Some questions about the non-sequestration of the dwelling under the Civil Procedure Code

I. The provision of Art. 444, item 7 of the Civil Procedure Code

The Civil Procedure Code (SG, issue 100 of 20.12.2019) strictly stipulates that Enforcement cannot be directed against the following items of the debtor – an individual:: (…) the debtor's home, if he and none of the members of his family with whom he lives have another home, regardless of whether the debtor lives in it; (…). There is a wealth of case law on the text of the norm, which more or less manages to address the problems of its application. The text is not subject to extensive¹ interpretation and should be strictly applied² and precisely in accordance with the content of the norm, and in strict compliance with the conditions specified therein³which are imperative⁴But is this true?

The first such norm in the procedural law was introduced with the creation of the new Art. 979a of 07.08.1902 in the Civil Procedure Act (published in the State Gazette, issue 31 of 08.02.1892). This new provision introduced the non-sequestration of real estate in Bulgarian law. It has a slightly different meaning from the modern one, namely⁵:

"The following real estate may not be sold to the debtor:

1) his house, if it does not cost more – in cities from 1,000 BGN, and in villages – from 500 BGN, according to the tax assessment;

2) one vineyard of no more than two decares in size, or a vineyard or other garden of no more than one decare; and

3) one or more fields, all no larger than ten acres in size.

If the debtor has a house with a price greater than 1,000 leva - in cities and 500 leva - in villages, it is sold, but the amount of 1,000 or 500 leva is set aside from the sale price, which is paid into the local agricultural treasury only at the debtor's disposal, until he establishes, for a period of one year, that he has acquired another house.

"Regarding the land, only the upper part is being sold."

The provision of Art. 781 of the Civil Procedure Act of 1930 is similar. It was only with the adoption of the Civil Procedure Code of 1952 that the modern provision of the cited norm was introduced, initially b. "c" of Art. 339, and then b. "g", which was fully transferred to the current Civil Procedure Code. It is obvious that the good will of the Bulgarian legislator, which has already become a nearly 130-year-old tradition, for social and political reasons⁶ to preserve a minimum of existence for the debtor, not only regarding his necessary food, clothing, household items, minimum income, but also emphasized preservation of his home (as well as the necessary agricultural land) as real estate. But which object is actually the only home?

II. The practice of the courts

The non-sequestrability of the debtor's only residence raises numerous questions that continue to seek their solution in practice. For example, It should be clarified that in order to define a dwelling as non-sequestrable, it is necessary that neither the debtor nor the members of his family living with him own another dwelling.. By "family" the legislator understands only those persons who are related to the debtor by marriage, descent or adoption (spouse, children and adopted children), according to the provisions of the Civil Code. De facto marital cohabitation is irrelevant with regard to the non-sequestrability of the sole residence⁷.

Another controversial issue is whether the occupied real estate should constitute a "dwelling" under § 5, item 30 of the Spatial Planning Act (SPA). (A collection of premises, covered and/or open spaces, functionally and spatially united into a single unit to meet residential needs.). In Art. 110 of Ordinance No. 7 of 22.12.2003 on rules and regulations for the development of individual types of territories and development zones of the MRDPW, it is stated what must be present at least in one dwelling, namely - a living room, a kitchen or kitchenette, a bathroom-toilet and at least one storage room inside or outside the dwelling. In Art. 102, para. 4 of the Ordinance it is stated what must be present at least in one studio, namely: a separate sanitary unit (toilet with a sink). From the comparison of the above provisions, the conclusion follows that the studio, although it represents an independent object of the right of ownership, does not constitute a "dwelling" within the meaning of the ZUT, respectively within the meaning of Art. 444, item 7 of the Civil Procedure Code. The fact that the debtor lives in a studio and uses it to meet housing needs does not make it a dwelling, before the change of purpose of the studio in accordance with the relevant procedure, related to a number of requirements.⁸. The doctrine is pronounced in the same sense.⁹, emphasizing that under the old Civil Code the understanding of the concept of "dwelling" was broader, but the practice is no longer relevant. In a similar sense, namely that the studio does not constitute a "dwelling", it is also Decision No. 1319 of 01.03.2018 on civil case No. 2513/2018 of Sofia City CourtOf interest is also Decision No. 349 of 03.05.2018 on civil case No. 585/2018 of the District Court - Burgas, which rejects the residential nature of the studio, due to the lack of proof of the residential use.

