Title Insurance: What Exists in Georgia
Clarity first: the American title-insurance product — a policy protecting the acquirer from legal defects — does not exist on the Georgian market, and we have no direct analogue. What exists is a different system built on two mainstays: the reliability of the public registry and the seller's contractual liability for the legal faultlessness of the purchase. Correct use of these two instruments achieves what title insurance would otherwise achieve — the protection of the acquirer from legal defects that surface after the transaction has already been completed.
The Public Registry and Its Presumption of Reliability
The public registry is the unified body of data on rights over things and non-material property values, on the creation of pledges and of tax liens or mortgages, changes therein and their termination. Registry data are subject to the presumption of reliability and completeness: registry entries are deemed correct unless their inaccuracy is proven.
The principal norm of buyer protection is this: in favor of a person who acquires a right from another on the basis of a transaction, where that right was registered in the registry in the name of the disposer, the registry entry is deemed correct, except where a claim has been filed against the entry, or the acquirer knew that the entry was inaccurate. Likewise, it is impermissible to demand the consent of a co-owner upon conclusion of a transaction where that co-owner is not registered as such in the registry. These presumptions are the core of registry-based protection.
The Seller's Liability for Legal Defects
The rule of contractual protection is this: a thing is legally faultless where a third person cannot assert against the buyer a claim arising from its rights; equivalent to a legal defect is also the case where a non-existent right is registered in the public registry. In other words, where an entry existing in the registry does not correspond to reality, this is a ground for a claim.
Where the sold thing is defective, the seller must either cure the defect or, where the matter concerns generic goods, replace it within the necessary period. The seller bears the reimbursement of the costs necessary for the cure — including transport, travel, work and materials — though it may refuse where this requires disproportionately large costs. In the sale of a right or other property the rules of sale apply accordingly: the seller undertakes the substantiation of the authenticity of the right and the costs of transfer, and where a right granting the possibility of possessing a thing has been sold, the seller must deliver to the buyer a thing faultless both materially and legally.