22.05.2007 Preemptive Right of Lease Holders of Privately-owned Agricultural Land Parcels has been Canceled

On June 22, this year, Parliament of Georgia amended the Law on Agricultural Land Ownership. According to these amendments preemptive right of the lease holder of privately-owned agricultural land has been abolished. In particular, the amendment canceled Article 10 of the said law which says that “1. In selling an estate (family) household, the lessee shall exercise the preemptive right if he/she runs the household himself. 2. In selling an agricultural land parcel, the lessee shall exercise the preemptive right. If the lessee refuses to buy the land parcel, the owner or/and lessee of the adjoining land parcel shall have the pre-emptive right to the land parcel under question”.

This amendment does not deal with the lease holders of state-owned agricultural land, whose preemptive right is provided for by the Law of Georgia on Privatization of State-owned Agricultural Land.

The said amendments also abolished preemptive right of the share in common property and penalties imposed on the owner who had failed to cultivate land, as well as the provision that prohibited the transfer of the land parcel if the area remaining after such transfer was less than 5 ha.

The said amendments restrict the property right of foreign citizens and legal entities registered in foreign countries. In particular, foreign citizen or legal entity registered in foreign country must transfer the owned agricultural land parcel to the citizen of Georgia, household or legal entity registered in Georgia within the 6 (six) months as from the arising property right to this land parcel. If the foreign citizen or legal entity registered in foreign country breaks this provision, agricultural land parcel will be confiscated and transferred to the state on the bases of court decision and after the payment of due compensation.

The said amendments aimed to cancel the provisions restricting the property rights of land/real estate owners and optimize legal environment regulating land ownership.

Amendemnts to the Law on Agricultural Land Ownership shall be enacted as from the date of its publication.