The opposite is accepted in Decision No. 518 of 28.04.2017 on civil appeal No. 797/2017 of the District Court – Plovdiv, Decision No. 28 of 16.01.2015 on civil appeal No. 2096/2014 of the District Court – Burgas and Decision No. 2693 of 30.04.2018 on civil appeal No. 3515/2018 of the Sofia City Court, who say that when assessing the presence or absence of non-sequestrability in relation to a real estate, the bailiff, and the court, should not limit themselves only to the name of the respective independent object, and the specific circumstances should be assessed in each individual case - the type of property, as well as the ability of the property to satisfy the owner's housing needs.Regardless of the individualization in the property deed or in the architectural project, if the object is intended to meet residential needs and does not serve for creative activity, it is non-sequestrable.

Although rare, administrative courts also adopt this thesis, namely that the concept of existing "dwelling" includes a wide range of objects, including villas and holiday homes, caravans and temporary and permanent buildings, including illegal buildings (Decision No. 6293 of 01.06.2015 on administrative case No. 6855/2014, III district of the Supreme Administrative Court).

III. The practice of the European Court of Human Rights

The second opinion, namely that regardless of the documentary purpose, if the studio is used as a home, it has a residential character and actually constitutes a "sole residence", is also supported by the case law of the European Court of Human Rights.

According to the European Court of Human Rights (ECHR), the concept of “home”/“dwelling”, referred to in Art. 8, item 1 of the European Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR), is not bound by national law, but represents an autonomous concept, closest but broader than the French “domicile" (Niemietz v. Germany, no. 13710/88). So in Gillow v. United Kingdom, no. 9063/80, The ECtHR accepts that the existence of "sufficiently durable connections" with the alleged home (Prokopovich v. Russia, no. 58255/00; McKay-Kopecka v. Poland, no. 45320/99; Buckley v. United Kingdom, no. 20348/92), and they can be both weakened (long-term absence and presence of another "home") and strengthened (period of residence, ownership, presence of personal belongings, intention to reside permanently, emotional ties), when the durability of the ties would not be easily terminated. In Moreno Gómez v. Spain, no. 4143/02, the ECtHR develops the concept of “home”, regarding inviolability: “Home is the place, the physical space, where personal and family life manifests itself.". Therefore, the home is defined by the function, not the form of the object.. The legality of the residence at the time of the alleged violation is not decisive in determining the concept of “home” because, according to the case-law of the ECtHR¹⁰, An illegally occupied place can also be defined as a home. The factual situation is precisely why it is more important than the legal status.

The seizure of the only home, as a violation of a fundamental human right, according to the ECHR, is admissible to be considered as a result of a civil claim brought by a private individual. This violation can occur in the case of compulsory execution at the request of a creditor (Zehentner v. Austria, no. 20082/02), as well as in tax collection proceedings (Rousk v. Sweden, no. 27183/04).

In the context of the discussed practice, attention should also be paid to the norm of Art. 303, para. 1, item 7 of the Code of Civil Procedure, concerning the annulment of decisions that have entered into force, on the basis of a final decision of the ECHR, which has established a violation of the Convention on the Rights of the Child or the Protocols thereto. The annulment proceedings cannot be used for the return of the forcibly sold non-sequestrable real estate, if the injured person can be redressed with compensation, awarded either by the ECHR or by another procedure.¹¹, namely through a judgment claim and the issuance of a writ of execution¹².

IV. The concept of "dwelling"

The above gives reason to say that in practice there are fundamental contradictions regarding the definition of "dwelling" within the meaning of the Civil Procedure Code. The Civil Procedure Code lacks a definition of the dwelling, which Art. 444 refers to. As was stated, it has become necessary to understand that the concept should be derived from another normative act, namely the Spatial Planning Act, including Ordinance No. 7 of 22.12.2003 of the MRDPW.

As can be seen from the decisions cited so far, the concept of "dwelling" within the meaning of § 5, item 30 of the PZR of the ZTA is not applied absolutely and without reservations, as the dwelling can also include the studio, which by law should not be used to meet housing needs. The aforementioned practice of the ECtHR refers to the dwelling as all those objects in which a subject actually lives, and is not limited by their administrative purpose. This view is not shared by the national courts.¹³But is the legal definition of the ZTA and Ordinance No. 7 of 22.12.2003 of the MRDPW for a dwelling really applicable in determining the dwelling within the meaning of Art. 444, item 7 of the Civil Procedure Code?

