Home · Explainers

Explainers

What to check before buying a flat in Georgia

This is for people buying a home in Georgia - to live in, to let, or as an investment. It does not replace a check on a specific property: every flat has its own history, and the risk usually sits where nobody looked. What it does show is what a check consists of and which questions a buyer generally has to put to the seller, the developer and the agent before any money changes hands.

The overall logic is simple. With resale property the risk more often lies in the history of title - who became the owner, when and on what basis. With a new development the risk lies in performance of an obligation - will it be built, on time, and as described. The two call for different checks.

The register extract: where every check begins

Data in Georgia's Public Registry is open: information about a property is available to anyone who asks, with no need to show an interest. In practice the extract is ordered by the property's cadastral code - searching by address alone is limited and unreliable, so the cadastral code is the first thing to request from the seller or agent. It is the extract, not the listing and not verbal assurances, that serves as the starting point.

What is examined in the extract:

• the cadastral code and address - they must match the property you were shown;
• the type and permitted use recorded in the register - the recorded use may differ from how the property is advertised; utility tariffs, the ability to pledge it and some administrative questions all follow from the entry, so the register's wording is checked word for word, not against the seller's description;
• the floor area - any difference from the listing or from an actual measurement needs explaining;
• the owner and the date the title arose - very recent title, where the seller bought not long ago, is a reason to look at the previous transaction;
• the basis of title - purchase, inheritance, gift, privatisation, court decision; inheritance and gift more often give ground for later disputes;
• the section on encumbrances and restrictions - the key part, covered below;
• notes on court disputes and on applications under consideration;
• details of rights to the land under the building and of the share in common property - a flat in a block carries more than the premises themselves, and the extent of those rights is visible from documents rather than from what the seller says.

An extract reflects the position at the moment it was issued. One ordered a month ago confirms nothing. Common practice is a fresh extract before signing and another check on the day of the transaction itself.

Encumbrances, attachments and disputes

The encumbrances section may show:

• a mortgage to a bank or a private lender;
• an attachment imposed in enforcement proceedings or by court order;
• tax restrictions;
• registered rights of use - a long lease, a usufruct;
• easements;
• restrictions connected with an estate.

A mortgage does not in itself make the transaction impossible: deals in which the seller's loan is repaid out of the buyer's money do occur on the market. But that is a three-sided arrangement in which the order and sequence of steps is agreed with the bank in advance, and the bank is entitled to refuse the arrangement or to set its own conditions - timing, form of payment, requirements as to accounts. Until the bank's position is known, a transaction of this kind is an assumption, not a plan.

An attachment is a heavier matter. In practice the transaction is not carried out until the attachment is lifted and the lifting is reflected in the register; promises to "clear it tomorrow" are no substitute for a register entry. Arrangements do exist in which an attachment is lifted as part of the settlement, but they are built around the particular proceedings and creditor, not from a general template. The same applies to registered leases and usufructs: the buyer takes the flat together with that right.

Separately from the register, court and enforcement proceedings against the seller are checked: a dispute the register does not yet know about can end in an attachment after the buyer has paid a deposit.

Lawfulness of the building and of alterations

The second most common source of trouble is a mismatch between what is registered and what was actually built.

Typical cases: walls moved or removed, a balcony or loggia absorbed into a room, flats combined, wet areas relocated, an added storey or attic conversion, a glazed extension. In Tbilisi's older stock, add to this the additions and extensions of earlier years, whose legal status is not always obvious from the documents.

What this means for the buyer:

• a bank may refuse a mortgage or refuse to take the property as security;
• the municipality may require the premises to be restored to the documented state and impose penalties;
• on resale the same question arises, but now directed at you as the seller;
• interference with load-bearing structures is also a safety question, not only a paperwork one.

The usual order of checks: the plan from the register is compared against the actual layout, and where there is doubt a technical specialist is brought in. For older stock and buildings showing signs of rebuilding, a technical and seismic inspection is added - legal cleanliness and the physical condition of a building are assessed separately from each other.

