Real Estate Litigation 2026 Comparisons

In the Republic of Armenia, the recovery of real property following a default under a loan secured by such property may be carried out through either judicial or non-judicial (extrajudicial) enforcement, primarily depending on the terms of the mortgage agreement․

The non-judicial or extrajudicial process is highly common in modern Armenian banking practice and is triggered if the mortgage contract contains an explicit “power of sale” or extrajudicial realisation clause or there is a written agreement between the pledgee and the pledgor, and if the consent or permission of a third party was required to conclude a pledge agreement, as well as the latter’s written consent to the sale of the pledged property without a court decision. Under this mechanism, the lender provides a formal notification of default to the debtor and the pledgor, allowing a statutory period for the debt to be cured.

If the default remains unresolved, the lender may proceed to sell the property through a public auction or, in certain circumstances, take ownership of the asset directly to satisfy the debt.

Alternatively, the judicial process is mandatory if the security agreement lacks an extrajudicial clause or if there is a legal dispute regarding the underlying debt that necessitates court intervention. In such cases, the lender initiates a civil lawsuit to obtain a judgment for the foreclosure and sale of the property. Once the court issues a final and binding decision, a writ of execution is granted to the Compulsory Enforcement Service.

Ultimately, the choice between a judicial or non-judicial path in Armenia is a matter of contractual negotiation at the time the loan is issued, with the non-judicial route offering a significantly more streamlined and cost-effective timeline for the creditor.

A lender may foreclose on a company participant’s equity only on the basis of a court judgment.

The process is as follows: the company must first offer the participant’s share to the other participant. If the other participants do not exercise this right within one month, the company itself may acquire the share and pay its value to the creditor. If the company does not exercise this right within one month, the share is enforced through a public auction.

If the share is not sold at auction within one month, the company may allocate property corresponding to the value of the share from its charter capital to satisfy the creditor’s claim.

This process ensures judicial supervision, pre-emption rights for other participants, and orderly enforcement of the creditor’s claims.

Under Armenian law, for non-judicial enforcement of a pledge, the notice must be delivered to the pledgor and, if different, the debtor. After delivery, the pledgee may sell the pledged asset through direct sale or public auction two months later, unless the pledge agreement provides a different procedure. The pledgee may sell the asset earlier if the debtor and pledgor provide written consent following receipt of the notice.

Notice is generally provided in accordance with the pledge agreement. For state registration purposes with the Cadastre Committee, the lender must have either a postal delivery receipt or a pledgee-signed acknowledgement confirming receipt of the notice.

This procedure ensures that the parties are formally informed and have time to respond before non-judicial enforcement.

Under Armenian law, the debtor or a third-party pledgor has the right, at any time before the pledged asset is sold, to terminate the enforcement and sale of the pledged property by fulfilling the secured obligation or paying the portion of the debt that is due.

This right of redemption allows the borrower or pledgor to recover the pledged property and halt non-judicial enforcement, ensuring that enforcement only results in the sale of the collateral if the debt remains unpaid.

Under Armenian law, a lender may enforce both a mortgage over real property and a pledge over the equity of the property-owning company, but only pursuant to separate procedures and court decisions where required. Enforcement of a participant’s equity is strictly judicial and follows the procedure established in the Civil Code and corporate law, including offering the share first to other participants and potentially selling it via public auction. Mortgage foreclosure may be pursued judicially or non-judicially, depending on the terms of the mortgage agreement.

While a lender can pursue both types of enforcement, care must be taken to ensure that the debtor’s right of redemption is not impeded. The debtor retains the right to satisfy the secured obligation before the sale of the property or equity to terminate enforcement and reclaim the asset. Exercising one enforcement path should not prevent the debtor from exercising their redemption rights under the other.

In Armenia, non-judicial foreclosure of a pledged asset generally takes at least 30 days after the notice of seizure is delivered to the pledgor. If the debtor does not fulfill the obligation within this period, the pledgee may sell the asset, typically through public auction, to satisfy the claim. The entire non-judicial process usually takes between one and three months, depending on the method of sale.

By contrast, judicial foreclosure is significantly more time-consuming. Court proceedings to obtain a judgment for foreclosure and enforce the sale of the pledged property can take several years, depending on the complexity of the case and court schedules.

