Undervalued Property: When an Appraisal Must Be Challenged

In enforcement proceedings, debtors often begin actively defending their rights only after the property has been sold and the final sale price becomes known. However, proving that the property was sold too cheaply is not, in itself, sufficient to recover the asset. The Supreme Court confirmed this approach in its ruling of 22 September 2026 in case No. 908/3958/25.

The debtor owned a 13/25 share of non-residential premises in Zaporizhzhia. As part of the enforcement proceedings, the property was valued at UAH 3.78 million excluding VAT. After the first auction failed to take place, the property was sold at a repeat auction for UAH 4.41 million. Following the sale, the debtor attempted to prove that the property had been significantly undervalued. To support this position, it submitted several alternative valuations: a UAH 6.1 million valuation from another enforcement proceeding, an appraiser's opinion estimating the property at UAH 12.09 million, and a certificate from the State Property Fund of Ukraine indicating a value of UAH 18.84 million.

However, the main problem was not the amount of evidence concerning the property's value, but the point at which the debtor attempted to use it.

Property Valuation Has Its Own Challenge Procedure

Part 5 of Article 57 of the Law of Ukraine "On Enforcement Proceedings" provides that the results of determining the value or appraisal of property may be challenged in court within 10 days from the date of receipt of the relevant notification. The debtor did not challenge, in accordance with the prescribed procedure, the valuation on the basis of which the property was transferred for sale.

The Supreme Court emphasized that violations which may have occurred before an electronic auction — including those related to determining the value of the property — are subject to a separate challenge procedure. A claim seeking to invalidate an auction that has already taken place cannot be used as a means of effectively returning to previous stages of the enforcement proceedings.

Otherwise, the special time limits for challenging enforcement actions would lose their purpose, while the results of public auctions could remain subject to potential review indefinitely.

A Difference in Value Does Not Prove a Violation by Itself

Even more important is the Supreme Court's conclusion regarding alternative valuations.

The mere fact that another appraiser determines a significantly higher market value for the property does not automatically render the auction invalid. The debtor must prove not merely the existence of another possible valuation, but that the appraisal was conducted in violation of the law, that the violation was material, that it affected the outcome of the auction, and that the debtor's rights were infringed as a result.

This is why even the substantial difference between the various figures did not help the debtor in this case. The valuation report from another enforcement proceeding related to a different procedure, the private appraiser's opinion was treated by the court merely as the claimant's position regarding the possible value of the property, while the figure contained in the State

Property Fund certificate was not considered equivalent to the property's market value.

The Asset Must Be Protected Before the Auction

The practical significance of this position extends beyond the circumstances of this particular case. If a debtor disagrees with the value of the property determined in enforcement proceedings, the crucial stage for protecting its rights is the valuation stage, not the point at which the purchaser has already paid for and acquired the property. Once the auction has taken place, the burden of proof becomes considerably more difficult. The debtor must establish not only that the previous valuation was incorrect, but also that there was a material procedural violation, that it affected the outcome of the auction, and that the claimant's rights were infringed.

A passive approach during enforcement proceedings therefore creates a separate risk for the debtor: the right to challenge a particular action may exist, but the ability to exercise that right effectively is limited by a specific time period and procedural stage.

In disputes concerning the forced sale of property, this leads to a straightforward rule: if there are grounds to believe that the property has been undervalued, action must be taken before the asset is sold. Once the auction has been completed, even a convincing alternative valuation may prove to be evidence submitted too late.

Based on an analysis of the Supreme Court ruling of 22 September 2026 in case No. 908/3958/25