EVICTION PROBLEMS ARISING FROM TENANCY AGREEMENTS IN GEORGIA CURRENT REALITY AND CHALLENGES (Guarantee institution under French Law)

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 Police evictions are back – The National Enforcement Bureau under the Ministry of Justice has a new initiative to protect landlords from contractual risks in real estate finance transactions. The idea, which belongs to the Ministry of Justice, will allow legal entities and individuals to register a contract of sale, including lease and tenancy contracts, with the National Enforcement Bureau. The parties can write in the tenancy agreement that the owner will have the opportunity to apply to the enforcement bureau in case of violation of the terms by the tenant and receive enforcement service from it in an expedited manner. As is known, the police eviction from the property no longer exists since 2015, which means that if the person who rented an apartment cannot or does not pay the amount, the landlord must apply to the court instead of the police. What problem did the cancellation of police eviction create, and what will the new initiative of the Ministry of Justice change? Is the mentioned initiative a way to fundamentally solve the problem? The reader will hear the answers to these questions in this article.

Keywords: Rent, Landlord, Eviction

Introduction

In recent years (especially after the Russia-Ukraine war), cases have become more frequent when individuals, including migrants, rent an apartment or commercial space, then do not pay the rent but not leaving the real estate; Even the legal owner does not have the leverage to quickly recover the property, because the so-called after the abolition of the police eviction rule, this is only possible through the courts, and proceedings in the courts are often delayed for years due to procedural bureaucratic procedures. Society agrees that the right to property is paramount; it is the all-encompassing legal dominion over a thing. Ownership gives a person the right to possess, dispose and use. The right to property, as a natural right, is not only the basic basis of human existence but also ensures freedom and adequate realisation of skills and abilities. Also, the property right is the basis of the economic activity of a natural or legal person and the most important element determining it; ensuring the smooth transfer of the property right is considered to be a necessary condition for the effective use of resources and the increase of the universal state.[1]

Legal nature of the tenancy agreement

According to the tenancy agreement, the lessor is obliged to transfer to the lessee the specified item for temporary use and to allow him to use this item during the term of the agreement, and the lessee is obliged to pay the lessor the rent agreed in the agreement.[2]

Under the tenancy agreement, the lessor is obliged not only to hand over the object of rent to the lessee (in possession and/or use) but also to maintain the appropriate condition of the object during the entire period of the lease. This condition is cumulative in nature, which means that if both conditions are not fulfilled, then the lessor cannot fulfil the obligation under the tenancy agreement in full, regardless of whether it is expressly stated in the rental agreement or not. The suitability of the subject of the tenancy agreement (determining the suitable condition) must be done in the presence of the lessee. When determining the suitable condition, it is necessary to determine to what extent this or that particular item (the subject of the contract) is suitable (for use) for the purposes provided for in the contract. The purpose of the item is determined by the nature of its normal use[3].

The tenancy agreement represents the number of agreements that provide for the transfer of the item for use. The main right of the lessee is to use the rented object, and the deprivation of this right or the late transfer of the object (rental object), gives him (the lessee) the right to refuse the contract[4].

It seems that the necessary component of the rental is the transfer of the thing (apartment), which in turn entitles the lessee to use it until the lease agreement is terminated or dissolved in accordance with the law to prevent any interference with the use of the item.

Consideration of Vindicatory Claims and Enforcement Issues

A vindictive action is an action by a non-possessor against the wrongful owner for the return of real property[5]. According to § 985 of the German Civil Code, the legal owner can demand the return of the item from the owner. The Supreme Court of Georgia indicated in relation to one of the cases that the vindication claim is satisfied in the presence of three prerequisites: 1) there must be an owner of the thing, 2) there must be an owner, 3) the owner must not have the right to possess the thing[6]. The goal of a vindication lawsuit is for the former owner to recover his property status and get his item back. The owner cannot be accused of negligence, the owner may act more prudently when entering into an agreement for the temporary possession of the thing than when purchasing the thing, and the assumption about the fault of the owner, in its essence, means imposing civil legal responsibility of the owner on himself, which is not allowed[7].

When the contractual partner becomes the illegal owner of the item, both the claim of the item and compensation for damages must be made on the basis of a contractual claim because the party to the contract was obliged to return the item to the owner upon termination of the contractual relationship.[8] Thus, if the thing is with the tenant after the expiration of the contract, the owner can demand the thing from him, both on the basis of a vindication and a contractual claim.

As of today, many civil cases are pending in courts with the request to reclaim the item from illegal ownership; however, due to court congestion, the mentioned lawsuits continue until the last instance, which is a great financial loss for the owner in terms of unacceptable rent, to this is added the protracted enforcement processes, lack of personnel, sometimes during the eviction process, enforcement police from the regions the employees participate, so I believe that the financial interests of the owner will not be protected as much as possible during the long stage of the eviction procedures.

Guarantor as a means of financial security for the lessor

Who is the guarantor, and what is his obligation to the tenant and the lessor? A guarantor, also called a "guarantor" (a natural or legal person - a company) undertakes to pay the rent (as well as any interest in the event of a delay) in the event that the tenant fails to fulfil his obligations. The guarantor must have a fixed income and a stable financial situation; the landlord can even require several guarantors if he considers that the tenant's income and financial situation are unstable (this is the rule in the French Republic).

The tenant is not obliged to have a guarantor when renting an apartment, but the landlord has the right to request it. In France, the presence of a guarantor is more and more required when signing a tenancy agreement. The surety bond must be a written deed between the lessee, the lessor and the guarantor, drawn up by a notary or a lawyer.

