Challenging (appealing) Property Valuation

However, it is easy to note that the position proposed in the information letter of the Supreme Arbitration Court of the Russian Federation is somewhat illogical, in particular, in terms of balancing the distribution of responsibility for the results of work between the evaluator and the bailiff, taking into account the professionalism of each of them. According to the position stated in the considered letter, the bailiff who accepted the appraiser’s report is always responsible for the results of the evaluation of the property of the debtor. Obviously, the logic here is this: the decision to approve the results of the assessment can be taken by the bailiff based on the results of the audit of the relevant report of the appraiser; if the bailiff accepted (approved) an unreliable report, therefore, he performed a low-quality check and should be held accountable for it. In this way, it is assumed that the bailiff is competent in matters of evaluation. But the meaning of paragraph 2 of Art. 52 of the Law on Enforcement Proceedings of 1997 was precisely the fact that a specialist appraiser is appointed in cases, firstly, when the bailiff has difficulty, or more simply, when he “signs” his incompetence in matters of assessment property of the debtor; and, secondly, when the debtor or recovered objects to the assessment made by the bailiff, i.e. when the parties to the enforcement proceedings initially question the competence of the bailiff in assessing matters. that the appraiser is appointed in cases, firstly, when the bailiff has difficulty, or more simply, when he “signs” his incompetence in the valuation of the debtor’s property; and, secondly, when the debtor or recovered objects to the assessment made by the bailiff, i.e. when the parties to the enforcement proceedings initially question the competence of the bailiff in assessing matters. that the appraiser is appointed in cases, firstly, when the bailiff has difficulty, or more simply, when he “signs” his incompetence in the valuation of the debtor’s property; and, secondly, when the debtor or recovered objects to the assessment made by the bailiff, i.e. when the parties to the enforcement proceedings initially question the competence of the bailiff in assessing matters.

We emphasize that, in accordance with paragraph 1 of the above Information Letter, the subject of the court’s consideration in the framework of a specific appeal should be nothing other than the accuracy of the value of the subject property assessed by an independent appraiser. It turns out that the bailiff should be responsible not for his actions, but for the results of the work of a professional appraiser. And this is despite the fact that all proceed from the presumption about the incompetence of the bailiff in these matters. [358]

In addition, the exemption from liability of an appraiser for his assessment is also puzzling because, according to the Federal Law “On appraisal activities in the Russian Federation,” the appraiser’s liability is always insured 1.

However, at present judicial practice has begun to emerge, indicating the possibility of self-challenging the assessment indicated in the appraiser’s report.

☆ Thus, according to the findings of the Second Arbitration Court of Appeal, contained in the Order of March 19, 2009 in case no. A29-10183 / 2008 2, the legislation explicitly provides for the possibility of independent parties to the enforcement proceedings to challenge the value of the property specified by the appraiser in the report. The same conclusion was formulated in the Decree of the Federal Antimonopoly Service of the West-Siberian District of September 4, 2008 no. Ф04-5398 / 2008 (11013-А75-12) in case No. А75-3164 / 2008 3in which the court indicated that Art. 85 of the Law on Enforcement Proceedings of 2007 provides for the possibility of independent disputing by the parties of the enforcement proceedings of the value of the appraisal object indicated by the appraiser in the report (clause 3 part 4). Since the property was valued by an appraisal company, and not by a bailiff, based on the provisions of the said article of the Law on Enforcement Proceedings, only the property valuation indicated in the appraisal company’s report could be challenged 4.

If the property was assessed by the bailiff independently (without the involvement of an appraisal expert), then the parties to the enforcement proceedings are entitled to challenge the assessment decision in court (part 7, article 85 of the Law on Enforcement Procedure, 2007). In addition, property valuation performed by the bailiff without the involvement of an appraiser may be appealed by the parties of the enforcement proceedings in the manner prescribed by law. The fact is that in accordance with Art. 121 and ch. 18 of the Law on Enforcement Procedure provides for the possibility of appealing against actions (inaction) and orders of the bailiff in the order of subordination.

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Thus, it can be said that the Law on Enforcement Proceedings of 2007 establishes a fair balance of distribution of responsibility for the results of work between the appraiser and the bailiff 5 .

Moreover, the evaluation procedure in the enforcement proceedings is regulated by the Law on Enforcement Procedure. In cases provided for by law, the bailiff must appoint an appraiser. By virtue of Art. 48 of the law, the appraiser is a specialist, a person involved in enforcement proceedings. According to Art. 61 of the Law on Enforcement Procedure specialist [359] [360] [361] [362] [363] is responsible in accordance with the legislation of the Russian Federation for giving a false report or opinion, which he warned the bailiff.

Thus, the appraiser is a procedural person in the enforcement proceedings with their rights, duties, and responsibilities. The same procedural persons are the implementer, the translator, other specialists involved by the bailiff.

In turn, the bailiff does not have the right to substitute the decisions of the said persons and accept their responsibility.

The law does not regulate the procedure and grounds for the bailiff’s refusal to accept a report or the procedure for appointing and conducting a reassessment procedure.

The activities of the bailiff are the activities of a public authority, a public servant, for which the principle “everything is forbidden except what is permitted” applies.

Thus, on the basis of this principle, the bailiff within the three-day period established by law, in accordance with paragraph 4 of Art. 85 of the Law is obliged to make a decision on the assessment of the seized property, taking into account the value determined by the appraiser.

We believe that the attempt to empower the bailiff to verify the validity of the appraiser’s report, giving the bailiff the opportunity to reject the appraiser’s report on the grounds of a substantial overstatement / undervaluation leads to negative consequences, such as:

Unjustified delays in enforcement proceedings;

The discretionary authority of the bailiff (discretionary powers are the totality of the rights and duties of a public authority, officials, enabling the public authority or official to determine at any discretion the type and content of the management decision discretion of one of several management decisions options envisaged by the departmental act 1) and, as a result, the possibilities of For corruption offenses.

Thus, we believe that granting the bailiff not authorized by law, including refusing to accept the appraiser’s report on the grounds of a substantial understatement or overestimation of the value of the property, is not based on the law, and also violates the law’s balance of responsibility for the results appraisals, and also creates significant opportunities for corrupt activities in the field of enforcement proceedings.

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