Public Auction Sale of Movables in Jordan: The Lawyer's Role

When a person's movables are attached in Jordan and their sale by auction is announced, the prevailing impression is that the matter is over and that what remains is a mere formality. In reality, an enforcement sale is not a single event but a series of stages laid down by the Enforcement Law, each with its own safeguards and time limits, and once a stage passes without the interested party asserting what they are entitled to in it, whatever could have been asserted is lost. The value of the property is assessed by expert examination, not by impression; the bidding stops by operation of law once its proceeds are sufficient; and the property of a third party may not be attached in the first place. Because these stages follow one another quickly and all end at the moment the auction is awarded, dealing with them requires a lawyer who follows the enforcement file step by step, not a review that comes after the property has been sold.

1. What Counts as Movable Property

The Jordanian Civil Code defines real property in Article 58 as anything fixed in its place and settled there that cannot be moved from it without damage or a change in its form, and everything else is considered movable. Movable property is therefore any property that can be moved from one place to another without the move leading to its destruction, damage or a fundamental change in its nature.

Some movables may be subject to special rules depending on their nature or the purpose for which they are allocated, as is the case with certain property attached to real property and treated as an accessory to it. This classification is not a theoretical luxury: describing property as movable or as an accessory to real property changes the way it is sold and changes the objections that can be raised, and it is the first thing the lawyer checks when presented with an attachment report.

2. Sale by Public Auction and Its Basis

Forced enforcement is the legal means that allows a creditor to obtain a right established against the debtor, once it is due and established by an enforceable instrument capable of enforcement. Within the limits of the Enforcement Law, the legislature has allowed the creditor to attach the debtor's property and sell it in order to recover the right from the proceeds of the sale, and one of the most prominent forms of this is the sale of attached movable property by public auction.

Sale by public auction means the mechanism by which the attached property is offered for sale to those wishing to buy it under legally defined procedures, so that the auction is awarded to whoever offers the highest price in accordance with the rules. It is one of the most important stages of enforcement against movables, as the property moves from the stage of attachment to the stage of liquidation and conversion into a cash sum allocated to paying the debt and the expenses in accordance with the law.

The general rule is that the debtor's property is a general security for the payment of their debts and obligations, unless a legal provision exempts a particular property from attachment and enforcement. Determining whether a specific property falls within this general security or is exempted from it by a provision is one of the questions examined early, because examining it after the sale is of no use to its owner.

3. Who May Not Take Part in the Auction

The legislature has taken care to bar certain persons from entering the auction, to ensure the integrity of the enforcement procedures and to prevent conflicts of interest or the exploitation of an office or an agency. The most prominent of these, under the governing provisions, are: judges, whether or not they heard the enforcement case; employees of the Enforcement Department; lawyers who conducted the enforcement procedures as agents for one of the parties to the enforcement; and the debtor, subject to the exceptions established by the law.

The purpose of this bar is to protect the auction procedures from exploitation or conflicts of interest, and to ensure that the highest possible price is achieved for the attached property. In practice, the participation in the bidding of someone covered by the bar is a fact that affects the validity of the procedure, and it is one of the matters the lawyer following the file monitors moment by moment.

4. Special Rules for Certain Property and Their Effect on Its Value

The legislature has taken account of the nature of certain movable property and set special rules for it on attachment, and these rules are essentially safeguards for the owner of the property:

Type of property	The special rule that applies
Property attached to real property	In some cases it may not be attached separately from the real property where it is intended to serve it or is necessary for its use, in accordance with the special provisions of the Enforcement Law
Gold, jewelry, ornaments and precious stones	They must be described precisely, their weight stated, and valued by an expert appointed in accordance with the rules, and the expert's report is attached to the attachment report once the valuation is done
Cash and banknotes	Their description and amount must be stated in the attachment report and they must be deposited according to the procedures established at the Enforcement Department
Fruit and crops	They may be attached while still on the trees or standing in the ground, stating the location and description of the property, the type of crops or trees, their expected yield and its approximate value
Shares and bonds	Negotiable or bearer shares and bonds are subject to the special rules on attachment and sale as established by the Enforcement Law

The value of the attached property is assessed by one or more experts appointed in accordance with the rules, to reach an estimated value relied on in the sale and bidding procedures. This is where the most dangerous point lies for the owner of the property: the estimated value is the basis for everything that follows, and a vehicle or gold jewelry valued below its real worth is sold for less than it deserves, so the debt remains outstanding after the property is lost. Following the expert examination and contesting its report in time is one of the most important things the lawyer does at this stage.

