Profits after foreclosure
Buschmann wants to dry up the swamp surrounding junk properties
March 11, 2024, 7:49 a.m
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Foreclosure auctions offer the opportunity to obtain real estate relatively cheaply. Because they don’t have to be paid immediately. This is apparently a real invitation for some landlords. But Justice Minister Buschmann no longer wants to play the game – and wants to change the rules.
Federal Justice Minister Marco Buschmann wants to put a stop to unscrupulous transactions with so-called junk properties. To this end, he wants to re-regulate the legal basis for compulsory auctions. “There is a bad game being played with junk real estate in many communities – especially where the economic conditions are difficult,” Buschmann told the newspapers of the Funke media group.
“Unscrupulous businessmen buy problem houses at auction, accommodate people with migrant connections there under sometimes deplorable conditions and thereby squeeze the properties like a lemon – without ever paying the price owed.” In doing so, they took advantage of the right to compulsory auction.
According to information from the Funke newspapers, the draft law provides that the administrative offices of municipalities have the opportunity to temporarily deprive the buyer of the auctioned property of the house or apartment. “Following an order from the court administration, any rental income, for example, must then be paid to the court-appointed administrator,” the draft law states, according to the report.
The prerequisite is that the house or apartment is classified as a problem property. In such cases, the buyer of the property should only be able to manage or rent the building once he has paid his bid for the compulsory auction in full. The current law on compulsory auctions only requires the new owners to pay a so-called security deposit.