Pledge in Georgian law: security over movables and rights
A pledge (გირავნობა, giravnoba) is a security right over a movable thing or a transferable right, such as a claim, a company share or a security, that lets the creditor be paid out of that asset ahead of other creditors when the debtor defaults. The rule sits in Article 254 of the Civil Code of Georgia: the object of a pledge is "a debtor's or a third person's movable things and/or intangible property that may be transferred", and the pledgee may be paid "by selling the pledged property or, if the parties so agree, by taking it into ownership".
The Code places two security rights side by side. Its chapter on property as a means of securing a claim opens with a part headed "Pledge", from Article 254, and continues with a part headed "Mortgage", from Article 286. Land, houses and apartments fall under the second part. In legal language a flat in Tbilisi or Batumi is therefore mortgaged (იპოთეკა), never pledged, and a bank loan secured on an apartment appears in the loan agreement and on the extract as a mortgage.
Everyday speech blurs the line. Georgians often say a flat is "in გირაო", and English speakers in Georgia repeat "pledged". Russian adds a second trap: залог is the general word for any security and also covers ипотека. A true pledge concerns something else: furniture, a car, money in an account, company shares or a contractual claim.
Two kinds: the possessory pledge and the registered pledge
Article 255 of the Civil Code knows two forms. In a possessory pledge the thing is handed over to the pledgee or to a person the pledgee names (Article 257). In a registered pledge the thing stays with the pledger, and the right arises only on a written transaction plus registration in the Public Register (Article 258(1)).
| Feature | Possessory pledge | Registered pledge |
|---|---|---|
| Who holds the asset | The pledgee or a person it names | The pledger keeps it |
| How the right arises | Handing over the thing | Written transaction plus registration |
| Where cars are recorded | Not applicable | Service Agency of the Interior Ministry, not NAPR (Art. 258(4)) |
Under Article 258(2) a registered pledge agreement must state its date, the parties and any third-party debtor, a description that identifies the pledged item, and "the maximum sum with which the secured claim is to be satisfied". That ceiling is the figure a buyer or a second lender compares with the value of the asset. In the Georgian text of Article 255 the two forms are მფლობელობითი გირავნობა (possessory) and რეგისტრირებული გირავნობა (registered).
What a pledge secures, how it ranks and how it ends
Article 254 lets a pledge secure a future or contingent claim, a non-monetary claim that can be expressed in money, and even the whole movable property of a person. Property the pledger does not yet own can be pledged too, with priority from registration (254(5)). Under Article 256 the pledge also covers interest, contractual penalties, maintenance, court and sale costs and, unless agreed otherwise, the fruits of the item.
One asset can carry several pledges, ranked by the time each was submitted for registration (Article 267(1)). Article 290 applies the same "first filed" logic to several mortgages on one flat, a point our guide to encumbrances on property covers from the buyer's side.
A pledge ends when the secured claim ends (Article 270), when the item perishes (271), when the pledgee waives it by registration (272(1)) or when the item passes into the pledgee's ownership (273). The shortfall default in Article 276(2) favours the debtor: the claim "shall be deemed to have been satisfied even if the proceeds from the sale of the pledged item are not enough", unless the parties agreed otherwise. For a loan to an individual from a lender outside National Bank supervision, no contrary agreement is allowed (Article 276(3)). Mortgages follow the same pattern (Articles 300(2), 300(2-1), 301(1-1) and 301(1-2)), so a bank's loan contract may still keep the unpaid balance alive.
Under Article 173(2) co-owners may also agree to pledge a commonly owned thing in favour of one of them; see our entry on co-ownership.
A separate registry, separate fees
The National Agency of Public Registry (NAPR) records pledges, finance leases and financial collateral in a registry of movable and intangible property rights, apart from land and buildings, and that registry issues its own extract. NAPR's FAQ describes registration as based on the agreement and/or the applicant's notification. We found no rule requiring notarised signatures on a pledge agreement.
| Service | Fee | Term |
|---|---|---|
| Pledge: registration of origin, change or termination | GEL 39 | Immediately |
| Pledge registry extract, at NAPR | GEL 20 / GEL 75 | 1 working day / same day |
| Pledge registry extract, online | GEL 13 / GEL 52 | 1 working day / same day |
| Mortgage or ownership on a flat, for comparison | GEL 150 / GEL 270 / GEL 350 | 4 working days / 1 working day / same day |
The State's own security uses a related word. The Tax Code calls it a tax lien or mortgage (საგადასახადო გირავნობა/იპოთეკა): it arises with the tax liability and on registration (Article 239(2)), and Article 20 of the Law on the Public Registry keeps a separate registry for it. No agreement creates it, so it is not a pledge in the Civil Code sense.