Practical note: One of the most frequent occurrences in practice is the attachment of property in the debtor's possession that belongs to someone else, such as goods held on consignment, or furniture or equipment belonging to a partner or relative. The law requires the enforcement officer to verify that the property to be attached belongs to the debtor, and if it turns out to belong to another person, the officer refrains from attaching it, draws up a report of the fact and submits it to the Head of Enforcement. In this situation the lawyer proves the third party's ownership with documents at the right time; do not settle for an oral objection before the officer.

5. The Sale Decision and Urgent Sale

Once the attachment procedures are complete and there is no legal obstacle to proceeding with the sale, the Head of Enforcement decides to sell the attached items at the request of the interested parties or the judgment debtor, and as soon as the decision is issued, the enforcement officer begins taking the sale procedures in accordance with the law.

The law has allowed the Head of Enforcement, in cases where the attached property is liable to spoil, consists of goods subject to price fluctuations, or is of a value that cannot bear the cost of preserving it, to decide to sell it urgently and in the manner he considers appropriate. This urgent path compresses the time available to the owner of the property severely, and makes delay in engaging a lawyer particularly costly, because the sale may take place before the person concerned has grasped what is happening.

6. Publicity, Announcement and Electronic Auction

Publicity is one of the most important safeguards governing the sale of attached property, as it aims to give the opportunity to the largest possible number of bidders, which helps to reach the highest price. Under Article 61 of the Enforcement Law, the enforcement officer makes an inventory of the attached items in a written report before announcing their sale, stating any shortfall that has occurred, and the sale is announced by the means specified by the law, with the announcement including a description of the items for sale and their location.

The legislature has also allowed the sale to be conducted by electronic auction, and has regulated this through the Electronic Auction Sale Instructions No. 1 of 2022 issued under Article 61(d) of the Enforcement Law, in line with the move toward digital transformation in enforcement procedures. The electronic auction widens participation in the bidding, strengthens publicity and makes it easier to reach a larger number of bidders, which may have a positive effect on the final value of the property sold.

The other side of this expansion is that a breach of the announcement conditions or of the rules of the electronic auction is in itself a flaw in the procedure, and assessing whether what happened in a particular file met these conditions is a legal question the lawyer settles after reviewing the enforcement papers.

7. The Bidding and the Deposit

The bidding takes place at the time and place specified in the announcement and in the presence of the enforcement officer, and a report is drawn up of the facts and procedures that took place.

Every participant in the bidding is required to provide a deposit of 10% of the estimated value of the attached items. The Head of Enforcement may exempt the creditor from paying the deposit if the creditor is taking part in the bidding and the amount of the debt exceeds the estimated value of the property for sale. Once the bidding ends, its report is submitted to the Head of Enforcement to take the appropriate decision on the award or on repeating the sale procedures, as the case requires.

8. Halting the Bidding Once the Proceeds Are Sufficient

This is the rule that most debtors are unaware of, and it is one of the most important things that can be relied on.

If there are several attached movables, and part of them has been sold for enough to pay the principal of the debt, its interest and the expenses, the bidding stops at that point. As a result, the remaining movables are returned to their owner and the attachment on them is lifted, since the purpose of the enforcement has been achieved.

This rule reflects the principle of proportionality in enforcement, so that property worth more than what is needed to pay the debt and its related costs is not sold. However, applying this principle in reality depends on an accurate calculation of the principal of the debt, its interest and the expenses at the moment of sale, and on asserting it in time before the competent authority, which is not possible for someone who does not follow the file in detail. Other enforcement issues are connected with this principle, which we have addressed in our article on debtor imprisonment under the Jordanian Enforcement Law.

9. Award of the Auction, Deposit of the Price and the Bidder's Default

When the bidding ends, the auction is awarded to the bidder who offered the highest price in accordance with the legal procedures. The successful bidder must deposit the price with the Enforcement Department immediately, unless the bidder is a creditor and a decision has been issued exempting them from depositing all or part of the price in view of the amount and rank of their debt. Movable property that is subject to registration is registered with the competent authority after the prescribed price has been deposited.

If the buyer refuses to take delivery of the property awarded to them at auction, the bidding is repeated, and if the second bidding produces a lower price than the price at which the first auction was awarded, the difference in price may be recovered from the defaulting bidder in accordance with the legal provisions. This is a point overlooked by those who take part in auctions in good faith: participation is a commitment, and withdrawing from it may give rise to financial liability for the difference in price, which calls on the bidder themselves to make sure of their legal position before entering the bidding, not after.