Legalising alterations already carried out is possible in some cases, but the conditions and procedure are set by municipal rules that are revised periodically, and the outcome depends on the nature of the alterations themselves. It is a separate procedure with an uncertain outcome and timescale, and whether it applies to a particular flat is established at the city hall before the transaction, not after it.

A new development versus resale

When buying in a building under construction, what the contract covers is usually not a finished flat but the developer's obligation to hand one over in the future. Georgia has essentially no special regulation of off-plan construction comparable to buyer-protection regimes in some other jurisdictions: the law provides no automatic banking protection for the buyer's money, and how funds are held, transferred and returned is determined by the contract. It is the text of the contract that carries legal weight, not the project's marketing material.

What is checked before signing:

• the construction permit and whether it matches what is actually being built (number of storeys, footprint);
• the status of the land plot - whether the developer owns it or holds it under a right of use, and whether it carries encumbrances;
• the developer's legal entity - who exactly is the party to the contract, whether that company has completed projects, whether it differs from the "brand" in the advertising, and whether it faces court or enforcement proceedings;
• the stage of the project and the procedure for commissioning the building, after which the flats are registered as properties in their own right.

How a new-build buyer's rights are recorded

The claim that "there is nothing in the register" until the building is commissioned is wrong. Georgian registration law allows registration of construction in progress, as well as registration of conditional ownership (contingent on an event) and of entries recording the buyer's rights under the contract with the developer. This is the main protective instrument available to a buyer of off-plan housing: it makes the claim visible to third parties and complicates any disposal of the property behind the buyer's back.

Which mechanism applies depends on the stage of the project, on how the developer's rights to the plot are documented and on the wording of the contract. A developer's willingness to register in this way is a matter for negotiation rather than a guaranteed right of the buyer, so it is raised before the contract is signed, while the parties' positions are still open.

What to look at in the developer's contract itself

• What is being handed over. Terms such as "frame", "white frame", "green frame" are not defined by law - they are market vocabulary, and different developers fill them differently. What carries legal weight is only the list of works, materials and engineering solutions expressly set out in the contract and its annexes.
• The permitted variance in floor area and the mechanism for recalculating the price in both directions.
• The handover deadline and liability for delay.
• The procedure for termination and return of sums paid, including where construction stops.
• Who pays for utility connections, documentation and registration.
• The payment schedule and how it is tied to construction stages.

What is checked about the seller

It is not only the property that is checked, but the person across the table.

• Identity and identity document, and that the details match the register entry.
• A representative under a power of attorney - the scope of authority (the right to sign the contract and the right to receive money are different things), its term, its validity on the day of the transaction, and whether it can be confirmed with the notary who issued it. A power of attorney issued abroad additionally requires legalisation or an apostille and translation.
• A spouse's consent is not required. A question almost every buyer from Russia asks: in Georgia the consent of the seller's spouse is not needed to sell property. The person recorded as owner in the register disposes of it. If there are several owners, they all sign the contract - but as co-owners, not by way of spousal consent.
• Minor owners, inherited title, recent gifts - situations where later challenges are more likely.
• A seller that is a company - the signatory's authority, the corporate resolutions required, and the absence of signs of insolvency.
• Enforcement and court proceedings against the seller - even where no attachment exists yet, one may appear.

Utility arrears and building costs

Before the transaction, certificates are requested confirming no arrears for electricity, gas, water and refuse collection, and for building maintenance contributions. Utility accounts are transferred to the new owner - a separate step that is often forgotten.

From the building management or owners' association it is usual to establish: the regular contribution, any arrears on the particular flat, and major expenditure already planned - facade or roof repairs, lift replacement.

How liability for the previous owner's debts to suppliers and to the association is allocated depends on the type of payment, the association's statutes and the terms of the supply contract, rather than on any single general rule. That does not change the practical side: settling matters with the building and the suppliers after the transaction falls to the new owner, and buyers usually raise this while terms are being agreed, not after moving in.

From preliminary contract to registration of title

The preliminary contract and the deposit. The form requirements for a preliminary contract are established separately - they determine whether the agreement will be enforceable. This matters, because "a receipt from the agent" or cash handed over without a document evidences neither an agreement with the seller nor that the money reached the seller at all.

