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When selling a debtor's land plot at auction, only the debtor's share in the right to it is subject to sale

Court cases
When selling a debtor's land plot at auction, it is not the entire land plot that is subject to sale, but only the debtor's share in the right to it.

As part of the bankruptcy case of S.V. Evdokimov, the financial manager of his property applied to the court with a statement to change the regulation on the procedure, conditions and terms for the sale of the debtor's property (hereinafter - the regulation on sale), approved by the determination of the Arbitration Court of the Republic of Tatarstan dated 04.10.2023.

The financial manager applied to the court with a statement to change the regulation on sale, including in connection with a typo he made in the proposed version of the regulation, since the debtor owns only 1/5 of the land plot, the remaining 4/5 in equal shares belong to the debtor's ex-wife and their three children.

Position of the Supreme Court of the Russian Federation:

1. The bankruptcy estate of a bankrupt citizen consists of his property available on the date of the decision of the arbitration court to declare him bankrupt, with the exception of property specifically stipulated by law (clause 1 of Article 213.25 of the Civil Code).

2. The property may be in common ownership with the determination of the share of each of the owners in the right of ownership (shared ownership) or without determining such shares (joint ownership) (clause 2 of Article 244 of the Civil Code of the Russian Federation).

3. A share in the right of ownership is an independent object of civil rights participating in circulation, taking into account such a feature as the preemptive right of purchase (clause 2 of Article 246 of the Civil Code of the Russian Federation).

4. Thus, as a general rule, when a thing is in the shared ownership of several persons, the bankruptcy estate includes the debtor's share in the right to this thing.

5. Other owners, as already noted, have a preemptive right to purchase the debtor's share, the mechanism for the implementation of which is provided for by the Constitutional Court of the Russian Federation in the Ruling No. 23-P of 16.05.2023.
The Determination of the Supreme Court of the Russian Federation No. 306-ЭС24-14007 (2) dated 09.12.24.