Risks of buying property in Georgia: resale, new builds, land, money

Risks of buying property in Georgia: where they really are

The risks of buying property in Georgia are most often linked not to the law but to speed and trust. Ownership passes at the moment of registration at the Public Registry, the deal fits into a single day, and many people sign the agreement without reading it to the end or pay a deposit without getting an extract. Below are the risks we see most often in Batumi and how each of them is closed off before payment. Most are found within a few days of checking. How registration of ownership itself works is on the Public Registry registration page.

Risks by type of property

Resale: the seller and the apartment's past

In resale the main risk lies with the seller. The apartment may belong to several people, have been bought during a marriage, or have passed by an inheritance that was not fully registered. A representative's power of attorney may not give the right to receive money. An apartment can carry debts for electricity, gas and water that the new owner then has to settle unless the agreement covers it. We also ask who lives in the apartment now: a tenant with a lease may stay after the sale. How we read the documents is on the property document check page.

New builds: money before the apartment exists

When you buy during construction, you are paying for something that does not yet exist. Until the building is completed, the apartment is not in the registry, and your protection is the agreement and the developer check. The risks: the building is completed later than promised or construction stops, storeys are built beyond the permit, the apartment is handed over in a frame the parties understand differently, the actual area is smaller than in the agreement. An interest-free instalment plan is convenient, but it also means money goes to the developer long before you get the keys. More on the developer check page.

Land and houses

A foreigner cannot buy agricultural land, apart from narrow exceptions such as inheritance. For a house in Gonio, Chakvi or Makhinjauri this matters: some plots are listed as agricultural in the extract. Besides the category, we look at the cadastral boundaries, road access, structures standing on the plot without registration, and whether water and power can be connected. For some plots in Adjara the cadastral data are still being clarified, and that is worth allowing for in the timing of the deal.

Money and payments

The most unpleasant risk concerns the money itself. The deposit is paid to an intermediary rather than the owner. Cash is handed over without a receipt. Money is sent to an account named by someone on a messenger app. The rule is simple: money goes by bank transfer and only to the person registered as owner in the extract, according to the scheme written into the agreement. If the parties do not trust each other, the money can be passed through a notary deposit: the notary releases it to the seller after your ownership is registered. Keep the bank confirmation of every payment together with the agreement.

Income promises

Many apartments by the sea are sold with a promise of income: "ten per cent a year", "rental with a guarantee". Such a figure is usually calculated from the summer nightly rate and before costs: cleaning, platform commissions, management, utilities and tax. An income guarantee works as long as the company that gave it is working. We calculate the income of your apartment month by month down to the net amount and show every item; more in the property investment section.

The condition of the apartment and the climate

Batumi is humid: rainfall is over 2 400 mm a year and humidity rarely drops below 70 %. An apartment without working ventilation quickly gets damp, and fresh pre-sale renovation easily hides signs of leaks and mould. By the sea, metal on balconies and facades rusts faster. So an engineer goes to the apartment together with the lawyer: checks the ventilation, windows, wiring and signs of water, and in an old building also the roof and risers.

How much a pre-purchase check costs

A legal due diligence check of a property costs from 960 ₾, a developer check with visits to the site and completed buildings from 1 200 ₾. A technical inspection of an apartment by an engineer from 480 ₾, of a house with land from 1 200 ₾, valuation by an accredited appraiser from 330 ₾. The final cost is set after reviewing the property and agreeing the scope of the check.