10. The Effects of the Sale on the Parties to the Enforcement

Completion of the sale by public auction results in the movable property sold leaving the debtor's ownership and passing to the buyer to whom the auction was awarded in accordance with the rules, and the proceeds of the sale take the place of the property within the scope of the enforcement and are allocated to paying the debt, the expenses and the rights due in accordance with the legal rules. As for property that was not sold, the effects of the attachment are lifted from it once the purpose of the enforcement has been achieved and there is no legal reason for the attachment to continue.

The proceeds of the sale are allocated to satisfying the rights of the creditors according to their legal ranks. If there are several creditors, the enforcement proceeds are distributed according to the rules established for the order and ranking of creditors, and if they are of the same rank and the proceeds are not enough to satisfy their rights in full, they are distributed according to the governing legal rules. This question of rank is what determines whether the creditor will actually receive anything or will find the proceeds already exhausted ahead of them, and it is one of the first things the lawyer assesses for a creditor before incurring enforcement expenses at all, as we explained in our article on debt collection in Jordan.

For the bidder to whom the auction is awarded, completing the sale procedures, depositing the price and completing the registration requirements where necessary results in the property passing to them in accordance with the law, taking into account the nature of the property and whether or not it is subject to registration. The enforcement officer, for their part, must take the procedures relating to receiving the price and depositing it with the Enforcement Department in accordance with the rules, and bears the liability established by law in the event of a breach of the duties entrusted to them.

These provisions intersect with enforcement against real property, an area with its own rules that we have addressed in our article on the property seizure procedure under the Jordanian Enforcement Law, and they are sometimes connected with disputes over the use of property that we have covered in our article on the action to stop interference with the use of property.

Frequently Asked Questions

What is movable property under Jordanian law?

The Civil Code defines real property in Article 58 as anything fixed in its place and settled there that cannot be moved from it without damage or a change in its form, and everything else is considered movable. A movable is therefore any property that can be moved without its destruction, damage or a fundamental change in its nature.

How much is the deposit required to take part in the auction?

Every participant in the bidding is required to provide a deposit of 10% of the estimated value of the attached items, and the Head of Enforcement may exempt the creditor from paying it if the creditor is taking part in the bidding and the amount of the debt exceeds the estimated value of the property for sale.

Is all the attached property sold even if it exceeds the debt?

No. If there are several attached items and part of them is sold for enough to pay the principal of the debt, its interest and the expenses, the bidding stops at that point, and the remaining property is returned to its owner and the attachment on it is lifted, applying the principle of proportionality in enforcement.

What if the attached property belongs to someone other than the debtor?

The law requires the enforcement officer to verify that the property to be attached belongs to the debtor, and if it turns out to belong to another person, the officer refrains from attaching it, draws up a report of the fact and submits it to the Head of Enforcement. Proving the third party's ownership requires documents submitted in time.

Who may not take part in a public auction?

Participation is prohibited for judges, whether or not they heard the enforcement case; employees of the Enforcement Department; lawyers who conducted the enforcement procedures as agents for one of the parties to the enforcement; and the debtor, subject to the exceptions established by the law.

How is the value of attached property assessed?

The valuation is carried out by one or more experts appointed in accordance with the rules, to reach an estimated value relied on in the sale and bidding procedures. Gold or silver ornaments and bullion, jewelry and precious stones must be described precisely, their weight stated and valued by an expert, and the expert's report is attached to the attachment report.

Can attached property be sold urgently?

The law allows the Head of Enforcement to decide on an urgent sale in the manner he considers appropriate if the property is liable to spoil, consists of goods subject to price fluctuations, or is of a value that cannot bear the cost of preserving it.

What follows if the person to whom the auction was awarded withdraws?

Legal Consultation

The enforcement sale is one of the stages in which rights holders most often lose for reasons of timing rather than substance: the debtor who did not follow the expert examination finds their property sold below its value while the debt is still outstanding; the third party who did not prove their ownership in time finds their goods sold in a file that has nothing to do with them; the creditor who did not assess their rank among the creditors spends on enforcement and then receives nothing; and the bidder who withdrew is pursued for the difference in price. What all these situations have in common is that everything that can be asserted is lost at the moment the auction is awarded, and that the urgent path may cut the available time down to days. This is why following the enforcement file from within, not from outside after the sale has taken place, is what actually protects the right, and it is what our firm's team provides through its enforcement case services, including following the attachment procedures, contesting expert reports, proving third-party ownership and insisting on halting the bidding once the proceeds are sufficient. You can contact Alabwini Law Firm to arrange a specialist legal consultation.

Sale of Movable Property by Public Auction Under the Enforcement Law