How you can lose an apartment without signing anything: a fake ID card and state liability

Imagine that you have an apartment in Batumi. You rarely visit Georgia, a handyman takes care of the apartment, the property is registered in your name in the Public Registry, and, as you think, it is fully protected. One day, you find a letter attached to the apartment door. The letter is from a bank, and it asks a completely unknown person to fulfill a loan obligation. Only then does it become clear that your apartment has not belonged to you for several months.

This is not a hypothetical scenario. Our office is currently working on such a case, and a lawsuit has been filed with the Administrative Cases Collegium of the Tbilisi City Court.

How events unfolded

According to information received from the Public Registry, everything started with an insignificant action. On May 20, 2024, a third party applied to the Registry with a request to update the apartment's extract. This is a standard procedure and does not raise suspicion in anyone. However, three days later, on May 23, a sales contract was already signed with a notary. According to the contract, the owner sold the apartment for 50,000 USD.

In reality, the owner was not with the notary. Instead, a person who has not yet been identified by the investigation appeared, holding an ID card with the owner's real personal data, but with another person's photograph. The Registry registered this transaction.

In the next stage, the scheme developed quickly. On June 12, the new "owner" mortgaged the apartment in favor of a bank. On the same day, in about an hour, the already mortgaged apartment was sold to a third party, who concluded the transaction through a representative. The Registry registered both changes. In fact, in three weeks, the apartment was alienated twice and mortgaged, while the real owner knew nothing about it.

Two ID cards, two different photos

The most alarming circumstance in the case is that the fake document, it seems, was not created outside the state system. Before that, money was deducted from our client's bank account. While clarifying this fact, it turned out that the Public Service Development Agency had issued two ID cards in their name, with two different photographs. The client's family officially applied to the Agency but received a vague response. We have applied to the Agency twice to request the materials of the administrative proceedings, and both times they provided us with incomplete information.

At the same time, the client does not know the Georgian language, does not know any of the persons participating in the transaction, and has never had any contact with them. An investigation is ongoing in parallel regarding the case. The client has already been interrogated accompanied by a lawyer, and statements have been submitted both to the General Prosecutor's Office and the Batumi Main Division.

What we are asking from the court

The lawsuit concerns two respondents: the National Agency of Public Registry and the Public Service Development Agency.

The first claim is to invalidate three decisions of the Public Registry. These are the decisions regarding the registration of a fraudulent sale, a mortgage, and a second sale. A decision on registration is an individual administrative-legal act and, therefore, the court can verify its legality.

The second claim is for compensation for material damage in the amount of 450,000 GEL. The basis for this claim is that the damage occurred as a result of the actions of two state agencies: one issued a forged certificate, and the other registered the transfer of ownership based on this certificate.

Legal grounds

  • Article 19 of the Constitution of Georgia: Inviolability of the right to property;
  • Article 8, Paragraph 3 of the Law "On Public Registry": The authority of the Registry to additionally request a document or information;
  • Article 21, Subparagraph "b" of the Law "On Public Registry": Grounds for suspension of registration proceedings;
  • Article 27, Paragraph 1 of the Law "On Public Registry": The nature of a registration decision;
  • Article 2, Subparagraph "d" of the General Administrative Code: The concept of an individual administrative-legal act;
  • Article 53, Part 5 of the General Administrative Code: An act must not be based on uninvestigated circumstances;
  • Article 96, Part 2 of the General Administrative Code: The obligation to investigate circumstances;
  • Article 60¹ of the General Administrative Code: Invalidity of an administrative act.

The essence of our position is simple. The Public Registry is not just a technical body that automatically processes documents. Together with other public institutions, it serves to enforce the constitutional guarantee of property. When it is decided whether a person's ownership of real estate will be terminated, the Registry is required to meet a high standard of investigation of circumstances. If the photo placed on the certificate does not belong to the real owner, this is precisely the case where the proceedings should be suspended and additionally verified. Instead, the owner lost the property without ever having expressed the will to alienate it.

What every property owner should know

This case demonstrates that even property registered in the registry can turn out to be vulnerable, especially when the owner lives abroad and rarely checks the property. Therefore, we recommend a few simple steps:

  • Periodically check the extract for your property on the Public Registry website;
  • Use the registry's notification service so that you are informed as soon as any application is filed regarding your property;
  • If you discover an unknown transaction from your account or suspect misuse of a document, immediately contact the Public Service Development Agency and request information about all documents issued in your name;
  • As soon as fraud is discovered, contact a lawyer. There are deadlines for appealing an administrative act, and the property may be alienated several times and end up in the hands of a bona fide purchaser. In such a case, recovery becomes much more difficult.

Losing property through a forged document is not just a criminal matter. It is also a matter of state responsibility, because it is the state's duty to verify who is selling what to whom. We will keep you updated on the further development of the case on our blog.

Pkhaladze & Partners | Pkhaladze et Associés

www.pkhaladze-law.ge | +995 597 117 795