Under Armenian law, if the proceeds from the sale of the pledged property – or the value of the property transferred to the pledgee or a designated person – are insufficient to satisfy the pledgee’s claim, the pledgee is entitled to recover the deficiency from the debtor’s other assets, unless otherwise provided in the pledge agreement.

However, in seeking the deficiency from other assets, the pledgee does not enjoy the preferential rights associated with the original pledge. This ensures that while the lender may recover the remaining debt, enforcement against other assets follows general rules without the priority of the secured claim.

There is no specific company type required by law for joint ventures, including in real estate transactions. In Armenia, the most commonly used form of entity to facilitate joint ventures in connection with real estate transactions are joint-stock companies and limited liability companies. Parties may also structure joint ventures through contractual arrangements without creating a separate legal entity, although this is less common, especially for large-scale developments.

Joint venture or operating agreements in real estate generally require co-operation between the partners, although the legal basis for that co-operation depends on how the joint venture is structured.

If the joint venture is established through a separate legal entity, the partners’ rights and obligations are primarily governed by the charter of that legal entity, together with any shareholders’ or participants’ agreements.

By contrast, if no legal entity is created, the joint venture partners typically become co-owners of the real estate. Their relationship is then governed by:

• the agreements concluded between the co-owners (such as a joint venture or co-ownership agreement); and
• the general rules of the Civil Code applicable to common ownership and contractual obligations.

In both structures, co-operation between the partners is essential, but it is formalised either through the corporate documents of the legal entity or, in the absence of such an entity, through contractual arrangements and the statutory rules on co-ownership.

The duties of the parties involved in a joint venture are determined by the legal regime applicable to the selected company form. Accordingly, the company’s articles of association and any shareholders’ agreements must comply with the relevant rules of company law. In this way, general principles of civil law serve as a framework that translates company law obligations into obligations related to real estate.

If an organisation’s governing documents are silent, vague or allow for a decision-making stalemate, disputes regarding management decisions are generally resolved through negotiation and good-faith discussions between partners. Where informal resolution fails, parties may apply to Armenian courts to resolve the dispute or seek interim measures to allow the venture to continue operating efficiently.

Where a new legal entity has been established, contentious management issues are addressed within the framework governing the chosen company form. Such disputes typically arise within the company’s decision-making bodies, such as the general meeting or the board of directors, and are resolved in accordance with the company’s statutes, any shareholders’ agreements and the relevant provisions of company law. If internal mechanisms fail to provide a resolution, the dispute may ultimately be referred to the courts.

By contrast, where the joint venture has not been constituted as a distinct legal entity, disputes are resolved under general civil law. In such cases, the applicable rules are those governing co-ownership and other relevant proprietary rights, rather than company law.

Under Armenian law, provisions that purport to allow for the automatic entry of a judgment or the automatic granting of provisional remedies (such as injunctions) are generally not enforceable. The issuance of judgments and provisional measures falls within the exclusive competence of the courts and is governed by mandatory provisions of procedural law, which cannot be derogated from by agreement of the parties.

In particular, a court decision becomes legally binding and enforceable only in accordance with the conditions and time limits prescribed by law. Until those conditions are met, judicial acts remain subject to challenge, and the parties’ right to judicial review cannot be waived in advance. Any contractual clause attempting to exclude or limit the right to appeal would therefore be invalid.

Moreover, Armenian procedural law guarantees the right to challenge court decisions before higher judicial instances. Depending on the nature of the judicial act, an appeal may be lodged immediately, or it may be deferred and exercised in the context of an appeal against the final judicial act. This procedural safeguard reflects the principle of due process and the hierarchical structure of judicial review, which parties cannot override through private agreement.

If a joint venture in Armenia has been established as a distinct legal entity, winding it down must comply with the general provisions of the Armenian Civil Code and the relevant company laws, including settlement of obligations, distribution of assets and deregistration procedures.

If the joint venture has not formed a separate legal entity and operates solely under a contractual agreement, its winding down is governed by the terms of that agreement and general principles of Armenian contract law.

The most frequently encountered guarantees in Armenian real estate financing include full or limited principal payment guarantees, under which the guarantor assumes liability for repayment of all or a defined portion of the loan principal.

