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.
Reclaiming the Thing: When the Threat Arises
The clearest legal risk exists in the form of reclaiming the thing: the owner may demand of the possessor the return of the thing, except where the possessor had the right to possess it. Precisely for this reason, checking the registry before acquisition and verifying the disposer's authority performs the function that title insurance performs elsewhere.
How to Protect Yourself on Acquisition
The practical algorithm is this: first a registry excerpt is extracted and the disposer's right and encumbrances are checked; then the warranties are fixed in the contract in sequence — the seller's obligation to deliver legally faultless and to cure in case of defect; and finally, registration is carried out immediately after the transaction. Observing these steps significantly reduces the risks associated with title defects.
If a defect nevertheless appears, the claims are built on the norms noted above: cure or replacement, reimbursement of costs and, where necessary, exit from the contract. The attorneys of Legal.ge will assist you through the full process of acquiring real estate — from the first registry check through the drafting of protective clauses to the completion of registration and, where a defect later appears, through the assertion of claims against the seller and the defense of your acquired right. In disputes of this kind the outcome is decided by the quality of the paper trail assembled before the closing: the excerpt, the contract, the warranties and the registration file together form a record that no later argument can easily displace.
Protective Provisions of the Contract
Since no insurance product exists, the provisions of the contract acquire the significance that a policy has in other systems. The seller’s warranty of legal soundness is fixed expressly; the period for curing and the burden of costs are determined; the substantiation of title and transfer expenses are stipulated. These details raise the buyer’s position preventively and decide how simply an injured right is restored.
Does title insurance exist in Georgia?
No — no such product exists; the buyer is protected by the registry’s presumption of reliability and the seller’s liability for legal defects.
How reliable is a registry entry?
Entries are deemed correct until inaccuracy is proved; the acquirer is protected by the entry in which the alienor was registered, unless it knew of its inaccuracy.
What is a legal defect?
A condition in which a third person can assert a claim against the buyer on the strength of its rights; a registered non-existent right is equated to it.
What duty does the seller have where a defect appears?
The curing of the defect or replacement of a generic thing within the necessary period; the costs are borne by the seller, though it may refuse where they are disproportionately great.
May the thing be reclaimed from the possessor?
The owner may demand return where the possessor had no right of possession — hence rights must be verified before acquisition.
How We Help on Legal.ge
The lawyers of Legal.ge accompany the process of acquisition — from the registry check to the protective provisions and registration; where a defect appears, they build and defend the claim in court. Contact us — title protection in Georgia is built on these lines.