In essence, the definition given in § 5, item 30 of the PZR of the ZUT is nominal, not real.¹⁴. The definition indicates the meaning with which the word is used in the relevant law and does not constitute a rule of conduct formulated in a legal norm in the text of the law. If the definition of the ZTA were from the category of real ones, then it could indeed be assumed without reservations that it extends its effect within the entire Bulgarian legal system. (such as the concepts of "property", "marriage", "family", which are also part of Art. 444, item 7 of the Civil Procedure Code), but this is not the case. The argument for this thesis is Art. 37, para. 1 and para. 2 of the Decree on the Implementation of the Law on Normative Acts (UPZNA), which stipulate that "words or expressions with established legal meaning are used in the same sense in all legal acts" (paragraph 1), and "aIf a deviation from the generally accepted meaning of a word or expression is required, an additional provision shall determine their meaning for the relevant regulatory act." (paragraph 2). This is precisely what the clarification of § 5 of the PZR of the ZUT states – “Within the meaning of this law”. To accept the real meaning of the definition under the ZTA would mean, for example, to accept as equivalent the definition of a dwelling in § 2, item 8 of the Supplementary Provisions of the Act on the Census of the Population and Housing Stock in the Republic of Bulgaria in 2021, which states that a “dwelling” is “is a separate and independent place from a structural point of view, which is adapted for living, consists of one or more rooms (residential and auxiliary) and has one or more independent exits to a publicly accessible part (staircase, common corridor, yard or directly to the street)".

The definition of "dwelling", given in Art. 110 of Ordinance No. 7 of 22.12.2003 of the MRDPW, cannot be accepted as real either. Although it defines an imperative rule of conduct, it is organically connected and subordinate to the ZTA., since according to § 3 of the same ordinance it is issued on the basis of Art. 13, para. 1 and § 18, para. 1 of the Final Provisions of the Spatial Planning Act. In this sense, the sanctioning consequences for violating the ordinance are contained in the Spatial Planning Act, for example in Chapter Twenty-One – Prohibition and Removal of Illegal Construction, and cannot be related to civil proceedings and enforcement proceedings. For example, in Decision No. 78 of 19.04.2018 of the General Assembly of the Municipality of Lovech under the Municipal Decree No. 41/2018 It is assumed that there is no requirement that the dwelling be legally constructed or that the building be put into operation, and it will be non-sequestrable even if it is in rough construction, thus distinguishing the administrative from the civil consequences for illegal construction and the use of a site not in accordance with the procedure provided for by the ZTA.

The definition of "dwelling", according to the Convention and the practice of the ECHR, on the other hand, is undoubtedly part of Bulgarian legislation by virtue of Art. 5, para. 4 of the Constitution of the Republic of Bulgaria and as such it has a corrective meaning in relation to the other national definitions. In the same sense it is Decision No. 7 of 1992 under Art. d. No. 6/1992 of the Supreme Court, which states that even international treaties in the field of criminal law, and specifically the ECHR, can clarify the meaning of existing criminal offenses and elements thereof in the Criminal Code. On the contrary, such a restriction does not exist regarding the concept of “dwelling” within the meaning of the CPC, the ECHR and the ZUT, and accordingly could be applied in determining non-sequestrable objects. The “broad” definition of a dwelling of the ECHR at first glance could hardly be accepted without reservations in the strict and precise application of Art. 444, item 7 of the CPC. But in fact, there is no reason to dismiss the court’s many years of practice lightly.¹⁵, since, as was indicated, the CPC lacks the sought-after definition, and filling the gap by appropriating concepts from other legal branches leads to practical difficulties and unpredictability in law enforcement. Moreover, in the event of a conflict between the Convention and national legislation, the former always takes precedence (Art. 5, para. 4 of the Constitution).

