Free Transfer and Direct Sale — What the Law Regulates
Free transfer into ownership and direct sale of state property belong to those forms of disposal of state property which differ from the auction: what is decisive here is not bidding but a decision of a state body and the special grounds provided for by law. The norms operative in this field regulate issues grouped into three clusters: special cases of determining the initial privatization amount, free transfer of property into ownership, and direct sale on the basis of competitive selection.
Each of these forms shares a common feature: the decision-making body is the Government of Georgia, while the concrete procedural details — the procedure for determining amounts, the conditions of initiation and remuneration — are often established by Government decrees or ministerial orders. Therefore, when planning a specific transaction, it is necessary to study the respective legal acts together with the law itself.
Special Cases of Determining the Initial Privatization Amount
The law expressly permits the initial privatization amount to be set below market value in special cases. Namely, where state property is privatized through an auction announced with conditions, the initial privatization amount may, under a procedure determined by a decree of the Government of Georgia, be set at a price below the market value of that property.
A special rule applies to unleased agricultural land in state ownership: in that case the initial amount may be set at a price below the value established by law. This means that the state uses the price instrument to attract investment — but the format of any reduction is always regulated by a Government decree, and not by the discretion of the selling body.
From a practical standpoint, if you plan to participate in an auction announced with conditions, comparing the initial amount with a market valuation will give you useful information for reasoning about the conditions. The law directly indicates that in these cases a reduced price is admissible only within the established procedure.
Free Transfer into Ownership — for Displaced Persons
The principal recipient of state property transferred free of charge is a socially sensitive group defined by law. Namely, by decision of the Government of Georgia, state property may be transferred free of charge into ownership to internally displaced persons from the occupied territories of Georgia — displaced persons.
For the adoption of the decision, the issue is prepared and presented to the Government by the property manager. This means that the process begins with a proposal of the systemic body and not directly with an application by the recipient, although the interest of the displaced persons constitutes the substantive ground of the decision.
The rule of deadlines is also important: within 3 months of the adoption by the Government of the act on free transfer into ownership, a respective contract is concluded between the State Property Agency and the acquirer of the property. If the contract is not concluded within this period, the Government act loses force after the expiry of the period. This construction attaches a real sanction to the contract deadline — the decision itself is not indefinite.
Distribution of Movable Property
The law separately regulates the distribution of movable property in state ownership. Movable property may be distributed, including for social purposes, by decision of the State Property Agency, on the basis of the consent of the ministry.
The circle of recipients is also defined: movable property may be transferred free of charge into ownership to a municipality, a public-law legal entity, a non-entrepreneurial — non-commercial — legal entity, or an enterprise created with 50% or more than 50% state equity participation. In this way the law avoids indiscriminate transfer of movable property and ties it to the demands of the social-public sphere.
If your organization falls within this circle, bear in mind: the decision-maker is the State Property Agency, and the consent of the ministry is also required. The law does not prescribe a formal application procedure — that detail is a matter for the agency, and therefore establishing the correct route of approach in a concrete case requires legal consultation.
Direct Sale on the Basis of Competitive Selection
The decision on direct sale of state property on the basis of competitive selection is taken by the Government of Georgia. At the same time, the law entitles the Government, in individual cases, to entrust the taking of this decision to the Minister of Economy and Sustainable Development of Georgia.
This delegation is practically significant: issues of competitive selection may be decided both at the level of the Government and of the minister, and precisely for that reason the addressee of a concrete application is determined only in the context of the specific case. The law does not describe the detailed selection procedure within these norms — it points to the subject of the decision and to the possibility of delegation.
The Limitation Period for Claims
For disputes connected with privatized property the law establishes a special period: the limitation period for a disputed issue connected with a privatized immovable item in state ownership is 3 years. This means that claims concerning the legality of a privatization must be submitted to court in a timely manner.
For citizens and business this norm is significant in both directions: it affects the interests of the state as well as of the acquirer. If you or your organization has acquired a privatized immovable item and doubts its legality, the correct calculation of applying the limitation period is decisive for defending your position. This requires an analysis of the existing documentation and, if necessary, a qualified legal assessment.