How we saved a client from losing their apartment — 73,000 GEL in property benefit in 10 days
Case background
Our client had a loan obligation of 103,000 GEL to a bank. The loan was secured by a mortgage registered on 1/2 share of their apartment.
Due to the inability to repay the debt, the 1/2 share of the apartment was put up for auction during enforcement proceedings and was purchased by a private lender for just 19,400 GEL — that is, approximately 19% of the market value of that share.
Afterward, the new co-owner contacted our client and demanded 70,000 GEL in exchange for buying back the same 1/2 share — an amount 3.6 times higher than the price they had paid.
What risk was the client facing
In case of refusal to meet the demand, the new co-owner could have applied to the court with a request to terminate the shared ownership right. Since the division of a residential apartment in kind is, as a rule, practically impossible, the typical result of such a dispute is the sale of the entire apartment at auction and the distribution of the proceeds in proportion to the shares.
The market value of the apartment was 206,000 GEL, although property at auction is usually sold much cheaper than the market price — which this case clearly demonstrated.
What we did
Immediately upon getting involved in the case, we started direct negotiations with the private lender. As a result, in 10 days, in exchange for a payment of 30,000 GEL, the disputed 1/2 share was fully returned to our client.
Client's benefit in numbers
| Indicator | Amount |
| Market value of the apartment (total) | 206,000 GEL |
| Market value of 1/2 share of the apartment | 103,000 GEL |
| Auction sale price of 1/2 share | 19,400 GEL |
| The other party's demand for buyout | 70,000 GEL |
| Price reached through our negotiation | 30,000 GEL |
| Savings compared to the initial demand | 40,000 GEL (–57%) |
| Net property benefit | 73,000 GEL |
| Case resolution period | 10 days |
Avoided loss
If the lawsuit for the termination of shared ownership had been granted and the entire apartment had gone to auction with the same discount (approximately 19% of the market value), the property would likely have been sold for 38,800 GEL, from which the client would have received approximately 19,400 GEL in proportion to their share — and, most importantly, they would have lost their home.
Today, however, the client's financial position is as follows: they own an apartment worth 206,000 GEL, for which they paid 30,000 GEL, meaning a net gain of 176,000 GEL. The difference between the two scenarios is approximately 156,600 GEL.
Conclusion
Losing property at an auction is not the end of the case. Properly and timely conducted negotiations often yield faster and cheaper results than years of ongoing litigation. The main thing is for the lawyer to get involved in the case before the other party files a lawsuit.
Pkhaladze & Partners | Pkhaladze et Associés — Law Firm
Tbilisi, Al. Kazbegi Ave. 24g, AXIS Complex, 10th floor | www.pkhaladze-law.ge | +995 597 117 795
