The Essence of a Lien on Movable Property
One of the most widespread instruments of enforcement proceedings is the lien on movable property: under the law, it means the description of the debtor's property, the declaration of a prohibition on the owner's disposal of the property — alienation in any form, pledging, or the conclusion of lease and rental contracts over it — and/or the transfer of the property for storage. The enforcement officer records the liened items in the act of description and lien, which constitutes the principal documentary foundation of the lawfulness of the measure. If your property has been liened or, conversely, you are awaiting the realisation of a creditor's rights, this page explains the legal nuances of every stage of the procedure in detail and shows where the interests of each participant require protection.
Prohibited Disposal and the Voidability of Subsequent Transactions
The law states plainly: a transaction noted as prohibited after the imposition of a lien on movable property is void. This means that a sale, pledge or lease carried out by the debtor after the lien produces no legal effect, and any disposal whatsoever of the liened property by the debtor or by the bailee — the person keeping it — entails liability under the procedure prescribed by the criminal legislation of Georgia. For that reason, any decision connected with property after a lien requires competent legal consultation: a wrong step adds a new legal problem on top of the existing obligation, whereas a timely analysis of the act preserves the party's position and prevents avoidable losses.
Storage of Money, Securities and Valuables
The law additionally regulates the physical storage of liened property: the enforcement officer immediately deposits liened money into the deposit account of the National Bureau of Enforcement (a private enforcement officer — into the settlement (current) account), while liened securities and valuables are received and kept in a specially allocated, secured room. The same applies to other liened items where a risk of interference with those items exists. If the liened movable items remain with the debtor or are entrusted to another person for storage, the lien may be effected by sealing. In cases connected with banks and other financial institutions, the law empowers a liquidator or special administrator to transfer liened accounts, and dematerialised securities accounts, to another financial institution in the prescribed manner, which is of particular practical importance in insolvency-related enforcement.
Rights of Third Persons and the Special Regime of Crops
Where, at the moment of the lien, a third person asserts a right over the debtor's property, the item is nevertheless entered into the act of description and lien with an appropriate note. The enforcement officer simultaneously explains to that person the right to apply to court with a claim for the release of the property from the lien; and where the third person presents a document confirming ownership, the officer, with the creditor's consent, is authorised to exclude the property from the act. Fruits are regulated separately: fruits not yet separated from the land may be liened until enforcement against immovable property has taken place, yet the lien may not be imposed earlier than one month before the harvest. These rules define narrow boundaries within which both the creditor's expectations and the debtor's and third person's defences must be assessed.
Seizure of a Movable Item and Its Transfer to the Creditor
When the debtor must hand over a movable item, the National Bureau of Enforcement seizes the item from the debtor and transfers it to the creditor. If the item to be transferred cannot be found, the debtor must inform the National Bureau of Enforcement where the item is located; and if the debtor states that this is impossible, the debtor is obliged to indicate in the protocol of the enforcement action, in the form of a written guarantee, that the item is not possessed. A debtor who fails to perform this obligation bears liability in the manner established by law. Hence the position of both the creditor and the debtor requires precise procedural knowledge, timely analysis of the protocols, and, where violations are detected, an immediate reaction through the remedies available in enforcement proceedings.
Frequently Asked Questions About Liens and Seizure
What does a lien on movable property mean?
It is the description of the debtor's property, the declaration of a prohibition on its disposal — alienation, pledging, lease and rental — and/or the transfer of the property for storage. The enforcement officer records the items in the act of description and lien.
What happens if the item to be seized cannot be found?
The debtor must inform the Bureau where the item is located or, in the form of a written guarantee recorded in the protocol, state that the item is not possessed. Failure to perform this obligation entails liability in the manner established by law.
May the item be sold after the lien?
No — a prohibited transaction concluded after the imposition of the lien is void, and disposal of the item by the debtor or by the keeper triggers criminal liability.
How does the law protect a third person?
A third person's assertion of a right is noted in the act, the enforcement officer explains the right to apply to court, and upon presentation of an ownership document together with the creditor's consent the property is excluded from the act.
How We Help on Legal.ge
The lawyers of Legal.ge assist creditors, debtors and third persons alike: we analyse the acts and protocols, prepare appeals and claims and defend your interests before the National Bureau of Enforcement and the courts. Contact us — we will assess your situation and act promptly to protect your property and rights.