A preliminary contract usually records: the parties, the property by cadastral code, the price and currency, the deadline for the main transaction, and what happens to the sum paid if either side withdraws. The key point of negotiation is the consequence of the check revealing an encumbrance, an attachment or a discrepancy in area: the return of the sum paid in that situation does not follow automatically from the law - it works only if expressly written into the contract, and the seller may not agree to such a term. An advance and a deposit carry different consequences if the deal falls through - the wording here is not decoration but an allocation of risk.

The transaction itself. A contract for the sale of property is made in writing, and the parties' signatures alone are not enough: signatures have to be certified - by a notary or by an authorised officer of the registering authority. Ownership passes not on signature but on registration in the register.

Registration of property rights is handled by the National Agency of Public Registry; the House of Justice (Public Service Hall) acts as the front office through which documents are accepted - applications may also be filed through authorised persons. Different tariffs apply depending on urgency: the state fees and the timescales for each tariff are set by regulation and revised periodically, so the current figures are confirmed on the date of the application.

Practical points:

• The language of the contract. Registration requires a Georgian-language version of the document. The parties may draw the contract up bilingually, and if the buyer does not read Georgian, what matters is an accurate translation and understanding every clause before signing rather than after. Where the versions differ, it matters which one the contract names as prevailing.
• The payment arrangements. When the money changes hands relative to when registration happens determines who carries the risk. Besides a direct payment there are mechanisms with an intermediary - a notary's escrow, a bank letter of credit and similar instruments under which the money is released to the seller once an agreed condition is met. Whether each is available is decided by the notary or the bank under their own rules, not by the parties' agreement alone.
• Currency. The price is often expressed in a foreign currency, while domestic settlements have their own rules and are frequently made in lari. The exchange rate, the date on which it is fixed and which side bears the currency difference are a matter for agreement in their own right; the absence of such a clause regularly leads to disputes about the amount payable.
• Bank compliance. On a large payment the bank is entitled to request documents on the source of funds, and its review does not follow the transaction's timetable. This stage is factored into the dates alongside registration.
• Foreign buyers. Acquisition of residential property by foreign nationals in Georgia is permitted as a general rule; a special regime applies to agricultural land. If a land plot passes with the property, whether restrictions apply is checked separately for that particular plot.
• Tax around the transaction. The taxes around a transaction differ from what buyers from a number of other jurisdictions are used to and are clarified before the deal; in particular there is property tax, taxation of rental income and of a later sale, and in certain cases exemptions tied to the length of ownership. Rates, thresholds and conditions are set by tax legislation and revised periodically, and the outcome also depends on the buyer's own tax status, so the tax side is worked out separately and on a current date.
• After registration. The usual closing step is to order a fresh extract and confirm that you are recorded as the owner and that no unexpected entries have appeared.

What to prepare for the consultation

For the conversation with a lawyer to be substantive, the following are usually needed:

1. The cadastral code of the property (or the exact address with the flat number).
2. The register extract, if you already have one - with its date of issue.
3. The seller's documents: a copy of the identity document, the representative's power of attorney, and for a company its registration details.
4. The seller's title document : contract, certificate of inheritance, court decision.
5. Layout documents and photographs of the actual layout, particularly if the renovation involved changes.
6. The draft contract - preliminary or main - exactly as the other side sent it.
7. For a new development: the name of the developer's legal entity, the construction permit, the contract with all annexes and the payment schedule.
8. Utility certificates and a contact for the building manager or owners' association.
9. Your own particulars: whether a mortgage is planned, from what funds and in what currency you will pay, and whether you need to let the property, resell it within a foreseeable period, or register at the address.
10. Timing: when a deposit is expected from you and when the transaction is planned. That determines what a lawyer can check in time and what they cannot.

This material is for reference and information. It is not legal advice, does not take account of the circumstances of a particular transaction or property, and does not create a lawyer-client relationship between the reader and Kanon Georgia. It should not be relied on in carrying out a transaction or deciding whether to. Georgian legislation and administrative and banking practice change, so information about procedures, fees, taxes and requirements is given as at the date of publication and is re-checked at the time of your enquiry. Assessing a particular property and preparing a transaction requires separate work by a lawyer on the documents.