Buying an apartment under construction (so-called "off-plan" buying) is a popular form of investment in Georgia, but it carries high risks. The buyer pays money not for an existing apartment, but for the developer's promise to build and handover the apartment in the future. The Residential Construction Contract is the main document regulating this relationship. Often, developers offer standard contracts where their liability is minimized, while buyer obligations are maximized. Risks include construction suspension, changes in apartment area, double sales, and indefinite postponement of handover deadlines.
To hedge these risks, qualified analysis of the preliminary purchase agreement and its correct registration in the Public Registry is necessary. Legal.ge offers a service that will help you verify the developer's reliability (land status, permits, liens) and sign a contract that truly protects your property rights and money.
What Does Residential Construction Contracts Service Cover?
This service covers full legal protection for the buyer in dealings with the developer:
- Due Diligence: Checking the developer and the specific project: does it have a construction permit, is the land mortgaged, is the company solvent.
- Contract Revision: Reviewing the terms of the preliminary purchase agreement and proposing amendments (penalties for delay, area discrepancy, force majeure).
- "White/Green Frame" Definition: Precisely writing down in the contract what the handover condition implies (walls, utilities, doors/windows) to avoid misunderstanding.
- Registration in Public Registry: Ensuring the registration of future ownership rights, which prevents the double sale of the apartment.
- Construction Monitoring: Controlling adherence to contract deadlines and responding in case of breach.
Common Real-World Scenarios
When buying an apartment under construction, the following problems are common:
The first scenario is "Construction Without Permit." The developer sells apartments but does not yet have a construction permit. The City Hall refuses the permit, and construction cannot start. Buyers are left without apartments. An audit reveals this risk.
The second case is "Area Discrepancy." According to the contract, the apartment was supposed to be 60 sq.m, but in reality, 55 sq.m was built. The contract must contain a clause stating that the price will be recalculated based on the actual measurement drawing.
The third scenario is "Mortgaged Land." The land is pledged to a bank. The developer failed to pay the loan, and the bank took the land and the building on it. Buyers lose their apartments. It is important to obtain the bank's consent to release the mortgage on each specific apartment.
The fourth situation is "Deadline Overrun." The developer is 3 years late. In the standard contract, the penalty is minuscule or non-existent. The lawyer demands the inclusion of an adequate penalty.
Georgian Legal Framework and Regulations
Purchasing real estate under construction is regulated by:
- Civil Code: Regulates the purchase agreement.
- Law on Public Registry: Requires registration of rights to an apartment under construction if a construction permit is issued. This is the buyer's main protection.
- Construction Permit Rules: Defines the developer's obligations to the state.
Process and Stages
The client chooses an apartment. The lawyer checks the developer in the registry. A preliminary agreement is drafted. Parties go to the Public Registry (Public Service Hall) and register the future ownership right. Only after this does the buyer pay the money (or part of it). After construction completion, the object is commissioned, and the preliminary agreement is converted into full ownership rights.
Why Legal.ge?
An apartment is one of the biggest purchases in a person's life. Legal.ge allows you to hire lawyers specializing in real estate law. Do not trust only advertising brochures — check legal documents with a professional before signing.
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