History of Mortgage Agreement made on Five-Year-Old Child

Salome Chkheidze

Family of Kakhurashvili made mortgage agreement on their five-year old child’s property. Later, they decided to sell the house and cover the rest of the loan this way. That is when the family found out that they did not have right to sell the house or make mortgage agreement on it. Kakhurashvilis think that the mortgage agreement was made unlawfully and plan to submit complaint to the court.

In 2010 Imeda Kakhurashvili took credit from the micro-financial organization Georgia Capital to start business and made mortgage agreement on the apartment situated in #22 Marjanishvili St. in the city of Khashuri. This property was given to the 5-year-old son of Imeda Kakhurashvili Giorgi Kakhurashvili from his grandfather as a present based on the gift agreement. Later, the family started to have financial problems and could not give money back to the micro-financial organization. Georgia Capital submitted complaint against them in the court.

“We had taken 6700 $ in overall and gave back 8 200 $. However they counted that as fines and penalties and are requesting more money – 14 000 GEL. The court decreased this money to 5 thousand GEL and decided that if we do not pay this money, it would be paid by the property of our child,” – Wide of Imeda Kakhurashvili Nana Kakhurashvili states.

The family decided to sell the house and cover the loan in this way. However, it turned out that no notary would agree to sell this house. Kakhurashvili family started to have doubt as to why and how the micro financial organization had right to sell this house when they could not manage to do so. The family could not pay the loan. As a result, micro financial organization sold Giorgi Kakhurashvili’s property on the auction.

“When we addressed Georgian capital they did not clearly explain us the conditions. It looked like they tried to trick us and used our ignorance. Besides, when we were going to make agreement, my wife and I decided to find notary in Khashuri who would confirm authenticity of the agreement. However, representatives of Georgian Capital did not let us go and they brought us to notary Nargiz Mindiashvili who made unlawful agreement” – Nana Kakhurashvili notes.
As the representatives of Center of Social Programs and Development Sopio Beroshvili states, Nana Kakhurashvili addressed their organization last year. After consulting with lawyers it turned out that there were numerous violations in the case:

“Nobody had right to make mortgage agreement on the property of a child that could have resulted in the loss of the apartment. The notary used their ignorance and made agreement which states that Giorgi Kakhurashvili with his own property represents a guarantor for Imeda Kakhurashvili and the legal representative of the child Nana Kakhurashvili signs this agreement. Giorgi was just 5 years old at that time. It is interesting that neither the notary nor the lawyer of Georgian Capital requested the conclusion of the Body of Guardianship and Care which was to determine whether the mortgage agreement could have been made on the child’s property. The notary equated mother and child and made such document. IN reality, the problem now is that the child might lose his house as a result of unlawful document” – Sopio Beroshvili states.

Lawyer of micro financial organization Georgian Capital Tengiz Ekaladze thinks that the mortgage agreement had been made by violating law as part 6 of article 1198 of Civil Code states that parents represent their juvenile child in relations with third people, as well as in the court.

“In this case, parents were representatives of child. We requested consent of both parents and agreement was made in this way. No legal provision requires consent of Body of Guardianship and Care because we are not talking about care and guardianship but with legal representation. Parents do not need any consent to make agreement on behalf of their child. That is why I am repeating one more time that no violation took place neither during making agreement nor during the trials” – Ekaladze states.

Lawyer of Human Rights Center Eka Kobesashvili has a different opinion on this matter. According to her, this mortgage agreement has been made unlawfully as there is no consent of the Body of Care and Guardianship in the case. According to article 1294 of Civil Code, without the consent of this body the legal representatives does not have right to make agreement which regards selling, renting or other financial operation of the child’s property which can cause decrease of child’s property.