What do the 5/10 and 7/10 thresholds mean for the award?

If the highest bid is below half of the market value, the court must refuse the award ex officio (5/10 threshold). If it is below seven tenths, a creditor whose claim would then not be covered can prevent the award (7/10 threshold). If the award was refused on one of these grounds, neither threshold applies at the new hearing any more. A second hearing alone is not enough for that.

Are bids below 50 percent of the market value allowed?

You may generally bid from the lowest admissible bid (geringstes Gebot), which covers the costs of the proceedings and the rights that remain in place (§ 44 ZVG), so often well below 50%. The thresholds only apply when the court decides on the award. Below 50%, the court refuses the award ex officio, unless it was already refused once on a threshold ground.

Do the thresholds still apply at a second hearing?

That depends on the first hearing. If the award was refused there because of the 5/10 or 7/10 threshold, it may not be refused on either of these grounds again at the new hearing (§ 85a (2) and § 74a (4) ZVG). If there were no bids or the hearing was cancelled, both thresholds continue to apply. The court's official announcement is authoritative.

5/10 and 7/10 thresholds in compulsory auctions

Around compulsory auctions you constantly hear about the "5/10" and "7/10" thresholds. First, something important: these thresholds do not say from when you are allowed to bid – you can almost always bid much earlier. They decide whether the court grants the award (Zuschlag).

The five-tenths threshold (50%) – protection for the debtor

If the highest bid at the first hearing does not reach half (50%) of the market value, the court must refuse the award ex officio (§ 85a (1) ZVG). A bid below that is therefore worthless at the first hearing – the award would not come about.

The seven-tenths threshold (70%) – protection for the creditor

If the highest bid lies between 50% and 70% of the market value, a creditor who is not fully covered (usually the bank pursuing the enforcement) may apply for refusal of the award (§ 74a (1) ZVG). This does not happen automatically: if no one files the motion, the award can also be granted at, for example, 60%.

From 70%, none of these value thresholds stands in the way any longer.

Important: both thresholds count not only the cash highest bid, but also the capital value of the rights that remain in place under the conditions of sale.

The new hearing after refusal on a value-threshold ground

If the award is refused on the five-tenths or seven-tenths ground, the court schedules a new hearing. At that hearing the award may not be refused again on either of these value-threshold grounds (§ 85a (2) and § 74a (4) ZVG). An award is then possible even below 50% or 70%.

A second hearing alone is not enough. If, for example, no bids were made previously or the hearing was cancelled, the thresholds do not lapse on that basis. What matters is the prior refusal of the award on one of these grounds. Check the official announcement and ask the responsible court if anything is unclear.

A low award is nevertheless not an automatic bargain. What remains decisive is whether the condition, the rights and the data situation are right; the risk classes help you sort through such warning signs more quickly before you bid.

Bidding is not the award

In principle you may join the bidding from the lowest admissible bid onwards (which covers the costs of proceedings and the rights that remain in place, § 44 ZVG) – often well below 50%. The value thresholds only take effect at the award decision; how the auction hearing itself proceeds is set out in its own guide. Where your personal upper limit lies, by contrast, is determined not by the court but by your bank.

In brief

Below 50%: first hearing – the award is refused ex officio.
50–70%: the award is possible, but a creditor can overturn it.
From 70%: These value thresholds do not prevent the award. Other grounds for refusal remain possible.
New hearing: Both thresholds lapse only after refusal of the award on one of these value-threshold grounds; a second hearing alone is not enough.

Note: General orientation, not legal advice.

The five-tenths and seven-tenths thresholds explained simply

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