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21 September 2007
The Supreme Court has recently changed its case law on the possibility of enforcement with regard to co-owned real property.
According to previous court practice, distraint of one of the co-owners' interest in the property was insufficient to enforce an executive sale of the whole property where a contract to prevent such a sale had been entered into by the co-owners. The basis for the court's position was a statement made in the preparatory work to the Debt Enforcement Act. The statement implied that if the co-owners had entered into a contract whereby a (voluntary) sale of the whole property would not dissolve the co-ownership, such contract also prevented the executive sale of the property. This statement (made by the minister for justice in 1981) has been criticized by legal scholars as being inconsistent with the rules and principles of property law.
The new standpoint of the Supreme Court refers to the established legal principle that a prohibition of transfer (and, consequently, a prohibition of distraint) that has been agreed with regard to a non-gratuitous acquisition cannot be invoked against the creditors of the acquirer. Therefore, a contract entered into by the co-owners will no longer prevent the executive sale of the property. The reason for this change in case law is that previous practice made it too easy for co-owners to withhold property from creditors. However, gratuitous dispositions (eg, gifts or property left by will) can still be protected from the acquirer's creditors by agreement.
For further information on this topic please contact Margareta Andersson or Jörgen Wistrand at Wistrand Advokatbyrå by telephone (+46 31 771 21 00) or by fax (+46 31 771 21 50) or by email (email@example.com or firstname.lastname@example.org).
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