[Direct answer]In the Beijing area, taking online judicial auctions as an example, according to Article 26 of the "Regulations of the Supreme People's Court on Several Issues Concerning Online Judicial Auctions of People's Courts" (effective January 1, 2017), the starting price shall be determined by the people's court with reference to the appraisal price; where no appraisal has been conducted, it shall be determined with reference to the market price and the opinions of the parties shall be solicited; the starting price shall not be lower than 70% of the appraisal price or the market price. In traditional consignment auctions, the corresponding concept is the reserve price, which is usually determined by the people's court with reference to the appraisal price, and where no appraisal has been conducted, it shall be determined with reference to the market price and the opinions of the parties shall be solicited. It should be noted that the starting price and the transaction price are not the same. If no bid is made or the bid is lower than the reserve price, the auction will be declared a failure; the reserve price may be reduced appropriately in the next auction, but the amount of each reduction shall not exceed 20% of the previous reserve price. If the parties have objections to the starting price, they may file a complaint with the executing court in accordance with the law.

1. Problem background and typical scenarios

In judicial auctions, the starting price directly affects the likelihood of the property being sold and the interests of all parties involved: a starting price that is too high may lead to multiple failed auctions and delayed enforcement; a starting price that is too low may harm the interests of debtors and other creditors. In practice, parties often struggle with the relationship between the starting price and the appraisal price, whether a discount must be applied based on the appraisal price, and the differences between online judicial auctions and traditional auctions. When handling such cases in the Beijing area, the court will review whether the appraisal process is standard and whether the determination of the starting price complies with regulations. For pricing that is obviously deviating from the market, parties have the right to raise objections. Understanding the rules for determining the starting price can help creditors and debtors reasonably predict the auction outcome and exercise their right to raise objections in a timely manner.

II. Key points of contention

First, the relationship between the starting price and the reserve price. Second, the applicable order of the appraisal price and the market price, and the requirement of consulting the parties' opinions. Third, the specific meaning of the lower limit of not less than 70%. Fourth, the reduction range of the reserve price in the re-auction. Fifth, the channels and time limits for parties to raise objections to the starting price.

III. Professional analysis by Henglue Lawyers

When handling enforcement-related cases, Henglue Lawyers found that the determination of the starting price is often one of the focuses of disputes. Common problems include: the selection of appraisal institutions without sufficient consultation, the appraisal report using an appraisal time point that is too far from the actual disposition time, resulting in price distortion, and not consulting the parties when directly referring to the market price for unappraised property. The above situations may all affect the reasonableness of the starting price, and in turn, affect the auction results. Based on the experience of our team, parties should actively intervene in the appraisal and pricing stages: first, check the appraisal time point, method, and basis of the appraisal report; second, for unappraised property, require the court to refer to the market price and consult the parties; third, pay attention to whether the starting price is lower than the statutory lower limit of 70% of the appraisal price or market price; fourth, for obviously unreasonable starting prices, promptly raise objections in writing and provide market price evidence. It should be noted that it is a common practice for the starting price to be lower than the appraisal price, and it is not necessarily illegal as long as it does not fall below the statutory lower limit. If parties believe that their interests have been damaged, they should claim through legal means rather than refusing enforcement on this basis. The specific outcome must be determined based on the facts of the case and the current effective laws and regulations.

IV. Practical suggestions and legal basis

Action list: First, check whether the property has been evaluated and whether the evaluation report's timing and method are reasonable; Second, if the property has not been evaluated, require the court to determine the starting price based on the market price and consult the parties' opinions; Third, check whether the starting price is lower than 70% of the evaluation price or the market price; Fourth, collect the market transaction prices of similar properties as the basis for objections; Fifth, if there are objections to the starting price, submit written objections to the executing court in a timely manner and follow up within the time limit. For matters involving creditor's rights and debts and enforcement, reference can be made to the relevant provisions.Creditor's rights and debts, and enforcementAndSpecial servicesLegal basis: Article 26 of the "Regulations of the Supreme People's Court on Several Issues Concerning Online Judicial Auctions by People's Courts" (effective January 1, 2017), and the provisions on the reserve price and the price reduction range for the second auction in the "Regulations of the Supreme People's Court on Auctioning and Selling Property in Civil Enforcement by People's Courts" (amended in 2020). The specific application shall be subject to the currently effective laws, regulations, and judicial rulings.

5. Henglue Law Firm's Reminder

Firstly, the starting price shall be determined based on the appraisal price or market price, and shall not be lower than 70% of the latter for the first time. Secondly, it is a common phenomenon that the starting price is lower than the appraisal price, which is not necessarily illegal. The key is whether it is lower than the statutory lower limit. Thirdly, the price reduction in the re-auction shall not exceed 20% of the previous reserve price. Fourthly, if there are objections to the starting price, they shall be raised within the statutory time limit and accompanied by evidence of the market price. In cases involving creditor's rights and debts and enforcement, the parties concerned may resolve the disputes through mediation or litigation.Creditor's rights and debts, and enforcementYou can refer to it when obtaining a comprehensive solution for services involving real estate price evaluation.Property transactions and construction projectsFor matters involving the disposal of a company's assets and equity, the two parties can cooperate on them together.Business and contract disputes in enterprisesFor matters involving financial creditor's rights and security rights, you can seek advice from usFinancial and cross-border affairs.

VI. Frequently Asked Questions

Q1: How is the starting price for judicial auctions generally set?

In online judicial auctions, the starting price is determined by the people's court in accordance with the appraised value; if no appraisal has been conducted, the starting price shall be determined in accordance with the market price, and the opinions of the parties shall be solicited; the starting price shall not be lower than 70% of the appraised value or the market price. In traditional consignment auctions, the corresponding concept is the reserve price, and the determination method is basically the same.

Q2: Can the starting price be lower than the appraised value?

Yes. It's a common practice for the starting price to be lower than the appraisal price, as long as it's not lower than the appraisal price or 70% of the market price. If it's significantly lower than the lower limit or there are violations of the appraisal procedures, the parties concerned may raise objections in accordance with the law.

Q3: How to determine the starting price for a property that hasn't been appraised?

For those that have not been evaluated, the market price shall be determined as a reference and the parties' opinions shall be solicited. In practice, the recent transaction prices and listing prices of similar properties can be referred to for determination, but the parties should be given the opportunity to express their opinions to avoid unilateral pricing that harms the interests of the relevant parties.

Q4: How to raise objections to the starting price?

Written objections may be submitted to the executing court, stating the reasons and attaching materials such as market price evidence and similar transaction records. The court shall review and make a ruling according to law. If the party is dissatisfied with the ruling, he/she may also apply for a review or seek further remedies in accordance with the relevant provisions of the Civil Procedure Law.

Q5: What is the relationship between the deposit and the starting bid price?

In online judicial auctions, bidders need to pay a deposit to participate in the bidding. The amount of the deposit is determined by the court within a certain percentage of the starting price. After the auction is completed, the deposit can be used as part of the payment. If the auction is unsuccessful, the deposit will be refunded according to the rules. However, the deposit paid by a bidder who withdraws from the auction may not be refunded.

The above Q&A is mainly based on judicial practices in the Beijing area. There may be differences in the interpretation of the law in different regions. It is recommended to consult a professional lawyer based on the specific circumstances of the case.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, so as to avoid missing the statutory time limit. →Legal services for creditor-debtor disputes·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and publicly available adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. In the event of a dispute, please consult a practicing lawyer in a timely manner.