Conversion of Immobilier Seizure into Voluntary Sale: The Judges Have the Last Word

Imagine: you are the owner of a small building in Gemenos, rented to private individuals. A tenant stops paying rent, debts accumulate, and your banker, exasperated, initiates an immobilier seizure. You receive a summons, the procedure is launched. But you have an idea: rather than suffer a public auction, why not sell the property yourself, by private treaty, to clear the debt? You file a request for conversion of the seizure into a voluntary sale. The bank objects, claiming you are trying to buy time. The court must decide. How far can it refuse your request?

This is precisely the question the Court of Cassation answered on 12 January 1994, in a decision that remains authoritative today. The judges affirmed a simple but crucial principle: the lower court judges (i.e., the court of first instance and the court of appeal) have sovereign discretion to decide whether to grant or refuse the conversion of an immobilier seizure into a voluntary sale, in the absence of agreement between the parties. In other words, even if the debtor provides all necessary documents, the court can say no. A decision that protects creditors against delaying tactics, but which may seem unfair to a good-faith owner.

So, what should you do if you are in this situation? How can you convince the judge that your request is serious? This article explains everything in detail, with concrete examples from the PACA region, from Gemenos to La Ciotat. And if you need personalised advice, Maître Zakine is available for a consultation to analyse your file.

The facts: a story that happens every day

Mr. X is the manager of a SCI (Société Civile Immobilière) that owns a flat in Gemenos. Like many small companies, the SCI borrowed from several banks to finance the acquisition. But business turns bad, rents stop coming in, and payments are not made. The banks, tired of waiting, sue the SCI for payment and obtain an enforcement order (a judgment allowing seizure of assets). Then they initiate an immobilier seizure procedure: the property is registered with the land registry, and a hearing date is set for the auction.

Before this hearing, the SCI tries a gamble: it asks the court for conversion of the seizure into a voluntary sale. Specifically, it proposes to sell the property by private treaty, through an estate agent, for an estimated price of €200,000. The sum would repay the banks, and the surplus would go to the SCI. To support its request, the SCI provides all required documents: signed preliminary sale agreement, technical diagnostics, estate agent's certificate...

But the banks strongly oppose. Their argument: this request is dilatory, i.e., it aims solely to delay the auction. According to them, the SCI does not have the capacity to carry out a voluntary sale, and the proposed price is below the real value of the property. The tribunal de grande instance must therefore decide: should the conversion be granted or refused? The first instance refuses, the SCI appeals, and the court of appeal upholds the refusal. The SCI then appeals to the Court of Cassation, arguing that conversion is a right as soon as all documents are provided. The Court of Cassation dismisses its appeal, reminding the principle of sovereign appreciation of the lower courts.

The reasoning of the court — broken down

The dispute concerns Article 221 of the former Code of Civil Procedure and Articles L. 322-1 et seq. of the Code of Civil Enforcement Procedures (now codified). In essence, the law provides that the conversion of an immobilier seizure into a voluntary sale can be requested by the debtor, but it is not automatic. The judge must assess whether the request is serious and not dilatory.

The SCI argued that since it had provided all documents demonstrating the reality of the voluntary sale (preliminary agreement, diagnostics, etc.), the court was obliged to grant the conversion. But the Court of Cassation did not follow this reasoning. It held that the lower courts retain sovereign discretion: they can refuse conversion even if the documents are complete, as long as they consider the request dilatory or that it does not guarantee the satisfaction of creditors under satisfactory conditions.

In short, the Court validated the reasoning of the appeal judges who had considered that the SCI's request was late, the proposed price insufficient, and the SCI had not demonstrated its ability to finalise the sale within a reasonable time. In doing so, the Court of Cassation reminded that conversion is not a right, but a faculty left to the judge's discretion. A decision that confirms constant case law: the lower courts have the last word.

