The court recognized the landowner as the owner of 13 real estate properties.

Another victory for lawyer Nikoloz Pkhaladze in a real estate dispute. The Civil Affairs Chamber of the Tbilisi City Court granted our client's claim. The client was recognized as the owner of 13 real estate properties. These include residential apartments, basements, and commercial spaces located in a multi-apartment building at 22 Ramaz Shengelia Street in Tbilisi.

Facts of the case

Our client owned a 1418 sq.m land plot adjacent to Mukhiani. In 2017, he entered into a main construction contract and a preliminary contract for the exchange of real estate with a construction company. The terms were as follows: the owner would transfer the land to the developer, and the developer would build a residential house on this land at his own expense. In exchange for the land, the owner would receive individualized spaces in the constructed building in unrestricted ownership, free from obligations.

In 2018, the parties signed a written agreement regarding the distribution of the under-construction house. The owner was entitled to 20% of the residential space, commercial space, and parking lots. The distribution agreement was registered in the public registry. The spaces were individualized and had received cadastral codes. The apartments were effectively transferred to the owner in a white frame condition. He renovated part of them at his own expense and continues to use them to this day.

The problem

The developer violated the obligation: the building was not handed over within the legally established timeframe. Additionally, the company accumulated tax debt to the Revenue Service. A lien and mortgage were registered on the very apartments, basements, and commercial spaces that belonged to our client in exchange for the land. The enforcement was transferred to the National Bureau of Enforcement. As a result, the public registry refused to register the ownership of the spaces for the owner.

Thus, the landowner found himself as a hostage of someone else's debt. He exchanged his land for apartments, effectively possessed the apartments, but could not formally become their owner.

Legal grounds

  • Article 183 of the Civil Code of Georgia: Form of acquisition of real estate and registration of ownership in the public registry;
  • Parts one and three of Article 311 of the Civil Code of Georgia: The entry into force of the right defined by the transaction from the moment of registration;
  • Main construction contract and preliminary contract for the exchange of real estate (2017);
  • Written agreement on the distribution of the under-construction residential house (2018), registered in the public registry.

Result

The court granted the claim and recognized our client as the owner of 13 real estate properties.

Why is this decision important

Exchanging land plots is one of the most common schemes in Tbilisi. In such cases, the former landowner often suffers when the developer accumulates debts to the budget, banks, or creditors. This case shows that mere factual possession of the property is not enough. When registration is obstructed, the owner can protect the property through the court.

The case was worked on by lawyers Nikoloz Pkhaladze and Dr. Roin Migriashvili.

If you find yourself in a similar situation (the developer is not giving you the apartment, someone else's debt is registered on your property, or the registry is refusing your registration), contact us: +995 597 117 795 | www.pkhaladze-law.ge