Interest payment guarantees are also commonly used, particularly during the construction phase or initial operating period of a project, to ensure timely servicing of debt before the property generates sufficient cash flow.

In development projects, completion guarantees are regularly required, obligating the guarantor to ensure completion of construction in accordance with the approved design, budget and timeline.

Armenian law does not provide a specific regulatory framework for non-recourse carve-out (“bad boy”) guarantees. Such guarantees are therefore assessed and enforced under the general rules of civil law, in particular the provisions governing guarantees, contractual obligations and fundamental civil law principles.

In Armenia, developers have a special developer account. Under the agreement for the right to purchase real estate under construction, buyers are required to make payments exclusively to the developer’s special account, where the funds are held in escrow until the completion of the building. This serves as an effective guarantee for buyers, ensuring that in the event the construction is not completed, they incur minimal losses and can recover the amounts paid. The developer’s obligation to maintain a special account is an absolute guarantee, and the parties cannot circumvent it.

There are no specific regulations particularly tailored to guarantee enforcement. However, generally, the Civil Procedure Code of the Republic of Armenia provides for the application of simplified (expedited) judicial procedures in the following cases.

• There is a written agreement between all parties involved in the case to examine the case under the simplified procedure, and no party has objected to examining the case under this procedure within the deadline for filing a response to the claim.
• Before the court issues a decision on the allocation of the burden of proof in the case, no party has objected to the claim or filed a counterclaim.
• As a result of a change in the subject matter of the claim, the claim amount does not exceed AMD5 million.
• The respondent has not filed a response to the claim by the deadline set for submitting the response.

The court of first instance may also examine a case under the simplified procedure in other instances provided by law.

The reasoning section of the judgment issued under the simplified procedure contains a statement regarding the plaintiff’s arguments considered by the court, as well as the court’s reasoning on the allocation of court costs between the parties involved.

As a general rule, to enforce the provisions of a guarantee, the lender must first make a demand on the borrower and exhaust the means available to satisfy the claim from the borrower (including the collateral provided and the borrower’s other assets and funds). Only thereafter, if the loan obligation remains unpaid, may the lender make a demand on the guarantor, unless the guarantee agreement or the applicable law provides that the guarantor is liable on an equal footing with the borrower for the loan obligations.

Arbitration as a method of dispute resolution is not yet widespread in real estate transactions in Armenia. Most real estate agreements are still governed by the courts. However, it is developing rapidly and is increasingly considered a viable and flexible alternative, particularly for commercial real estate disputes.

Advantages of arbitration in real estate transactions in Armenia include faster proceedings compared with state courts, greater confidentiality, flexibility in choosing arbitrators with expertise in real estate and the ability to structure procedural rules to suit the parties’ needs. Arbitration awards are generally final and enforceable internationally.

Disadvantages include higher costs in some cases, limited ability to appeal or challenge awards and potential enforceability issues locally if procedural requirements are not strictly followed,

Mediation is not yet widely used in real estate transactions in Armenia. Most disputes continue to be resolved through state courts and there is limited experience with formal mediation in the real estate sector. Nevertheless, mediation is gradually gaining recognition as an alternative dispute resolution mechanism, particularly for commercial real estate disputes, as it offers a faster, more flexible and confidential way to resolve conflicts compared with traditional litigation.

In Armenia, provisional remedies in real estate disputes most commonly include measures to secure the claim and preserve the status quo of the property pending the resolution of the dispute.

The most frequently used remedy is a prohibition on transactions over the disputed property, which prevents the owner from selling, gifting or pledging the property. The court may also impose a prohibition on actions affecting the property, which restricts the Cadastre Committee from making any registrations that would transfer ownership to another person. Additionally, the court can order a prohibition on specific actions, preventing construction, alterations or other physical activities on the disputed property until the dispute is resolved.

These remedies ensure that the property’s value and ownership status are preserved while the underlying dispute is adjudicated.

To obtain a provisional remedy, a court order is absolutely mandatory. Under Armenian law, a creditor cannot unilaterally “freeze” property or register a prohibition at the Cadastre Committee. Only a judicial act issued by a court of competent jurisdiction serves as a legal basis for the Compulsory Enforcement Service and the Cadastre Committee to restrict the owner’s rights.

A claimant must submit a claim accompanied by a motion to secure the claim, explaining why failure to apply such a measure could later make enforcement of a court decision difficult or impossible.

