. If the previous owner were to apply to the relevant Land Registry Office for the entry of a note of dispute, they would have to prove, at the time of the application, that they are also seeking recognition of their right of ownership through legal proceedings.
The second part of your question concerns the situation in which your detached house was seized by the police. This circumstance suggests that a criminal offence may have been committed in connection with the conclusion of the purchase agreement with the previous owner. An appeal may be lodged against the police’s decision to seize the detached house. It should be noted that the deadline for submitting the appeal is only three days. The appeal could again be based on the fact that you acquired the property in good faith.
From the context of your entire enquiry, it appears that, whilst the detached house may have been used in connection with the commission of a criminal offence in this case, it certainly does not derive from the proceeds of a criminal offence. The proceeds of a criminal offence primarily refer to the purchase price that was unlawfully paid to a person without your involvement and without your knowledge.
Even if the detached house is seized by the police, you do not need to fear losing it, particularly given that you are considered the aggrieved party in this matter.
The seizure of the house is merely a provisional measure designed to prevent assets from being placed beyond the reach of the law enforcement authorities. The decision to seize the property alone therefore does not, under any circumstances, deprive you of your ownership rights to the house.
To summarise what we have outlined above: you have a long road ahead of you. However, we believe it is unlikely that you will lose the house.