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Housing in Georgia

In western Georgia, a typical older home is wooden, raised off the ground slightly in areas where flooding or very damp ground is problematic. In the drier climate of eastern Georgia, stone (later brick) houses with flat roofs were constructed along roads. In urban regions, two-story brick or cement block homes are not uncommon.

Before independence, most urban housing was regulated by the government while most rural housing was privately owned. Beginning in the mid 1990s, legislation towards privatisation led to the legalisation of an open real estate market.

The expatriate community is concentrated in Tbilisi, capital of Georgia.

Georgian law allows the landlord and the tenant full freedom to negotiate and agree on the rent. The law also entitles the parties to freely negotiate rent increases, as well as cost-of-living rent increases.

Technically, the landlord enjoys an advantage, because if the tenant refuses a landlord’s proposal to increase the rent in accordance with prevalent market trends and conditions, the landlord is deemed to have a ‘legitimate reason’ to prematurely terminate the tenancy agreement. But in practice, given the existing situation, in which supply of residential property exceeds demand, unless the increase is reasonable and justified such a demand could cause the landlord to lose out.

There are no special rent/tenancy tribunals in Georgia. Consequently, jurisdiction over tenancy relations is exercised by the common courts of Georgia. Private arbitration also exists and may be contractually chosen as a dispute resolution form. However at this point, arbitration is not very widespread.

Formally, a tenancy contract which is “manifestly detrimental” to the tenant may be declared null and void, however this right of tenants is rarely used in practice.

No termination notice is required upon expiration of a fixed-term contract. But if the tenant continues to use the property and the landlord does not object thereto, then the contract is deemed to have been extended for an indefinite term.

Both the landlord and the tenant can prematurely terminate a fixed term tenancy agreement (but such termination must be in writing) in the following cases: the landlord is entitled to early termination if the tenant does not pay the agreed rent for three consecutive months. He may also terminate early if the tenant (having ignored a notice given by the landlord) substantially damages the property, or creates an apparent danger threatening substantial damage.

Otherwise the landlord may only terminate early for legitimate reasons, viz:

• the tenant has substantially breached his obligations under the contract;
• the landlord needs the residential property personally for himself or for his close relatives;
• the tenant refuses to pay an increased rent, that corresponds to market rates, offered by the landlord;
• the tenant has committed an illegal or immoral act against the landlord, which renders the continuation of their relation impossible.

But if the subject of the tenancy relation is a furnished apartment, then the landlord may always terminate the contract provided he observes the time period fixed for termination of the contract, i.e. three months notice prescribed by law, or other period agreed under the relevant contract.

The established practice in Georgia is that a three-month notice is required for the early termination of any kind of tenancy relations, though in fact a three-month prior notice is only mandatory to terminate a fixed tenancy agreement if it is concluded for a term of more than ten years.

The tenant is entitled to terminate the contract before the expiration of its term, provided he gives at least one month’s notice to the landlord, and offers a substitute tenant who is solvent and acceptable to the landlord, and who agrees to be the tenant over the remainder of the term.

In addition, the tenant may terminate the contract without observing the time period stipulated for the termination of the contract if the transfer of the rented property to the tenant is delayed in whole or in part, or if afterwards the tenant is deprived of the right to use the property. Termination of the contract is allowed only if the landlord does not cure the default within the time allowed by the tenant. However granting such a cure period is not necessary if the tenant has lost interest in the tenancy as a result of those circumstances that gave grounds for termination.

If a residential property is in such condition that its use creates a significant hazard to the health of the tenant, then the tenant is authorized to terminate the contract without observance of the prescribed notice period. Strangely, the tenant enjoys this right, even if he was aware of the danger when entering into the contract, but did not assert a claim then.

Upon termination of the rental contract the tenant must return the property to the landlord in the same condition in which he received it, taking in to account normal wear and tear, or alternatively, in the condition specified in the contract.





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