Forms of Transfer for Use and Restrictions
The transfer of state property for use operates under diverse regimes: property is transferred for a term or indefinitely, for payment or gratuitously, in the form of an auction or without one. The circle of recipients is broad — organs of state power of Georgia and of the autonomous republics, municipalities and public-law legal persons, as well as natural and private-law legal persons. The transfer for use of an immovable item in state ownership is registered in the public registry.
The central restriction of this chapter is as follows: the recipient is prohibited from encumbering the transferred property with a mortgage, pledging or encumbering it with a servitude, concluding any other transaction of disposal over the immovable, or issuing an individual administrative-legal act entailing a change of the property's owner — unless the law provides otherwise. This rule does not extend to property transferred within a public-private partnership project.
The Regime of Transfer to State Organs
A state organ, an organ of an autonomous republic or a municipality applies to the property manager with a statement concerning primary transfer for use; the manager decides within 2 weeks of the application — either consent, which is the ground for registration, or a reasoned refusal; on refusal the matter is considered under the procedure set by government decree. After the primary transfer the property may be transferred to another organ by an individual act of the organ's head, with an act of acceptance and delivery; the former contract is terminated.
Where the owner of property cannot be determined, the organ applies to the property manager, who decides within 30 calendar days of the statement; if no decision is taken within that term, the organ may apply directly to the National Agency of the Public Registry. This regime extends to public-law legal persons as well (with certain exceptions), and a decision of a state-controlled public-law entity to transfer property requires the consent of the controlling organ.
Transfer to Natural and Private-Law Legal Persons
A natural person or a private-law legal person receives state property for payment, in the forms of use provided by the Civil Code, on the basis of an auction and with the property manager's consent. An agricultural land plot may be transferred for a term of not more than 49 years. A paid recipient must pay the transfer fee and maintain the property; a user without a supporting document who uses the property commercially pays, on demand, a fee corresponding to market value on the basis of an expert conclusion.
Transfer without an auction is possible only with the Government's consent (apart from servitude and specific cases); the contract must then be concluded within 3 months of the disposition, and in an auction-based transfer — within 45 calendar days of the auction, failing which the disposition or auction results lose force. For subsoil-processing infrastructure the law allows transfer for up to 49 years at a fee determined by an auditor's conclusion, with a total land area of not more than 3 hectares; and where privatization is prohibited, the property is transferred gratuitously only to an enterprise created with the state's participatory share of 50 percent or more.
Fee and Settlement
The procedure for determining the transfer-for-use fee is approved by the Government of Georgia, and settlement follows the procedure applicable to privatization. The flow of funds is also budget-determined: where the transfer for payment is made by a ministry, the State Property Agency or another state organ, the sum is paid into the state budget; where it is made by an organ of an autonomous republic, a municipality or a public-law entity — into the transferrer's budget. This rule often becomes contested where the transferrer's status and budget destination have been determined incorrectly.
The deadlines for concluding use contracts and budget discipline work together: each form of transfer rests on defined documents, and when a single link — consent, auction or registration — falls out of the sequence, the entire transaction becomes contestable.
Frequently Asked Questions
May state property held for use be pledged?
No — mortgage, pledge, servitude encumbrance and other disposal transactions are prohibited unless the law provides otherwise; the public-private partnership project is an exception.
For what term is agricultural land transferred?
For not more than 49 years save where the law provides otherwise; for subsoil infrastructure the term is likewise up to 49 years with an area of at most 3 hectares.
When is transfer without an auction possible?
Only with the Government's consent, apart from servitude and special statutory cases; the contract must be concluded within 3 months of the disposition.
Where is the transfer sum paid?
In a central organ's case — into the state budget, in the case of autonomies, municipalities and public-law entities — into the transferrer's budget.
How We Help on Legal.ge
The Legal.ge team helps structure the use of state property: choosing the form of transfer, preparing for the auction, contract conditions and the fee calculation. Write to us — we will assess your case together with every deadline of the law.