What few people know is that this decision also rests on the balance between the debtor's rights and the creditor's rights. The creditor has a right to prompt payment; the debtor can try to avoid the costs of an auction (which can reach 10 to 15% of the price). But if the conversion request appears to be a ploy to gain time, the judge must reject it. undefined, I have encountered cases where the debtor proposed a sale at a price 30% below market value, which was clearly abusive.

What this means for you — concretely

For landlord owners or indebted SCIs: this decision means you cannot demand conversion of the seizure into a voluntary sale. You must convince the judge that your request is serious. How? By providing tangible elements: a signed preliminary sale agreement with a solvent buyer, a price consistent with the market value (assessed by a property expert), a short completion period (less than 3 months). If you are in La Ciotat and your property is worth €250,000, an offer at €200,000 will likely be refused.

For creditors (banks, co-ownerships, suppliers): this judgment reassures you. You can oppose a conversion if you consider it dilatory. But be careful: the judge has sovereign discretion, so he may also grant it despite your opposition. You must therefore be ready to demonstrate the abusive nature of the request (delays, low price, lack of guarantees).

For potential buyers: if you are buying a seized property, know that conversion can block the auction. But if it is refused, the forced sale will take place. In both cases, inquire about the legal situation of the property from the court registry.

Example with figures: imagine a flat in Gemenos seized for a debt of €100,000. If the owner proposes a sale at €120,000 (market price), the judge will likely accept it. But if he proposes €90,000, the judge will refuse, because the creditors would not be fully repaid. The auction could then bring in €110,000, but with costs of €15,000, the creditors will receive less.

Four tips to avoid this type of dispute

• Anticipate the seizure: as soon as financial difficulties arise, contact your creditors to negotiate a payment schedule. A debt relief procedure or a mandat ad hoc can avoid seizure.
• If seizure is initiated, act quickly: the conversion request must be made before the eventual hearing (the auction date). The earlier you make it, the more you show your good faith.
• Provide solid evidence: a signed preliminary sale agreement, an estimate by a certified estate agent, bank financing from the buyer. Without this, the judge will doubt your seriousness.
• Be realistic about the price: the sale price must cover the debt and costs. If you propose too low a price, the judge will refuse. Have the property valued by an expert.

Besoin d'un conseil personnalisé ? Contactez Maître Zakine — première consultation 30 min à 45€.

Further reading: related case law and developments

This 1994 judgment is part of a consistent line. Already in a judgment of 13 November 1991 (No. 90-16.214), the Court of Cassation had held that the lower courts have sovereign discretion over the appropriateness of a conversion. More recently, the Court confirmed this position in a judgment of 28 January 2015 (No. 13-27.272), specifying that the judge may refuse conversion even if the debtor has found a buyer, if the price is insufficient or the request is late.

The trend is therefore clear: the sovereign power of the lower courts is an intangible principle. This means that, for the future, debtors will not be able to obtain conversion as of right. They will have to convince, with concrete elements, that their sale project is serious and not dilatory. Creditors, on the other hand, can be reassured: they have a right to scrutinise the request.

What this implies for you: if you are a debtor, do not rely on conversion as an automatic lifeline. Prepare a solid file, and if possible, obtain your creditors' agreement beforehand. If you are a creditor, monitor conversion requests and oppose if necessary, but be ready to justify your opposition.

Frequently asked questions

Can I request conversion of the seizure at any time? No, the request must be made before the adjudication hearing (the auction). After that time, it is too late.

If the judge refuses conversion, what happens? The immobilier seizure procedure continues normally: the property will be sold at public auction. You can appeal the refusal decision.

What are the costs of an auction? Approximately 10 to 15% of the sale price, borne by the buyer. In a voluntary sale, costs are generally lower (agency fees, notary).

Can the creditor oppose conversion without valid reason? Yes, but the judge decides. If the opposition is abusive, the creditor may be ordered to pay damages.

Do I need a lawyer to request conversion? Yes, the immobilier seizure procedure requires a lawyer. A lawyer specialised in property law can help you build a solid file.

Are you in a similar situation? A first 30-minute consultation with Maître Zakine (€45) can save you months of procedure — and often much more. Book an appointment →