The Homeowners' Association: When It Arises and What It Means for an Apartment Owner
The homeowners' association is the legal form of managing an apartment building, and its most important peculiarity is that it is created by the law itself. Under the Georgian Law on Homeowners' Associations, an association is deemed founded in a multi-apartment building situated on a single land plot which contains more than two apartments held in individual ownership. Membership is therefore automatic — by purchasing an apartment you are already a member of the association, and no separate accession decision is required.
The law also contemplates alternative models: in a building on a single land plot, upon a unanimous decision of all members and with the consent of the municipal executive organ, one or several entrance-based associations may be founded; and upon the decision of all owners of several buildings on adjacent plots, with the same consent, a single common association may be created. The association operates on the basis of the law and its charter, while the conditions of its liquidation are determined by this law and other legislation.
Common Property: What Belongs to the Members Jointly and How Shares Are Calculated
The common property of the association's members comprises the land plot, the parts of the building and the structures, installations, engineering networks and equipment that are not in individual ownership. The law describes this property in detail: the land plot; buildings and engineering-communication equipment intended to service the common property; the load-bearing and enclosing structures of the building — foundations, frame, walls, common-use balconies, interfloor ceilings, parapets, cornices, drainpipes; vestibules, entrance halls, corridors, stairwells, basements, attics, boiler rooms, technical floors, roofs, lifts, shafts, channels and refuse chutes; and transit lines. Acquired movable property, securities and intangible goods may also enter the common property.
The method of calculating the share is fixed by law: an owner's share in the common property is determined by the ratio of the area held in individual ownership to the total area of the apartments in the building. That same share determines the owner's participation in the common costs of maintaining, operating and developing the common property — unless the charter provides otherwise. A larger apartment therefore means a larger contribution obligation, and this circumstance should be factored into your budget before purchasing.
Disposal: What Is and Is Not Allowed
The law protects the link between the apartment and the share at the level of disposal as well: individual ownership may not be alienated without the owner's share in the common property, and the apartment may not even be encumbered by mortgage or otherwise without the corresponding share — apartment and share pass together. An individual object or part of the common property may be transferred to a third person for use only in accordance with the rules established by the charter. Stairwells and stairs, lifts and common-use shafts and channels, common corridors and galleries, technical floors, load-bearing and enclosing structures, roofs, and the building's servicing mechanical, electro-sanitary and other equipment may be transferred for use only upon a unanimous decision of all members, while burdening the land plot with a right of limited use follows the procedure established by the Civil Code.
At the level of management the rule is simple: joint management of the common property rests with the owners unless the charter or a contract provides otherwise. Each owner may, without the consent of the others and within the bounds of reason, take the necessary measures to prevent damage directly threatening the common property, and may demand reimbursement of the expenses incurred; each may also demand that the association's activity be conducted in accordance with the charter — or, in its absence, with the law's requirements and the common interests of the apartment owners.
Legal Status: Not a Legal Entity, Yet the Liability Is Real
The most frequently misunderstood issue is status: a homeowners' association is not a legal entity. It may have settlement and other bank accounts and other necessary requisites, it possesses separate property, and it may acquire property and non-property rights and obligations in its own name; in legal relationships it is represented by the chairperson or another authorized person. The association is not liable for its members' obligations, but the claims of the association's creditors may be satisfied from the members' property, and the members answer for the association's decisions according to their share in the common property, personally and as solidary debtors.
The transfer of obligations is also settled by law and is decisive for buyers: the chairperson, with the consent of the meeting, may register in the public registry a member's debt to the association as an obligation attached to the immovable, where it exceeds 500 GEL; and upon alienation of an apartment, the new owner answers personally and as a solidary debtor for the former member's unfulfilled obligations connected with membership. Before buying an apartment it is therefore essential to check the public-registry extract for an entry of association debt. A separate institution is the voluntary restriction: members must register in the public registry a restriction on the possession, use or disposal of an apartment established by written contract, and the restriction enters into force only after registration — the registration mechanics are set out in detail by the legislation on the public registry.
Charter, Chairperson and Meeting: The Practical Machinery of Governance
An association may have a charter determining the rules for its amendment, the rules for developing the common property, the amounts of regular expenses and additional contributions, the adoption and execution of the household plan, the rules for alienating, renting, leasing and pledging the common property and for transferring a servitude or other right, borrowing and lending, the election and dismissal of the chairperson, and the transfer of management functions to an invited manager. Where the number of members does not exceed twelve, the charter is adopted by 3/4 of the votes; in all other cases by 2/3. If no charter is adopted within 3 months of the law's entry into force, the association operates under the rules established by the law until a new charter is adopted.
The association's activity is led by the chairperson; in a building where the number of entrances exceeds two, the chairperson may appoint a representative in each entrance. The chairperson is elected by 2/3 of the members' votes at a meeting, for a defined term, and where election fails the functions are performed by members in rotation for 6 months, the order being determined by drawing lots. Any member or an invited manager may be elected chairperson. The chairperson convenes the meeting at least once a year — a rule that applies where no charter has been adopted or the charter is silent; in cases of urgent necessity the meeting is convened immediately, members are notified in writing, and where there is no chairperson or he avoids convening, any owner may convene the meeting.
Where no charter exists, the decision-making rules are also fixed by law: the meeting is decisive if 2/3 of the members attend; absent a quorum, the chairperson reconvenes the meeting with the same agenda, and that meeting is decisive regardless of the number of participants — which must be stated in the notice. Each owner has one vote — several owners of one apartment exercise the vote jointly, while an owner of several apartments has votes corresponding to their number; decisions are adopted by more than half of the attendees' votes. A member may not vote where there is a conflict of interests or where the matter concerns a lawsuit brought against that member. The decision is recorded in minutes, which every owner may review and appeal in court; an adopted decision binds every member — including those who did not take part in the vote.
Frequently Asked Questions
Must an association be established in an apartment building?
The association is created by the law itself in a building on a single land plot containing more than two individually owned apartments — no special decision is needed. Membership attaches automatically to ownership of an apartment, while an entrance-based or multi-building common model requires unanimity of the members and the municipality's consent.
Can an apartment be sold without the share in the common property?
No. Individual ownership may not be alienated without the owner's share in the common property, and even encumbering the apartment by mortgage is impossible without the corresponding share — apartment and share are inseparable.
Does the former owner's arrears pass to the new one?
Yes — upon alienation of an apartment the new owner answers personally and as a solidary debtor for unfulfilled obligations connected with membership. A debt exceeding 500 GEL may also be registered in the public registry, so check the extract before buying.
What majority adopts the charter?
Where the number of members does not exceed twelve, the charter is adopted by 3/4 of the votes; in all other cases by 2/3. Without a charter the association operates under the rules established by the law.
How We Help on Legal.ge
The Legal.ge team assists associations and individual apartment owners at every stage: we draft the charter and steer its adoption, handle the registration of voluntary restrictions and member debts, advise on convening meetings and quorum questions, and defend your interests in contested situations over voting and solidary liability. Contact us — we will bring the governance of your building into lawful and transparent order.