The Professional Bailiffs Association has welcomed the newly gazetted Ministerial Order establishing electronic modalities regarding managing, leasing, auctioning, or takeover of property in the event of client default.

The order, which was gazetted on Tuesday May 12, is aimed at reducing the human element in the auctioning process thereby tackling corruption and undervaluation of auctioned properties.

Speaking to The New Times in a telephone interview, the association Executive Secretary Anastase Balinda said that taking the entire process online will make their work more efficient.

He said that over the years, some of their members have been linked to corruption in the process of executing court rulings through auction, which he said will be difficult under the new system.

Court bailiffs take oath of office on June 21, 2016. Photo: File.

"This is going to be very helpful. The use of Information Technology brings the incidence of illegalities in these processes down to almost zero. If everyone is auctioning from wherever they are, it is hard for people to come together and connive as has been common with the involvement of human contact,” he said.

Addressing journalists on the new development, the Registrar General Richard Kayibanda said that since 2009, Rwanda has continuously worked on tweaking reforms aimed at easing Doing Business, incorporating IT into all sectors.

The Registrar General is under Rwanda Development Board.

Kayibanda explained that the changes will also seek to cut on the money and time lost as financial institutions pursue court authorisation to sell off the borrower’s property to recoup their money when the latter defaults on his or her loan.

This he explained frustrated both parties, with trials and appeals dragging on for long periods of time.

"This has changed. The difference now is that should the client fail to pay, the institution will not be required to go to court. Instead, the institution will be requesting authorisation from the Registrar General,” he said.

An enforcement order is an order by a court to force a person or organisation to comply with a regulation of law.

How it will work

A person residing in Rwanda or abroad, who intends to bid for the property with reference price equal to or more than Rwf5 million pays a refundable bid security of five percent (5%) of the reference price of the property.

Article 5 of the Ministerial Order stipulates that interested bidders enter offer prices through the electronic system where they are kept confidentially.

Six hours before the hour auction, the prices are disclosed, again through the electronic system and also submitted by email to both the bailiff and each bidder.

According to the Head of the Access to Justice Services in the Ministry of Justice, Martine Urujeni, this fee will help weed out ‘mafia rings’ formed by some brokers to frustrate prices.

"This fee is deposited onto the bank account specified by the Ministry of Justice and is refunded if the bidder is not awarded the property in question within three working days,” she explained.

Urujeni explained that should the successful bidder pay the price within the time limits specified by law, he or she deducts the bid security from the price to be paid.

However, if the successful bidder fails to pay within the time limits specified by law, the bid security is deposited onto the Public Treasury and is responsible for loss as provided for by relevant laws.

If the electronic system is inoperative at the time of opening of the auction and the prices have already been disclosed, the bailiff proceeds with the formalities of the auction with the prices disclosed. This is recorded in the written statement to be posted on the electronic system of execution of enforcement orders when it restarts operating.

If on the time of opening of the auction the prices are not yet disclosed through the electronic system of execution of enforcement orders, the auction is adjourned and the prices submitted become invalid.

In August 2018, Rwanda Investigation Bureau (RIB) paraded individuals accused of being members of a network of dishonest auctioneers and business people involved in fraudulent auctioning practices.

The two suspects were accused of having received payments so they can pretend to be bidders at a public auction in Kigali City’s Kicukiro area where a petrol station valued at Rwf850 million was bought at Rwf330 million.