V. Second home abroad and the Convention

The provision of Art. 444, item 7 of the Civil Procedure Code should not at first glance lead to difficulties in law enforcement in the general hypothesis in which the debtor owns two or more dwellings - enforcement can be carried out on any of them, as long as it is not the only one, or "last". However, a problem is the application of the institute of non-sequestrability in the hypothesis in which the debtor owns one home on the territory of the Republic of Bulgaria and one outside the country.¹⁶. The relevant question is whether the law aims to ensure a living wage for individuals only on the territory of the Republic of Bulgaria, or in general, on a global scale.

The logic of non-sequestration is that a person should not be treated inhumanely when he has not voluntarily fulfilled his property obligation and when, at the request of his creditor, enforcement is initiated. The institute comes to correct, in the interest of the person subjected to coercion, the general principle of Article 133 of the Civil Procedure Act and Article 442 of the Civil Procedure Code, which subordinate the entire debtor's property to the creditor's claim. The aim is to guarantee the debtor that coercion will be exercised on him within such a framework that does not threaten his existence and the possibility of living normally in the future.¹⁷. Since the text of Art. 444, item 7 of the Civil Procedure Code is not subject to an expansive interpretation and should be applied strictly and precisely in accordance with the content of the norm, and with strict observance of the conditions specified therein, which are imperative, it is easy to conclude that non-sequestrability applies only to Bulgarian citizens and foreigners, to property on the territory of the country (Art. 3, para. 1 of the Law on the Protection of the Rights of the Child), which conclusion is fundamentally incorrect.

First of all, in order to confirm the existence of a second home outside the country, proof should be provided, which will be the burden of the interested party - the claimant. The next legal problem, however, arises when proving the purpose of the second home, given the obvious inapplicability of the ZTA and Ordinance No. 7 of 22.12.2003 of the MRDPW., since the residential purpose of the sites on a global scale is hardly affected by the criteria of the ordinance, even though the implementation would take place on the territory of the country, against a site falling within its criteria. Applying the criteria of the ZTA and the ordinance would almost certainly disqualify most residential properties located outside the country as such., which would in practice lead to the limitation of the non-sequestrability under the Civil Procedure Code in favor of the debtors. It is here that the provision of the Civil Procedure Code should be applied in accordance with the ECHR, which proclaims the right to housing as a fundamental defensible right of every person.¹⁸. As stated, the ECHR accepts that a home is defined by the function, not the form, of the object. This means that in the presence of a second residential property outside the country, according to its functional use, regardless of whether it is lived in (according to the Civil Procedure Code), this would lead to the non-sequestration of the dwelling located within the Republic of Bulgaria also being eliminated. The implementation on a residential property in the Republic of Bulgaria, in the presence of another dwelling outside its territory, a fortiori would not constitute a violation of the Convention, as well as the Civil Procedure Code.

In a similar vein, but with different arguments, the court ruled in Decision No. 81 of 02.02.2018 on Civil Case No. 95/2018 of the District Court - Burgas, which assumes that the law is not interested in the location of other homes owned by the debtor, regardless of whether they are located in another locality or on the territory of another country, it is irrelevant whether the law of the country in which the second home is located provides protection to the debtor's sole home and this home is considered non-sequestrable. Undoubtedly, regardless of where the second home is located, even outside the territory of Bulgaria, it is part of the debtor's property, i.e. he also owns a second home, which excludes the non-sequestrability of the home - subject to enforcement.

VI. A brief conclusion

The review of the case law reveals a deviation in the understanding of the application of the norm of Art. 444, item 7 of the Civil Procedure Code, and in particular its expansive interpretation regarding the content of the concept of "dwelling", as the same should not be defined in accordance with the criteria specified in the ZUT and Ordinance No. 7 of 22.12.2003 on rules and regulations for the development of the individual types of territories and development zones of the MRDPW. The social purpose of the norm requires its more careful application, taking into account other facts relevant to the definition of a property as a "dwelling"., contrary to the opinion adopted in the doctrine. Therefore, it would not be unreasonable to conclude that if a property, regardless of its purpose, satisfies the housing needs of its owner or the members of his family, without the presence of any other property of its own intended for housing, then it would fall under the protection of Article 444, item 7 of the Civil Procedure Code, as non-sequestrable property. The status of an independent object may have undeniable tax, utility and planning differences compared to residential objects, but these differences cannot serve to ignore the residential use of the various objects, including the studio, and eliminate their non-sequestrability, provided that all other conditions for this are met.

Ivan NIKOLAEV, lawyer