It is important for the lessor to know whom to turn to in case the lessee does not pay the rent; as for the guarantor/guarantor, he is obliged to fully understand the scope of his obligation before concluding the transaction, it is necessary to specify its duration in the act of guarantee, since the validity period of the guarantor's obligation depends on the period of completion of the rental agreement, and it is terminated immediately after the end of the current rental agreement, it should also be noted that the lessor and the lessee do not have the right to extend the term of the rental agreement without notifying the guarantor, the said agreement is void in terms of the guarantor's responsibility. According to Article 2297 of the French Civil Code, the guarantor signs a guaranty document specifying the amount of the rent and the conditions for its revision[9]. The reader will be interested in what measures the lessor should apply when the lessee cannot or does not fulfil his obligations; in such a case, the owner must submit the rental agreement to the National Bureau of Enforcement and a letter sent to the guarantor about the existence of the debt (with proof of delivery), after which the bailiff, without examining/evaluating any issue, will make a withholding of the guarantor's proceeds (as in foreclosure/collection), after which the National Enforcement Bureau will transfer the withheld amount/rent to the landlord.

conclusion

In conclusion, it should be said that, as of today, the owner's interests are inadequately protected in this regard and require more guarantees so that they are not neglected, and I also believe that the above-mentioned guarantee mechanism will be highly appreciated in Georgia and Georgian society, and it will not be alienated, since Georgian Legislation already recognises the guarantor institution in banking and credit relations, so I think that if commercial banks require a guarantor in certain cases when granting a loan, why should it not be possible to introduce a guarantor mechanism during the conclusion of a rental agreement. When signing a tenancy agreement, the lessor, in addition to requiring a guarantor, can take certain preventive measures, e.g. check the potential tenant's previous rental history with the previous landlord; this will give the landlord some insight into his new counterparty. At the same time, it is important to understand that the Constitutional Court of Georgia discussed the issue of compliance with the Constitution in the first and second sentences of Article 268 Prima 1 of the Code of Civil Procedure of Georgia and Article 269 of the same Code. These articles allowed the parties, when signing the contract, to define themselves, in case of a dispute, the issue of immediate enforcement of the decision of the court of first instance.

In this case, the winning party had the opportunity to immediately start enforcement proceedings based on the decision of the court of first instance, regardless of the appeal of the decision to a higher court.

According to the decision of the Constitutional Court, the immediate enforcement of the decision of the court of first instance limits the rights of the losing party.

Although the Court recognised the practicality of immediate enforcement in terms of supporting civil settlements and speedy restoration of violated rights, it nevertheless found the adverse effect of immediate enforcement disproportionate to the benefits obtained.

According to the decision of the Constitutional Court, the above-mentioned articles of the Civil Procedure Code of Georgia lose their force as of October 1, 2023[10]. According to the above-mentioned decision, the courts will be overloaded even more, which will prevent the timely restoration of the violated rights of the legal owner, so I believe that the method of solving the problem mentioned in the article is an alternative for this stage.

Bibliography

Research and textbooks:

1. Chechelashvili, Z. (2020). Contract Law, "Bona Causa" publishing house, vol., Tb. p. 234.


2. Tumanishvili, G., (2012). Contract drafting technique and obligation-legal normative regulation, Ilia State University, Tb., p. 70.


3. Collective of authors (2002). Commentary on the Civil Code of Georgia, book four (L. Chanturia, ed.) "Samartali" publishing house. Vol., p. 96.


4. Mikava, L., (2011). Vindication lawsuit as a legal means of protecting the right to a lawsuit, "Justice and Law" magazine, N1., Vol., Tb. p. 76.


5. Kochashvili, K. (2015). Ownership and property - fact and right in civil law, "Bona Causa" publishing house, Tb. p. 193.


6. Zoidze, B., (2003). Georgian civil law, vol., Tb, p. 101.

Foreign Literature:

1. Posner, R., (2011). Economic analysis of law. 8th edition, Aspen Publishing, p. 4.

Normative material used:

1. French Civil Code Art. 2297

Court Decisions:

1. Decisions of the Supreme Court of Georgia on civil, entrepreneurial and bankruptcy cases, N8, 2003.


2. Decision No. 2/3/1421, 1448, 1451 of the Constitutional Court of Georgia dated April 11, 2023.

Footnotes

[1] Posner, R., (2011). Economic Analysis of Law. 8th edn, Aspen Publishers, p. 4.

[2] Chechelashvili, Z., (2020). Contract Law, "Bona Causa" publishing house, vol., Tb. p. 234.

[3] Tumanishvili, G., (2012). Contract drafting technique and obligation-legal normative regulation, Ilia State University, Tb., p. 70.

[4] Collective of authors (2002). Commentary on the Civil Code of Georgia, book four (L.  Chanturia, ed.) "Samartali" publishing house. Vol., p. 96.

[5] Mikava, L., (2011). Vindication lawsuit as a legal means of protecting the right to a lawsuit, "Justice and Law" magazine, N1., Vol., Tb. p. 76.

[6] Decisions of the Supreme Court of Georgia on civil, entrepreneurial and bankruptcy cases, N8, 2003.

[7] Kochashvili, K., (2015). Ownership and property - fact and right in civil law, "Bona Causa" publishing house, Tb. p. 193.

[8] Zoidze, B., (2003). Georgian civil law, vol., Tb, p. 101.

[9] French Civil Code; Art.2297

[10] Decision No. 2/3/1421,1448,1451 of the Constitutional Court of Georgia dated April 11, 2023.