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Compelling Payment of a Property's Debts

2024-06-03

Compelling Payment of a Property's Debts

In a construction-participation (joint-build) contract, the parties agree on costs and responsibility for paying them. Typically, the developer bears all costs of obtaining the necessary permits and preparing for and carrying out construction of the newly built structure, but it is logical for the costs and debts of the property relating to the period before the construction-participation contract to be borne by the owner.

If there is no agreement regarding the property's pre-contract debts and costs, or the developer is unaware of them, and the owner also fails to pay them, this will become a source of disputes and damage to the developer in the future. In that case, the developer has the right to compel the owner, through the courts, to pay the property's debts relating to the period before the contract was signed.

Parties to the Lawsuit

The plaintiff is the developer under the construction-participation contract. The owner is the defendant. The petition may be filed in the court of the defendant's place of residence, the place where the contract was concluded, or the place of performance of the obligation.

Method of Enforcing the Judgment

At the enforcement stage, the judgment is served on the party against whom it was rendered. They must, within ten days of service, take action to pay the adjudicated amount. Otherwise, the seizure and sale of the judgment debtor's property, or their arrest, becomes available.

Some key points related to this type of lawsuit: the most significant property debts include debts for water, electricity, gas, and telephone; sewer connection fees; property taxes; debts owed to the Social Security Organization; and municipal duties and debts. Debt to the Social Security Organization typically concerns industrial properties and relates to the insurance of persons working at that industrial unit.

Compelling Payment of a Property's Debts

Legal Bases Related to a Lawsuit for Compelling Payment of a Property's Debts in a Construction-Participation Contract

Article 220 of the Civil Code:

Contracts bind the contracting parties not only to perform what is expressly stipulated therein, but also to all the consequences that, by custom and usage or by law, result from the contract.

Article 225 of the Civil Code:

A matter that is customary by usage and practice, such that the contract is understood to encompass it even without express stipulation, is deemed equivalent to being stated in the contract.

Source: Property Litigation, by Hossein Eghdami.

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