Case study: how long can it take to auction a mortgaged property

What do we do when everything does not go according to plan

Investing on Investown is secured by specific real estate. If, for whatever reason, the project does not go as planned, we have right away There are several ways to protect your investment.

But first of all, we try to use all the possibilities to successfully complete the project. We negotiate individually with the project owners, for example, we use the possibility of extension, which in many cases gives enough time, for example, to sell the pledge, complete the refinancing, etc.

Enforcement is a very arduous and lengthy process for all parties involved. Therefore, we approach it only when there is no other option for successful completion in an amicable way. The protection of investors and the return on investment are always the first priority. One option to return funds invested in projects to investors as part of recovery is auction of mortgaged property.

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Apartments Bozi Dar

Unfortunately, we had to proceed with enforcement in the case of the project Apartments Bozi Dar. The loan totalling over CZK 36 million was secured by, among other things, real estate valued at over CZK 52 million.

In addition to the lien on specific real estate, the loan is also secured by a lien on the business share of the project owner and the guarantee of the parent company. Thanks to the notarization with the clause of direct enforceability, the whole process was greatly accelerated, yet it took several months.

We presented the project to investors in the spring of 2024. As part of this project, from the very beginning, the owner regularly fell into arrears on the payment of interest. As we failed to arrange a remedy, we handed the whole matter over to an external law firm.

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• In September 2024, through a law firm, we formally invited the debtor to pay the full amount owed and notified him of the commencement of the execution of the lien.
• We also notified the cadastral office of the commencement of the exercise of the lien, which initiated the procedure to register the relevant note on the certificate of ownership in the Land Registry.
• With this step, we officially started the enforcement process
• After the expiration of the relevant period, an entry on the real estate that was the subject of collateral was entered in the Land Registry indicating the commencement of the exercise of the lien.
• In December of the same year, enforcement proceedings were initiated against the guarantor, MA FINANCE s.r.o.
• In the course of enforcement, the owner of the project tried to secure the refinancing and sale of the apartments. There was also a partial payment of overdue repayments.
• In June 2025, we decided to apply an enforcement lien on mortgaged properties and thus actively proceed to the sale of apartments ourselves.

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Successful auction of the first apartment

In August 2025, the deadline for the enforcement auction of the first mortgaged property was set. The auction took place on September 18. The apartment unit — apartment 2+kk — was successfully auctioned for 5.6 million CZK.

We distributed the funds from the auction among investors in January 2026. We distributed a total of CZK 4.8 million — that is, an amount reduced only by the cost of the auctioneer. The remuneration to the auctioneer, in this case directly to the bailiff, is normally governed by the execution tariff and usually amounts to 15% of the auctioned amount.

“For the first time, we distributed funds from a successfully auctioned property under pledge among investors. More auctions will follow. All our actions always lead to the protection of investments, including accessories. Although it may seem that the whole process is lengthy. “

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From auction to distribution of auctioned money

After the end of the auction Following are some legal steps.before the funds can be distributed among creditors.

1. First, the decision to strike must take legal force, which usually happens after the appeal period (that is, about a month from the auction).
2. After that, the auctioneer typically has 1-2 months to pay the auctioned amount.
3. Once the price is paid, the court or executor will prepare a schedule resolution that will determine how the proceeds will be distributed among the creditors according to the order of their collateral.
4. After the acquisition of legal force, funds are sent to individual creditors.

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Thus, the entire process from auction to payment to secured creditors usually takes several months, unless there are appeals or further delays.

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Auctions of other mortgaged properties

In the process of project enforcement Apartments Bozi Dar subsequent auctions of other mortgaged apartments. Since we managed to secure cooperation with the debtor, further auctions will be carried out in the form of involuntary auctions.

In practice, this procedure usually allows for a smoother and more efficient course of monetization of assets than an enforcement auction conducted without the cooperation of the owner. The goal of these steps is to successfully monetize the pledge with the maximum yield and continue the recovery process. You can auction other apartments within the project Apartments Boží Dar watch online and participate in every auction as well.

Tip: What is an auction, what are its legal deadlines and what is the difference between an auction and an auction? Read article about auctions.

Information in the Activity tab

As soon as a project gets into trouble, as a rule, it goes from a delay in the payment of proceeds, or even to recovery, we regularly inform investors in Activity tab for every project. We add a status update in case we have verified information available that we can share.