Rwanda’s digital bidding platform to enhance transparency in property auctions




Rwanda’s Ministry of Justice, in partnership with the Rwanda Development Board (RDB), have launched a digital bidding platform that is aimed at making the enforcement of orders more efficient and transparent.

The platform, accessible online, will reduce the processes involved in the enforcement of orders and curtail malpractices occasioned by human interaction. Additionally, the platform is aimed to make it possible for potential bidders outside the country to participate in the auction exercise.

Speaking at the launch, Johnston Busingye, the country’s Minister of Justice and Attorney General, hailed the platform as a long-term solution to the challenges faced in the execution of enforcement orders.

“I would like to commend RDB and other partners for working closely with the Ministry of Justice to effect change in the execution of enforcement orders, from a manual to an electronic system that is in line with the Government’s vision of digitalizing all its services,” Busingye said.

Clare Akamanzi, the CEO of RDB, said that over the last 10 years, Rwanda has implemented focused reforms aimed at improving the doing business environment for the private sector to thrive.

“Private sector contribution to the economic development of Rwanda is primary. We cannot talk about development without developing the private sector; activities such as this help the private sector to thrive in our economy. The net outcome of the electronic system is to improve the quality of auctions and recovery rate. We hope that this system will help banks and the private sector in general to thrive,” said Akamanzi.

The new Registrar General instructions on Management, Lease, Auction, and Take-over of mortgages, in addition to electronic auctioning of collateral, also provide for a bid deposit to ensure that only genuine bidders participate in the auction. The instructions also provide for a possibility for the property owner to object to the price if it is less than 75% at the first and second rounds of auction.

The online bidding platform is the culmination of the Ministerial Order Relating to the Electronic Execution of Enforcement Orders which came into force on May 12, 2020.

The Ministerial Order determines the organisation, management and the use of electronic system of execution of enforcement orders. It also determines the procedure used in case the electronic system fails to operate.

The electronic system, managed by the Ministry of Justice, is organised in such a way that the whole process related to execution of enforcement orders is done electronically. The Minister of Justice however has the discretion to assign the responsibility of managing the electronic system to another State Organ or competent private entity.

The enforcement orders and documents relating to their execution are published in electronic system of execution of enforcement orders.

The bidders offer prices through the electronic system of execution of enforcement orders while the offered prices are confidentially kept in the electronic system. The prices are disclosed through the electronic system of execution of enforcement orders only 6 hours before the hour declared in the notice of auction and also submitted by email to both the bailiff and each bidder.

According to the order, a person residing in Rwanda or abroad who intends to bid for property with a reference
price equal to or more than FRW 5 million ($5,000) pays a refundable bid security of 5 per cent of the reference price of the property, communicated in notice of auction.

The bid security consists in a sum of money deposited onto the bank account specified by the Minister of Justice, the delivery of a cheque drawn by the bidder, a bid guarantee provided by a bank or another accredited financial institution.

For accountability, when the auction ends, the bid security provided is returned to the bidder within 3 working days from the time of the bidder’s demand. In cases where the successful bidder pays the price within the legally specified time frame, the bidder deducts the bid security from the price to be paid. However, should the winning bidder fail to pay within the specified time frame, the bid security is deposited onto the Public Treasury and is responsible for loss as provided for by relevant laws.

Should the electronic system be inoperative at the time of opening of the auction and the prices have already been disclosed, the bailiff proceeds with the formalities of the auction with the prices disclosed. This is recorded in the written statement to be posted on the electronic system when it restarts operating.

If on the time of opening of the auction the prices are not yet disclosed through the electronic system, the auction is adjourned and the prices submitted declared invalid. When the auction is resumed, the bidder who had already deposited a bid security and who still intends to bid again does not deposit any other bid security.

Should the bidder wish not to bid anymore, the bid security is returned to him or her within 3 working days from the time of the bidder’s demand.

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