Instalment plan in Georgia: a price paid in parts on fixed dates
An instalment plan (განვადება) is an agreement under which the buyer pays the price of a property in parts on dates fixed in advance, instead of in one sum at signing.
The Civil Code of Georgia has a chapter on "sale with payment by instalments" (ნასყიდობა გადახდის განვადებით), Articles 505 to 508. Under Article 505 of the Civil Code (current Georgian text, consolidated to 25 June 2026) the seller must hand the thing over before the price is paid, and the buyer pays in parts at set intervals. Article 378 adds that a debtor may perform in parts only if the creditor agrees, so instalments exist only by contract.
The word covers two opposite deals. The Code's version fits a finished flat handed over while part of the price is owed. The plan most foreign buyers meet runs the other way: the buyer pays a developer for a flat that does not yet exist. Buyers who know the phrase from retail credit at home may expect a regulated loan with a disclosed rate; a Georgian developer plan is a payment schedule in a contract with the seller, outside the National Bank's lending rules. Market terms and risks are in our guide to developer instalment plans.
What Articles 505 to 508 require of an instalment sale
Where the chapter applies, the contract must be in writing and must state the cash price ("ნაღდი გადახდის ოდენობა"), the amount and date of each instalment, and the annual interest rate, and the seller must give the buyer a copy of the sale documents (Article 506).
| Article | Rule |
|---|---|
| 505 | Handover first, price paid in parts |
| 505-1(1) | An entrepreneur seller is bound by the Article 625 limits on interest, commission, penalties and any other financial sanction |
| 505-1(2) | If the buyer's total obligations to the same seller do not exceed GEL 200,000, the price may not be pegged or indexed to a foreign currency in any form |
| 506 | Written form and the three required terms |
| 507 | If Article 506 is breached, the contract is deemed concluded at handover and only the price is owed, without interest |
| 508 | If the seller has reserved a right to withdraw when the buyer fails to perform, on withdrawal both sides return what they received; "ამის საწინააღმდეგო შეთანხმება ბათილია" (an agreement to the contrary is void) |
Article 505-1 was inserted by Law No 239 of 29 December 2016, published on 13 January 2017, as BDO Georgia's legal newsletter reported, and amended twice in 2018. At the National Bank rate of 2.5976 lari per dollar on 22 October 2026, GEL 200,000 is about USD 77,000, by our calculation.
The imported Article 625 limits are an effective annual rate of at most 50%, penalties and commissions of at most 0.27% of the outstanding principal a day, all charges during a delay at most 1.5 times that principal, and an early-repayment fee of at most 2% of the outstanding principal. How they work when the "principal" is an unpaid price is not confirmed. A penalty needs written form (Article 418(2)), and a court may reduce a disproportionately high one (Article 420).
Off-plan developer plans: the question the Code leaves open
An off-plan buyer pays first and gets the flat later, the reverse of Article 505. Whether Articles 505 to 508 reach such a plan is not confirmed; we found no court decision (search of 1 November 2026). If they did, the cash price and annual rate would be required terms, Article 625 would cap a business seller's late-payment penalties, a cancel-and-keep clause would clash with Article 508, and up to GEL 200,000 the price could not be pegged to the dollar. We do not say that a dollar-priced developer plan is unlawful; get your lawyer's written view. For a finished flat handed over before the last payment, the chapter fits plainly.
Either way, a flat changes owner only on registration in the Public Registry (Article 183(1)). A preliminary ownership right to a unit under construction can be registered for GEL 150 (4 working days), GEL 270 or GEL 350; it is free only in the occupied territories.
National Bank Order No 44/04 of 13 March 2020 on lending to natural persons covers "lending organisations": banks, microbanks, credit unions, microfinance organisations, lending entities and payment service providers (Article 2(1)(a) of its Regulation). Developers are not listed. Yet a borrower's total obligations, as shown in the credit bureau, include debts to "შიდა განვადების გამცემი პირები", persons granting internal instalments (Article 2(1)(k)), so a bank's payment-to-income test counts a plan the bureau records. Order No 217/04 of 27 September 2018 defines the lending entities that must register as persons to whom more than 20 natural persons at once owe a loan or credit obligation; it does not mention developers, and we found no National Bank statement treating an unpaid plan price as such a loan.
