Developer payment plan in Batumi: terms, real cost, late payments, assignment

Developer payment plan in Batumi: how it works

A developer payment plan in Batumi is the main way to buy a new-build apartment: you make a down payment and pay the rest on a schedule while the building goes up. Most offers charge no interest, but each developer has its own terms: the size of the down payment, the term, the frequency of payments, the currency. And every payment plan has a cost, even if it is not called interest. A payment plan is convenient because no bank or income check is needed: the agreement is signed directly with the developer. But that agreement is also the only thing protecting you.

What the terms are made of

What a payment plan really costs

Zero per cent in the agreement does not always mean the plan is free. Compare the price for full payment with the price on the plan: if the apartment is cheaper for full payment, the difference is the cost of the plan. It can be compared with the interest on a loan or with what your money earns elsewhere. Sometimes the plan pays off even with such a difference: at an early stage of construction, full payment hands the whole sum to the developer at once. A detailed comparison with a bank loan is on the payment plan or mortgage page.

If you are late with a payment

• what penalties accrue per day or month of delay;
• after how many days of delay the developer can terminate the agreement;
• what part of the money is returned on termination and within what period;
• whether the developer withholds a penalty from the sums paid;
• whether a payment can be postponed by agreement.

These clauses are often written more harshly for the buyer than for the developer. They are worth balancing before signing: if the developer charges you penalties, the same penalty should apply to its late completion.

If the developer is late

The main risk of a payment plan is that you are paying for a building that does not yet exist. If construction is delayed, the payment schedule usually continues. So the agreement needs a specific completion date, a penalty for each month of delay and the right to suspend payments or terminate the agreement if the building stands still. Better still is when payments are tied to construction stages: then you are not paying in advance for floors that do not exist. If construction has stopped for a long time, we look separately at who owns the plot and whether there is a bank mortgage on it: that determines how the project will be rescued. Check the developer before signing; more on the developer check page.

Selling and assignment before full payment

Many people buy on a payment plan in order to sell the apartment before completion at a higher price. This is possible only if the agreement allows assignment: who gives consent, whether there is a fee to the developer, how the payments already made are transferred. If the agreement does not provide for assignment, selling the apartment before full payment and registration will be difficult. This is worth finding out before signing, not when a buyer turns up. We advise a buyer by assignment to check both the seller and the developer: your rights and all your obligations under the schedule pass to them.

When the apartment becomes yours

Ownership is registered after the building is completed, and often only after full payment. In the agreement we look at when and how the developer hands over the apartment against a certificate, who registers ownership and within what period, and what happens if the building is completed while you are still paying. Until ownership is registered, the apartment cannot be mortgaged to a bank or used for a residence permit, and that is worth allowing for in your plans. Handover of the apartment with an engineer is covered on the apartment handover from the developer page, and registration itself on the Public Registry registration page.

How to negotiate better terms

Payment plan terms are negotiable more often than you might think. Developers often accommodate requests on the schedule, the currency, tying payments to stages and a discount for early payment, especially at an early stage of construction. We compare the terms of several developers on the same figures: price, all payments, currency, penalties and what the frame includes, and propose amendments to the agreement before signing. We fix the final terms in writing, not in correspondence with a sales manager.

How much a payment plan review costs

A review of the payment plan agreement with amendments before signing costs from 660 ₾. A developer check covering the company, plot, permit and completed buildings from 1 200 ₾, handover of the finished apartment from 480 ₾, full legal support for the transaction from 2 220 ₾. The final cost is set after reviewing the agreement and agreeing the scope of work.