[Direct answer]In the Beijing area, according to the "Regulations of the Supreme People's Court on Auction and Sale of Property in Civil Enforcement of the People's Court" (amended in 2020), if no one bids at the auction or the highest bid of the bidders is lower than the reserve price, it constitutes an unsuccessful auction. After the first auction fails, the auction shall be held again within 60 days, and the reserve price of the second auction may be reduced appropriately, but the amount of each reduction shall not exceed 20% of the previous reserve price. The same depreciation rules apply to online judicial auctions. The starting price of the second auction is usually reduced on the basis of the first auction, with a reduction of no more than 20%. It should be noted that the depreciation rate is an upper limit rather than a fixed rate. Whether to reduce the price and by how much shall be determined by the people's court according to the property situation and market response. At the same time, the applicant for enforcement or other enforcement creditors may apply to accept the property as a debt repayment at the reserve price of the second auction.

I. Problem background and typical scenarios

A failed auction is a common phenomenon in judicial auctions, especially when the real estate market is sluggish or the auctioned assets are particularly unique. How to handle a failed auction, how much to reduce the price, and when to auction again directly affect the progress of creditor's rights realization and the value of property disposal. In practice, creditors hope to realize their assets as soon as possible, debtors worry about the loss caused by a too low price, and buyers are also concerned about the price and timing of the next auction. When handling such cases in Beijing, the court will determine the time and price reduction range for the next auction according to regulations after a failed auction, and ensure the right to information and participation of parties and priority purchasers. Understanding the price reduction rules and the deadline for the next auction can help all parties reasonably arrange their expectations and actions.

II. Key points of contention

First, the identification criteria and legal consequences of a failed auction. Second, the time requirements for a repeat auction. Third, the upper limit and determination method of the price reduction. Fourth, whether the applicant for enforcement can accept the property as debt repayment at the reserve price. Fifth, whether a failed auction affects the exercise of the rights of the priority purchasers.

III. Professional analysis by Henglue Lawyers

Henglue Lawyers believe that the handling of failed auctions is an important node in the enforcement process, which not only relates to the efficiency of creditor's rights realization, but also to the protection of the property value of the debtor. In practice, common disputes include: the court failing to conduct a re-auction within the statutory time limit, resulting in property depreciation; the price reduction exceeding the statutory limit; failure to re-announce or notify the priority purchasers; and the applicant for enforcement using the reserved price to offset the debt without legally handling the interests of other creditors. Based on the experience of our team in handling enforcement cases, parties should pay attention to three aspects: first, confirm whether it is a legally recognized failed auction to avoid being misjudged due to procedural defects; second, check whether the reserved price and the price reduction of the re-auction are within 20%; third, if the applicant for enforcement intends to use the property to offset the debt, they should pay attention to the price of the debt offset, the handling of the remaining creditor's rights, and the priority interests of other creditors. The above matters can all be claimed through written objections, reconsideration, etc. It should be noted that the specific application of the price reduction shall be combined with the type of property, market conditions, and the court's discretion, and shall be subject to the current effective laws, regulations, and judicial rulings.

IV. Practical suggestions and legal basis

Action list: First, pay attention to whether the re-auction is initiated within the statutory time limit after the failed auction; Second, check whether the reduction of the reserve price for the re-auction exceeds 20% of the previous reserve price; Third, pay attention to the announcements and notifications of the re-auction to ensure that the right of first refusal can be exercised; Fourth, if the applicant for enforcement intends to use the property to offset the debt, timely calculate the price of the offset and the remaining creditor's rights; Fifth, if there are objections to the price reduction or the re-auction process, file a lawsuit against the enforcement court according to law. For matters related to creditor's rights, debts, and enforcement, you can refer to the relevant provisions of the Civil Procedure Law of the People's Republic of China and other laws and regulations.Creditor's rights and debts, and enforcementAndSpecial servicesLegal basis: The "Provisions of the Supreme People's Court on Auction and Sale of Property in Civil Enforcement by People's Courts" (amended in 2020) regarding the determination of failed auctions, the time limit for re-auctions, and the price reduction range; the relevant provisions of the "Provisions of the Supreme People's Court on Several Issues Concerning Online Judicial Auctions by People's Courts" (implemented on January 1, 2017). The specific application shall be subject to the currently effective laws, regulations, and judicial rulings.

5. Henglu Law Firm's Reminder

First, the maximum discount allowed is 20% of the previous reserve price, which is a cap rather than a fixed ratio. Second, after the auction fails, a re-auction should be held, and there are time limits for the re-auction. Delays may harm the value of the property. Third, the re-auction also requires legal announcements and notifications to priority purchasers. Fourth, the applicant for enforcement may accept the property as a debt repayment at the reserve price if eligible. For matters involving creditor's rights and debts and enforcement, they can be resolved through legal means.Creditor's rights and debts, and enforcementThe service provides a comprehensive solution, which includes real estate disposal and market reference informationReal estate transactions and construction projectsFor transactions involving the realization of a company's assets and equity, the following methods can be considered:Business and contract disputes in enterprisesFor matters involving financial claims and guarantees, please feel free to consult us.Financial and cross-border affairs.

VI. Frequently Asked Questions

Q1: How much can the price be reduced after the first failed auction?

According to the "Regulations of the Supreme People's Court on Auction and Sale of Property in Civil Enforcement by People's Courts" (amended in 2020), the reserve price for the second auction may be reduced as appropriate, but the amount of each reduction shall not exceed 20% of the previous reserve price. Whether to reduce the reserve price and by how much shall be determined by the people's court based on the actual situation.

Q2: How long will it be before the next auction after the failed auction?

After the first auction fails, another auction shall be held within 60 days. The second auction also requires prior announcement in accordance with the law and notification to the parties and the known priority purchasers. If the auction is not held again within the time limit, the parties may report the matter to the executing court.

Q3: Can the price reduction exceed 20%?

Generally, this is not allowed. The amount of each reduction shall not exceed 20% of the previous reserve price, which is the statutory limit. If the auction is still unsuccessful after the second attempt, the items shall be sold at a fixed price or used to offset debts in accordance with the relevant regulations in the subsequent procedures, rather than being subject to unlimited price reductions.

Q4: Can creditors claim the house after the auction fails?

Yes. If no one bids at the auction or the highest bid is lower than the reserve price, and the applicant for enforcement or other enforcement creditors present at the auction apply for or agree to accept the auctioned property at the reserve price set at that auction, they shall transfer the property to them to offset the debt, and the specific handling shall be in accordance with the provisions of the judicial interpretation.

Q5: What impact does a failed auction have on the debtor?

A failed auction may prolong the execution cycle and result in the property being sold at a lower price in subsequent discounted auctions, thereby affecting the amount of debt repayment; however, a failed auction itself does not lead to the elimination or increase of debt, and the debt repayment situation will ultimately be determined by auction, sale, or debt settlement with assets.

The above content is based on the compilation of judicial practices in the Beijing area. The facts of individual cases and the jurisdiction of the court may affect the conclusions. Welcome to consult Henglu Law Firm for specific situations.

If you are currently facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant evidence materials to avoid missing the statutory time limits.\nLegal services for creditor-debtor disputes·Beijing Henglue Law Firm

Disclaimer: This article is compiled based on the current 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.