How much of the market runs on developer plans
Galt & Taggart's survey of more than 100 Tbilisi projects, about half the primary market, reports that most sales use developers' inner instalment schemes. In July 2026 it found these shares already sold:
| Completion year | Share sold |
|---|---|
| 2025 | 94% |
| 2026 | 79% |
| 2027 | 66% |
| 2028 to 2029 | 59% |
The National Bank's Financial Stability Report 2024 named in-house instalments a market-risk factor. Former Vice Governor Otar Nadaraia told Sovanews on 8 October 2026 that the plans are "quasi-mortgages": "There is no regulation there, and I believe this presents a major issue." Around 2019 (date not confirmed), cbw.ge quoted the Georgian Developers Association's director: "Commercial banks should not build and developers should not lend".
Where a consumer credit finances the balance and the lender used the seller's participation in preparing or concluding it, Article 370 treats sale and credit as one economic unit, so a defence against the seller that would justify refusing performance can justify refusing repayment; its reach in a given case is not confirmed.
How a plan reads in a contract, a listing and an advert
The Code speaks of "განვადებით ნასყიდობის ხელშეკრულება" (instalment sale contract) and "წლიური პროცენტის ოდენობა" (annual interest). A developer contract is usually framed as the sale of a future flat, with the payment schedule, "გადახდის გრაფიკი", as an annex beside clauses on penalties (პირგასამტეხლო) and termination; see our developer contract guide. We found no published sample contract.
| Where | Wording shown | Not stated |
|---|---|---|
| Orbi Group, Orbi Millennium, Batumi | "a flexible 12-month in-house installment plan", "an initial payment of only $4,000" | Interest, cash discount |
| Korter.ge, Nev-Bat Group, Batumi | "30% down payment", "up to 3 years 10 month loan term" | Cash price, rate |
| Realting.com, Batumi Island (updated 18 November 2025) | "PV 20%", "At 100% payment - 5% discount" | Payment dates |
| Realting.com, Gumbati by STRADA (updated 15 August 2026) | "Interest-free installments from the developer" until April 2030 | Cash price |
| Interpressnews advert, Tbilisi Acres, 23 December 2025 | "no down payment" | Length, interest, price |
On Korter.ge only the TBC Bank mortgage block shows an effective rate ("from 8,3%"); the developer's "loan term" is a payment period, not a bank loan.
Worked example: the Batumi Island listing, priced both ways
This out-of-date Realting.com listing illustrates the method only. For one flat, delivered January 2029, it shows "Payment in installments - the cost will be $149,606" and "At 100% payment - 5% discount - the cost will be $142,130", over 36 months with 20% first.
- First payment: USD 29,921.20, leaving USD 119,684.80, or USD 3,324.58 a month if paid equally from month 1; the listing gives no schedule.
- Price of time: USD 149,606 minus USD 142,130 is USD 7,476.
- Implied rate: USD 112,208.80 (cash price less first payment) is in effect borrowed and repaid with USD 119,684.80: 0.353% a month, about 4.3% a year effective, by our calculation.
National Bank averages for July 2026 were 2.52% on new foreign-currency deposits and 7.7% on new foreign-currency mortgages, so this plan sits between the two, with construction risk on top. See our guide to mortgage rates.
If Article 505 applied (not confirmed), Article 506 would require the contract to show USD 142,130 as the cash price, all 36 amounts and dates, and about 4.3% a year. At about GEL 388,600 the price is well above GEL 200,000, so on our reading Article 505-1(2) would not bite. A lawyer should confirm both points.
Instalment plan, instalment sale, mortgage and earnest money compared
| Term | Who is paid | Buyer gets the flat | Main rules |
|---|---|---|---|
| Developer plan (შიდა განვადება) | The developer | After completion and registration | The contract and the general Civil Code |
| Instalment sale (განვადებით ნასყიდობა) | The seller | Before full payment | Civil Code Arts. 505 to 508 |
| Mortgage loan | A bank or other lender | Already owned; it secures the loan | National Bank LTV and PTI rules; lari-only up to GEL 1,000,000, non-citizens exempt |
| Earnest money (ბე) | The other party | Not decided by the payment | Arts. 421 to 423: kept if the giver is at fault, returned double if the receiver is |
The down payment is the first part of the price, paid at signing; the instalments follow it. A preliminary agreement is a promise to sign the sale later, often with a schedule attached; its heading does not decide its legal nature. The bank side is under mortgage.
