From the desks of Givi Pantsulaia and Daniel Klein, this week’s column explores the ease of renting a flat in Georgia.
As we indicated in two recent columns, super low tax rates are available for immigrants in Georgia (see Legal Insights with Klein Law: 1% Tax Rates for Entrepreneurs and Other Georgian Attractive Tax Rates). This, coupled with a very lax regime allowing migrants to stay a year without leaving or getting a visa (see Legal Insights with Klein Law: Renew Georgian Visa with 1-day Departure; Re-Enter for another 365 Days), makes Georgia an inexpensive country to rent an apartment in, and signing a lease is extremely simple.
One Month Security Deposit & a Tenant Friendly Market
Tbilisi, the vibrant capital of Georgia, attracts expatriates and entrepreneurs with its low-tax, low-regulation advantages and rich cultural heritage. If you’ve decided to move to Tbilisi and are curious about rental prices, this guide will provide you with valuable insights into the rental market and the tenant-friendly policies in place.
There are no shortage of great flats available to rent for around $600 per month. In Tbilisi, tenants will be pleased to find out that they are required to pay only one month’s deposit when renting an apartment, and no additional realtor fees are required. This means that the initial financial burden on tenants is relatively lower compared to other cities where additional fees may apply. Renters in general don’t pay brokers fees. As credit rating agencies hardly exist, landlords are not able to perform background checks on renters, but even still they only request a month’s security deposit. In mature markets like the US, a landlord might ask up to 6 months or more as a security deposit for tenants without a local renting history. In addition to that, according to Mr Pantsulaia, “It is not simple to evict non-paying tenants. Technically speaking, the landlord needs to bring a court action which could take a few years to process. Additionally, tenants in Tbilisi benefit from pro-tenant legislation. While this is beneficial for tenants in terms of protection, it’s important to note that, in some cases, it can make it challenging for landlords to urge a tenant to leave the apartment.” Applying to the police is not an option for landlords. While it’s a great place to be a tenant; it’s not that great for landlords.
When renting an apartment in Georgia, it is advisable to have the contract in both Georgian and the language the renter feels comfortable with. It might be worth checking the translation, since the Georgian language part of the contract would apply in case of a dispute. Another tip is that before signing a lease, it is worth checking with the government real estate registry to see that the landlord is indeed the owner. Also, it is advisable to see the landlord’s original passport and to keep a copy.
Opening a Georgian Bank Account
In line with other aspects of setting up in Georgia (see our Column Legal Insights with Klein Law: The Ease of Setting Up a Company in Georgia) it is no surprise that opening a bank account is fast, simple and without cost.
Compared to Yerevan
For Russians, Yerevan is the destination of choice since Russian´s do not need a passport (only a National ID) to live for a long time in Yerevan. As for others, one is only permitted to stay 180 days out of the year cumulatively without a proper visa. Rents in Yerevan tend to be slightly more than in Tbilisi, and renting an apartment is similar in Yerevan in terms of deposit requirements and eviction laws. But taking into account the visa situation, Tbilisi seems more attractive for Westerners.
In conclusion, Georgia is a very attractive destination for those looking for a value for money place to relocate with few hassles relating to renting a flat, visa rules, setting up a company and banking.
By Givi Pantsulaia and Daniel Klein
