Costs after Judicial Administration: Administrator Fee, Income and Accounting

The costs of judicial administration contain legally different items. The administrator’s fee follows from section 113 of the Austrian Enforcement Code. Running expenses connected with administration and ordinary economic use are paid directly from the administration income under section 120. Remaining surpluses are distributed under sections 122 to 126. The account should show these levels separately.

Section 119 includes the debtor’s uses and income from the property that are not exempt from enforcement. It expressly covers, among other things, fruits obtained after the annotation of judicial administration, fruits already separated and located on the property, income already due but unpaid, and income falling due after the annotation. The account should record when each claim arose, when it became due and whether the administration covers it.

This distinction keeps private payments, third-party claims and income transferred before the annotation out of the administration account. A clear opening balance and document list are the foundation for the review. The file check can help organise the relevant orders and payment records.

Section 113(1) gives the administrator a claim to remuneration plus value added tax and reimbursement of cash expenses. The remuneration is assessed according to the scope, difficulty and care of the administration. It is generally at least 500 euros. This statutory rule does not by itself determine the final amount in every case.

For property used through letting or leasing, section 113(2) states that remuneration is generally 10 percent of the gross amount of rents or leases collected, with a minimum of 500 euros. The provision refers to the amount collected. A mere invoice, an outstanding rent claim or an unverified target balance does not prove actual collection.

The review should therefore cover the administration period, leases, incoming payments, arrears, vacancies and special management measures. The account should list remuneration, value added tax and cash expenses as separate items. In a mixed-use property or a particularly demanding administration, the work performed should be described precisely.

Under section 120(1), the administrator pays expenses connected with administration and ordinary economic use directly from the income. Section 120(2) includes, among other items, certain taxes and public charges, insurance payments, labour income in specified agricultural or forestry settings, costs of the administration and costs of preserving or necessarily improving the property.

The provision also covers certain recurring payments arising from undisputed claims and rights secured on the property. Under section 120(3), direct payment is permitted only to the extent that the relevant right unquestionably has priority over the enforcing creditor’s satisfaction right. The account must therefore show the property connection and the basis for priority.

Section 121 sets the order within these payments. Necessary preservation and operating expenses come before arrears or current taxes and public charges. For other payments under section 120(2)(5), the order shown by the land register or the record of the pledge description is decisive. Calling an item an operating cost is not enough where its classification is disputed.

Section 122 excludes expenses already paid under section 120 from a second distribution. The remainder is the surplus income. As a rule, it is distributed after each administration account has been dealt with. The court may permit an interim distribution where sufficient funds are available. It may also postpone a separate hearing for minor annual surpluses where the creditors’ rights are not harmed.

Section 124 places the administrator’s remuneration and reimbursement of cash expenses first among claims paid from the surplus, unless advances already cover them. Certain taxes and recurring payments follow under the statutory conditions. Section 126 directs any remaining amount first to recurring payments ranking behind the enforcing creditor. Only the balance left afterwards is allocated to the debtor.

The account should distinguish income, directly paid expenses, advances, remuneration, value added tax, other eligible claims and the balance. This makes clear whether an amount has already been paid from current income or still has to be considered in distribution.

A reviewable account starts with the period and opening balance. Each receipt should show the date, payer, purpose, unit or area concerned and the incoming payment. For rents and leases, separate the agreed amount, amount collected, arrears and deposits. Deposits have a distinct legal purpose and should be recorded separately from ordinary income.

Each expense document should show the service provided for the administered property. Preservation works, insurance, charges, advances and administration costs belong in separate categories. Necessary improvements should be explained. Larger measures require the underlying instruction, invoice and payment record.

The opening balance, total income, total expenditure and closing balance must reconcile. The document checklist is useful where several rental units, arrears or payments through a separate account are involved. If an entry is unclear, compare it with the court file and payment record.

Priority determines which claim is considered from a surplus. Section 124 follows the order established by sections 120 and 121. Section 127 generally requires creditors to register their claims for distribution. The claim for which the administration was ordered is included ex officio. The registration must state the amount claimed from the surplus.

A claim may therefore exist economically and still be left out of the distribution if it is not registered correctly or supported sufficiently. Each item should be linked to its amount, period, legal basis and priority evidence. The creditor matrix helps keep claims and priority documents separate.

When the administration ends, check whether the order has become final. Under section 130, finality restores the debtor’s power to manage and collect the income. The court orders the annotation removed and directs the administrator to hand over the property and submit the final account.

Section 129 provides for termination, among other cases, where all claims and ancillary charges for which administration was ordered have been paid. Termination may also follow where special costs cannot be met from the property income and the enforcing creditor does not advance the required amount. The provision also addresses situations where income cannot be expected within a year or does not cover at least 25 percent of the current interest on the enforced capital.

The parties and administrator are heard before termination. Once the order is final, the handover should be documented. Section 130 requires a final account. A balance shown by that account is returned to the debtor unless the enforcing creditor, with the debtor’s consent, requests another treatment.

The handover should identify administration documents, outstanding claims, deposit balances, continuing contracts and the account balance. Whether a particular payment belongs to the period before or after termination depends on when the claim arose and fell due and on the court order. Those dates should be visible in the final account.

A common error is calculating the fee from rents invoiced instead of rents collected. Section 113(2) uses the gross amount collected for its usual assessment. Arrears should therefore be shown as outstanding claims and not treated as receipts without proof of payment.

Another error is combining taxes, preservation, improvement and remuneration in one line called running costs. This makes it impossible to see which rule under section 120 applies and whether section 121 gives an item priority. Each major expense needs a traceable connection to the property and proof of payment.

A third error is failing to distinguish an advance from the final claim. Section 124(1) gives priority to remuneration and cash expenses only to the extent that advances have not already covered them. A surplus should be distributed only after the account, registration and priority review are complete. A specific court order remains decisive for the individual case.