The term in five languages
| Language | Instalment plan | Instalment sale (Civil Code) |
|---|---|---|
| Georgian | განვადება | განვადებით ნასყიდობა |
| English | instalment plan | instalment sale |
| Russian | рассрочка | купля-продажа с оплатой в рассрочку |
| Hebrew | פריסת תשלומים | מכר בתשלומים |
| Arabic | التقسيط | البيع بالتقسيط |
Georgian sellers and listings say განვადება, often with შიდა (internal) or უპროცენტო (interest-free); the Code's chapter uses განვადებით ნასყიდობა. The Russian legal rendering is ours, not the official translation.
Warning signs in an instalment offer
- Only a monthly figure. Without the cash price the cost is hidden.
- "Interest-free" read as "free". A plan priced above cash has an implied cost.
- A cancel-and-keep clause. At odds with Article 508 where it applies; ask your lawyer about separate penalties.
- Assuming National Bank protection. The National Bank's PTI and LTV limits, rate disclosure and lari-only rule bind lenders, not developers.
- Payments "until the completion of construction". That date can move; see our guide on developer delays.
To be added by the team: scans for the team to add: a redacted payment schedule annex, a listing screenshot showing both a plan price and a cash price, and a redacted extract with a registered preliminary ownership right. Remove names, personal numbers and cadastral codes, and use client papers only with written consent.
Checking an instalment plan step by step
Get two prices in writing
The plan price and the price paid in full.
Work out the implied rate
Use both prices and the schedule.
Read the termination clause
What is returned, and what is kept.
Label every payment
Down payment, instalment or earnest money.
Register the preliminary right
GEL 150 at standard speed.
Plan the last instalment
Cash or a bank offer before you sign.
Frequently asked questions
What does განვადება mean on a Georgian listing?
Paying the price in parts on set dates, usually to the developer during construction.
Does the Civil Code regulate instalment sales?
Yes, in Articles 505 to 508, where handover comes before full payment.
Do those articles apply to off-plan developer plans?
Not confirmed. The buyer pays before delivery, the reverse of Article 505, and we found no court decision.
What must an instalment sale contract state?
The cash price, each instalment with its date, and the annual interest rate, in writing (Article 506).
Can an instalment price be fixed in dollars?
Article 505-1(2) bars foreign-currency pegging in an instalment sale up to GEL 200,000; whether it reaches developer plans is not confirmed.
Is a developer plan a regulated loan?
The National Bank's lending order covers lending organisations; developers are not among them.
Will a bank count my plan when I apply for a mortgage?
Yes, if the plan appears in the credit bureau (Order 44/04, Art. 2(1)(k)).
When do I become the owner?
On registration in the Public Registry (Article 183(1)), not on the last payment.
Sources
- Civil Code of Georgia, consolidated 25 June 2026, Legislative Herald of Georgia, in Georgian (accessed 1 November 2026)
- Legal newsletter, January 2017, BDO Georgia
- National Bank Order No 44/04 on lending to natural persons, in Georgian (accessed 1 November 2026)
- National Bank Order No 217/04 on lending entities, in Georgian (accessed 1 November 2026)
- Who can afford real estate in Tbilisi, Sovanews, 8 October 2026
- A commercial bank is not to build and a developer is not to lend, CBW
- Orbi Millennium and FAQ, Orbi Group
- Zhiuli Shartava Avenue 28, Batumi and Batumi developments with installment plans, Korter.ge
- Batumi Island and Gumbati, STRADA, Realting.com
- Tbilisi Acres advertisement, Interpressnews, 23 December 2025
Change log
- - Glossary entry published from the Civil Code of Georgia, National Bank Orders 44/04 and 217/04, BDO Georgia, Sovanews, CBW, Orbi Group, Korter.ge, Realting.com and Interpressnews.