Apartments in the mountain. A story of one transaction. Part 2

Apartments in the mountain. A story of one transaction. Part 2

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So, we found an encumbrance of apartments in favor of the bank, and not a word about the encumbrance in favor of our buyers.

From the legal point of view, this seems legitimate: while apartments are owned by the developer, they have the right to the right to dispose of them at their discretion. Seller has confirmed that with an unusually quick reaction to our reasonable question “What is going on?!” Seller’s manager with a professional smile replied: “The bank will lift the encumbrance the moment the buyer signs and register ownership of the apartment. It will take a few days, but we have ever experienced any problems.

 Let’s stop for a minute and look closer on that situation. Our client has no relationship with the bank. Bank has no obligations towards him, and it is still uncertain whether the client’s money, which he paid to the developer, will reach the bank. And again, law is law, but get a mortgage on a sold apartment and get the money twice?! And again, buyers were promised apartments in a commissioned building. Seriously? But in the register records nice and clear — the right of ownership of the developer for apartments in a building under construction… In general, there are a lot of legal questions about subject of the transaction. Ok, let’s check the seller – no surprises – it’s Seller!

While we were busy with legal analysis, our clients rushed to Gudauri to see their long-waited for apartments and resort readiness for the upcoming ski season. So, they are in Gudauri, at the foot of the slopes of the Caucasus ridge, the sun and mountain air… Hold on tight, at the end of the road you will be completely immersed and mesmerized by the examples of Seller’s construction approach and quality.

As you may know, the New Gudauri project is located right next to the gondola lift and includes several buildings, restaurants, SPAs, casinos, shops, equipment rental and other necessary and fun attributes of a ski resort. Each building has its own, but largely similar fate, and the problems of the owners are much similar to each other. In our case, we are talking about apartments in the Atrium – the building, which is located higher than the other buildings and to the right of the gondola, has a view the gondola lift, directly ski-in / ski-out access to the slopes, as well as the promised restaurant, outdoor and indoor pool, SPA, reception and so on. All the extras we have listed were in the picture, the project that Seller sold, but in the preliminary contract of sale, which was signed initially and under which payment was made, there wasn’t a word about it… If there isn’t any, we’ll have to do without, as people say — the absence of the above mentioned features does not constitute a ground for claims related with their non-existence.

Our clients try to stay positive and continue their way directly to the apartments, where Seller made the fit-out, and where they are sure of what they wanted and demanded! Door opens with quite an effort: at first, the keys did not match, then the door opened only half way through. And clients entered the troll’s cave… Water is dripping from the walls, there are cracks on the walls, floor is swollen, mold is in the bathroom. Yes, they knew that not everything will be ideal, and have had their fair amount of stress about it, but seriously, guys, what they saw was too much. “This is no good, we will highlight the flaws and record them in front of the Seller’s representative” – remembering my words, the future owners called Seller representative.

Half an hour passed while waiting for someone to show up and resolve the issue. Every comment was recorded, and pictures were made of things that did not meet expectations, so we have proof to support our official claim. After an upsetting and long day in Gudauri our clients returned to Tbilisi to calculate the damage cost. In that case everything needed to be taken into account because the signing of the contract and its registration at the Public Register was scheduled for the next day, and the day after that it was time for our clients to fly home!

Having collected the evidence – legal and factual – in the evening we hold the meeting and decided on our next steps. Fortunately, we received a sale-purchase agreement from Seller 10 minutes before the end of the working day– the agreement that is to be signed the next day! “Well, there everything should be exact articles on the procedure for eliminating the identified shortcomings and about the warranty period, and pay out of the penalties to the buyers, and, in general, everything we assumed was taken into account! What we read in the agreement?..