The authority to grant a provisional remedy rests solely with the court. Only a court order can impose measures such as prohibitions on selling, pledging or altering the disputed property, ensuring that the remedy is legally binding and enforceable.

In Armenia, if a plaintiff improperly seeks or uses a provisional remedy, they may face several risks:

• liability for damages – the plaintiff may be held responsible for any losses suffered by the defendant due to an improperly imposed measure, such as preventing the sale, transfer or use of the property; and
• dismissal of the motion – the court may refuse to grant the provisional remedy if the plaintiff cannot justify its necessity or demonstrates bad faith.

Courts typically grant such injunctions to preserve the status quo of the property, prevent unauthorised transfers, pledges or alterations, and ensure that the eventual enforcement of a judgment is not rendered impossible or significantly more difficult. The injunction is usually issued upon a motion demonstrating the necessity of the measure, the likelihood of success on the merits and potential irreparable harm to the applicant.

In Armenian law, to obtain a provisional remedy such as a temporary or preliminary injunction, the applicant must demonstrate that failure to grant the measure would cause irreparable harm. In real estate disputes, irreparable harm is typically shown where, without intervention, the property could be sold, transferred, encumbered or altered, making it impossible or extremely difficult to restore the applicant’s rights after a final judgment.

The Supreme Court of Armenia, in its precedential rulings, has addressed the particularities of provisional remedies and clarified that the burden of proof for a motion seeking a provisional remedy is lower than that required for the merits of the claim. In other words, a court may grant a provisional remedy where the applicant demonstrates a high probability of the underlying facts, without the need to fully establish each fact as in the main proceedings.

Under Armenian law, there is no legal mechanism equivalent to a “mechanic’s lien”, as known in some other jurisdictions. A contractor, subcontractor or vendor cannot unilaterally place a lien on immovable property without a court order or the owner’s consent. Any claim for payment for work or materials supplied must be pursued through the civil court system.

To enforce such a claim, the creditor may initiate judicial proceedings to obtain a judgment confirming the debt. Once a final judgment is obtained, the creditor can request compulsory enforcement, which may include foreclosure or seizure of the property through the Compulsory Enforcement Service.

In practice, this means that contractors must rely on court judgments rather than self-help liens to secure payment, and foreclosure of the property occurs only after judicial authorisation and proper enforcement procedures.

There is no dedicated regulatory regime in Armenia for private equity firms or institutional investors engaged in the bulk purchase and management of residential units. Instead, disputes and regulatory issues in this area are addressed through general legal frameworks applicable to property ownership, housing relations and civil law.

In practice, the most relevant rules concern housing and condominium regulation, which govern the management of common areas in multi-apartment buildings, relations with homeowners’ associations, the allocation of maintenance costs and decision-making procedures within residential buildings. Where a single investor acquires multiple units in the same building, disputes may arise regarding voting rights, maintenance and financial obligations, or the investor’s role in building management.

In addition, where residential units are leased to individuals who qualify as consumers, consumer protection legislation may apply. This is particularly relevant in disputes involving unfair contractual terms, rent adjustments or the quality of housing-related services.

The public bodies responsible for developing and enforcing the applicable rules depend on the nature of the issue in dispute and may generally include:

• courts of the Republic of Armenia, which are responsible for resolving civil, housing and property-related disputes;
• the State Committee of the Real Estate Cadastre, in matters concerning registration and protection of ownership rights;
• municipal authorities, with respect to local housing management, zoning and building-related issues; and
• the Competition Protection Commission, where bulk acquisitions or management practices raise competition or market dominance concerns.

Public interest considerations play an important role in developments at the intersection of real estate and infrastructure. This is particularly the case for large-scale residential projects in densely populated areas.

In such contexts, the involvement of public authorities – notably municipalities and, where relevant, regional or state authorities – is fundamental. Their role includes the granting of building permits and other approvals, ensuring compliance with mandatory legal requirements throughout the development process and, where applicable, authorising changes in the designated use or purpose of the property.

As a result, ongoing communication with public authorities is often necessary, including with respect to pricing frameworks, development characteristics and the broader social impact of the project. Public interest considerations therefore form an integral part of both the regulatory process and the practical decision-making surrounding residential real estate developments.