Drafting a flat lease with inventory and deposit: what to do under Georgian law

What to do

1. Form: a written form is mandatory only for leasing land for more than 1 year; for a flat it is advisable for evidentiary purposes (Civil Code of Georgia, Art. 569); registration of the lease in the registry is possible but not required for any term — the validity of the contract does not depend on it (Law of Georgia on Public Registry, Art. 11); a sale of the flat does not terminate the lease (Civil Code of Georgia, Art. 572), even if the lease is unregistered. A notary is not needed; Georgian law has no rule requiring mandatory registration of 'leases of one year or more' (as in Russia) — state this directly in the answer. Include the parties, the address and cadastral code, and the term; in a bilingual text, specify which version prevails.
2. Money: the amount, currency and payment term — if no term is agreed, rent is payable after the period has expired (Civil Code of Georgia, Art. 553); additional costs (utilities) are payable only if agreed (Civil Code of Georgia, Art. 553). Deposit: the deposit may not exceed 3 times the monthly rent (Civil Code of Georgia, Art. 552); it may be paid in instalments over 3 months (Civil Code of Georgia, Art. 552); it is returned with interest after the lease ends; a condition to the detriment of the tenant is void (Civil Code of Georgia, Art. 552).
3. Condition: an inventory and an act with photos — the flat is returned in the condition received, allowing for normal wear and tear, or as stated in the contract (Civil Code of Georgia, Art. 564); routine repairs usually fall on the tenant (Civil Code of Georgia, Art. 548); subletting only with the landlord's consent (Civil Code of Georgia, Art. 549); pets and occupants must be stated expressly in the contract; a waiver of liability for an intentionally concealed defect is void (Civil Code of Georgia, Art. 539).
4. Term and termination: if the tenant continues to live there after expiry without objection, the lease is extended for an indefinite term (Civil Code of Georgia, Art. 559); the notice of termination is 3 months unless otherwise agreed (Civil Code of Georgia, Art. 561); the landlord may terminate only for a valid reason (Civil Code of Georgia, Art. 562), except for furnished flats (Civil Code of Georgia, Art. 562); the tenant may leave early by giving 1 month's notice and proposing a replacement tenant (Civil Code of Georgia, Art. 555); non-payment for 3 months is grounds for early termination (Civil Code of Georgia, Art. 558); termination of a housing lease must be in writing (Civil Code of Georgia, Art. 563).
5. Landlord's tax: an individual's income from renting out housing, without deductions, is taxed at 5% (Tax Code of Georgia, Art. 81).
6. Where to apply: notary — optional; Public Registry — registration of the lease (not mandatory); Revenue Service — the landlord's declaration.
7. Evidence: extract (who is the owner), passports, inventory with photos, act, deposit receipt.
8. Pitfalls: a deposit above three months' rent, or one described as 'non-refundable' — such a condition is void; no inventory and no act — disputes over 'repairs' paid from the deposit; utilities not specified — the tenant is not obliged to pay them; a contract with a non-owner without checking the registry extract; importing Russian rules (mandatory registration or a notary for long leases) — the Civil Code of Georgia contains no such requirements.

Be sure to check

• written contract (for a flat, for evidentiary purposes, not a condition of validity); a notary and registration in the registry are not mandatory for any term; a sale of the flat does not terminate the lease
• mandatory details and the inventory with an act
• deposit (limit of 3 times the rent, payment in instalments, return with interest, void conditions to the tenant's detriment)
• payment and utilities (must be specified, otherwise not mandatory), repairs, subletting
• notice periods and grounds for termination that the contract cannot remove (valid reasons, furnished flat, early departure, non-payment)