Home / Georgia / Throwback to the Past: Georgian Dream MP Proposes to Restore Forcible Eviction Practice

Throwback to the Past: Georgian Dream MP Proposes to Restore Forcible Eviction Practice

Parliament of Georgia of the new convocation may restore forcible eviction practice. Georgian Dream majoritarian MP candidate Ilia Tsulaia has already proposed this initiative. The adopted legislation should be optimized to protect both business and property owners from problems, he said.

In response to the question whether forcible expulsion practice suspension had brought negative outcomes or not, Tsulaia pointed out that he had no information from the banking sector, but no negative results had been registered in the development sector. I just mean that rights of property owners should be protected, he noted.

If I am elected, I will put forward this initiative to revise the law and any issues that will create barriers to business should be revised, Tsulaia noted. The law and its accompanying processes should be examined jointly with other MPs in the corresponding committee and the legislation should be optimized, Tsulaia said.

“In general, any issue that creates additional bureaucratic barriers are incorrect. As to this specific case, rights of property owners must be protected, when the property  lessee does not pay leasing fee. In this case the property owner’s rights are restricted  and they cannot make insolvent clients timely leave the leased space. Dishonest lessee may make use of this situation and stay in the space for a long period without covering leasing fee. In similar cases, previously, property owner was protected and could make dishonest clients leave the space in simple way, but today they face real problems. Similar moments should be ruled out and rights of legal owners must be protected by the law. I do not say that all laws should be abolished, but the existing legislation should be just improved to maximally protect rights of legal investors or property owners”, Tsulaia noted.

Forcible expulsion practice was suspended in December 2015. Parliament of Georgia adopted due amendments by third hearing at the December 11 plenary session.

Despite negative position of Business Association, Business Ombudsman, Association of Banks, a part of nongovernmental organizations, a majority of Parliament backed the mentioned amendment anyway. Today this decision has been appealed to the Constitutional Court.

Under the approved amendments, a citizen may be expelled from a residential space on the ground of only court decision. All norms that enabled to expel and evict a  citizen  were annulled.

It is interesting that about one year has passed since adoption of these amendments and the law objectors cannot name specific problems that forcible expulsion suspension decision has created. Nor Tsulaia has exact information on problems, but backs the abolition idea anyway. None of the objector organizations has managed to conduct even small research and show to the society what cruelty the abolition of forcible eviction practice has brought. Considerations as if this law would make mortgage loans more expensive and complicate procedures for their issuance and provoke economic collapse turned out incompetent, because neither mortgage loans have risen in value nor problems arose in the economy.

Vakhtang Khmaladze, chairman of parliament’;s committee for legal issues, has different position concerning the issue. In due time, all remarks by Association of Banks were dismissed, but the association members continue misleading the society deliberately, Khmaladze said.

It is fraudulent assertions as if abolition of forcible expulsion practice had brought negative results, he added.

“What are losses of commercial banks? They lie as if commercial banks are entitled to sell mortgaged apartment if the client fails to pay the loan. Previously, when forcible expulsion practice ran, commercial banks were to apply to court and put up the property for auction”, Khmaladze said.

In due time even President Giorgi Margvelashvili backed the bill, while he tries to act as business sector protector.

“We believe that this decision serves the idea of strengthening legal statehood and establishing national order and also serves plans for introducing European standards and practice”, President’s parliamentary secretary Giorgi Kverenchkhiladze said.

It should be noted that it is world practice to delegate these competences to the court, but this initiative was rejected by many objectors, especially in the banking sector, while the bill supporters noted that commercial banks were confused, because mortgaged property sales procedures would be complicated after suspension of forcible expulsion practice.

A part of experts and businessmen noted that suspension of forcible expulsion would make commercial banks to make focus  on not sales of mortgaged property, but on banking services.

Finally, it should be noted that in all European countries and in any developed countries of the world, nobody is authorized to expel anybody from residential space without court decision. Moreover, a great number of regulations determine property mortgaging aspects. For example, property cannot be mortgaged if underage children live there and they do not have alternative residential space and so on. Thus, in all developed countries it is the court’s prerogative to pass decision on expulsion of citizens from apartments. The existing legislation may be improved, but full restoration of forcible expulsion practice will be manifest throwback to the past.

Forcible expulsion practice nourished the interests of commercial banks to issue loans to insolvent clients, because they could receive much more financial benefits. As a result, amid 2008-2009 financial crisis commercial banks appropriated 40 times more property. And today we have unusual situation, when commercial banks possess much more real estate than developers or other profile businesses.

By Merab Janiashvili
Economic Analyst
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