Selling residential property involves significant stress for many owners, with the main priorities being the secure receipt of funds and optimization of tax liabilities. Unlike buying, where the focus is on the property's "cleanliness," selling focuses on limiting the seller's liabilities and securing financial guarantees. Qualified legal assistance is essential for the seller to avoid risks such as: non-payment by the buyer after title transfer, unexpected tax penalties (e.g., capital gains tax), or claims regarding the condition of the sold apartment (hidden defects). This service is oriented towards maximizing the protection of the seller's interests at all stages of the transaction.
What does this service cover?
Legal services for sellers include:
- Tax Planning: Analysis of the seller's tax status. Are you liable for income tax (5% or 20%)? How can legal exemptions (e.g., the 2-year ownership rule) be utilized?
- Property Legal Preparation: "Cleaning" the property before sale — removing mortgages, lifting seizures, clearing utility debts, and gathering necessary certificates.
- Drafting Sales Agreement: Preparing a contract that protects the seller. For example, including clauses that limit liability for the future condition of the apartment ("sold as is" principle).
- Secure Settlement: Organizing the use of bank guarantees, Escrow accounts, or letters of credit to ensure ownership transfer occurs only in exchange for guaranteed receipt of funds.
- Handover Act: Executing a document that records the apartment's condition, meter readings, and handed-over keys, thereby finalizing the seller's obligations.
Common Real-World Scenarios
Sellers often face the following challenges:
- Installment Sale: The buyer offers to pay part now and part in 6 months. If the contract does not include a mortgage right for the seller, there is a risk of not receiving the remaining balance and losing the apartment.
- Foreign Buyer: The buyer is a foreigner transferring funds from abroad. The bank may block the transaction. The lawyer prepares source of funds documentation for the bank.
- Mortgaged Apartment: You want to sell an apartment pledged to a bank. Bank consent and a tripartite deal are needed so the loan is paid off with the buyer's money first.
- Repair Claims: 2 months after the sale, the buyer calls demanding compensation for faulty wiring. A properly drafted contract protects you from such demands.
Georgian Legal Framework
Knowledge of the Tax Code of Georgia is critical for sellers. Surplus income (capital gain) from the sale of a residential house/apartment by an individual is taxed at 5%. However, if the property has been owned for more than 2 years, the seller is exempt from tax. For commercial space or frequent sales (economic activity), the rate can be 20%. The Civil Code regulates the seller's obligation to transfer property free of legal and material defects. A lawyer helps the seller fulfill this obligation and manage risks.
Process: How does a specialist work?
The process begins with a consultation on tax liabilities. The lawyer calculates the expected tax and discusses optimization paths. Then, property documents (extract) are prepared. When a buyer appears, the lawyer negotiates contract terms — rejecting standard, "one-sided" terms proposed by the buyer. On the day of the deal, the lawyer attends the process at the Public Service Hall and monitors the fund transfer. Finally, a handover act is signed.
Why Legal.ge?
Property sale is successful only when the money is received and claims are ruled out. On Legal.ge, you will find real estate lawyers specializing in protecting seller interests. They ensure your transaction is financially profitable and legally secure, avoiding tax penalties and court disputes. Sell confidently with Legal.ge.
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