Where a pledge shows up in a property deal
On a flat's extract (ამონაწერი), security for a debt appears under encumbrances as a mortgage, while seizures and tax liens arrive through Articles 19 and 20 of the registry law. Our registry extract entry and the guide to reading the extract show where those entries sit. A foreign buyer meets a genuine pledge in four places:
- A share deal. When a flat is bought by acquiring the company that owns it, the company's shares or receivables may be pledged to a bank; see buying through a company.
- Contents and vehicles. Furniture, equipment or a car sold with the flat may be pledged to a lender.
- Cash collateral. A bank deposit pledged as security.
- A pawnshop ticket (ლომბარდი), for an item left with a pawnshop.
In contract wording, a pledge must state the maximum secured sum (Article 258(2)(d)), while a mortgage contract may state the secured amount "by agreement" (Article 289(1)). Georgian adverts for loans often say უძრავი ქონების გირაოთი ("secured on real estate") although the instrument is a mortgage; this is common usage we could not tie to a cited source.
Worked example: a flat held by a company whose shares are pledged
This is our illustration, not a real case. A buyer agrees to acquire a flat by buying 100% of the shares in the Georgian LLC that owns it. The flat's extract shows no mortgage. A check of the registry recording the company's shares, however, shows them pledged to a bank, with a maximum secured sum as Article 258(2)(d) requires.
- The pledge ends only when the bank's claim ends or the bank's waiver is registered (Articles 270 and 272(1)).
- A change of shareholder is not among the ways a pledge ends under Articles 270 to 273, so the sale alone does not clear it.
The parties therefore arrange for part of the price to settle the bank first, register the waiver, and only then pay the seller the balance. If the pledge sits in NAPR's movable and intangible property registry, the online extract costs GEL 13 and the waiver registration GEL 39. We could not confirm whether a pledge of LLC shares is recorded there or in the Registry of Entrepreneurs, so ask your lawyer which extract to order. Had the bank's security been on the flat itself, it would be a mortgage on the flat's own extract, cancelled by a registration at GEL 150, GEL 270 or GEL 350.
Pledge, mortgage and tax lien side by side
| Point | Pledge (გირავნობა) | Mortgage (იპოთეკა) | Tax lien (საგადასახადო გირავნობა) |
|---|---|---|---|
| Covers | Movable things and transferable rights | Land and buildings, including flats | Property of the tax debtor |
| Created by | Agreement, plus handing over or registration | Agreement, in force on registration (Art. 289) | The tax liability and registration |
| Recorded in | NAPR movable and intangible property registry | The flat's own registry entry | The registry of tax liens |
| Notary needed | No rule found | Only for a loan from a lender other than a bank, microbank, microfinance organisation, credit union or investment fund | Not applicable |
Andersen Georgia's note of 12 February 2026 draws the same line but calls notarisation mandatory for every mortgage; Article 289(1-1) and (1-3) say otherwise, and we follow the Code.
Earnest money (ბე, Articles 421 to 423) secures a contract by a payment that the receiver at fault returns double (Article 423(2)), and a seizure (ყადაღა) is imposed by a court or the tax authority. Neither is a pledge.
Pledge in five languages
| Language | Pledge | Mortgage, for contrast |
|---|---|---|
| Georgian | გირავნობა | იპოთეკა |
| English | pledge | mortgage |
| Russian | залог движимого имущества | ипотека |
| Hebrew | משכון | משכנתה |
| Arabic | رهن المنقولات | الرهن العقاري |
Georgian contracts use გირავნობა, the Civil Code's own word, for movables and rights, and switch to იპოთეკა as soon as the security is a flat or a plot; the Russian column spells out "движимого имущества" because a bare залог would also cover a mortgage.
Mistakes buyers make with the word pledge
- Searching only the flat's extract when the deal also involves company shares, a car or furniture.
- Taking "pledged flat" literally. A seller who says the flat is "in გირაო" is describing what the law calls a mortgage.
- Translating залог without checking the article. Article 254 onwards means a pledge, Article 286 onwards a mortgage.
- Ignoring the maximum secured sum in the pledge agreement.
- Assuming a bank writes off any shortfall. The default in Article 276(2), and in Articles 300(2) and 301(1-1) for a mortgage, can be changed by agreement unless the lender is outside National Bank supervision and the borrower is a natural person.
To be added by the team: scans for the team to add: a redacted extract from NAPR's movable and intangible property registry showing a pledge entry, a redacted flat extract with a mortgage line for contrast, and the first page of a redacted registered pledge agreement with the maximum secured sum visible.
How to check for a pledge before you buy
List every asset in the deal
Flat, shares, furniture, car, deposits.
Order the flat's extract
Read the mortgage and seizure lines.
Search the movables registry
For any asset that is not land or a building.
Note rank and ceiling
Registration time and maximum secured sum.
Plan the payoff
Creditor paid first, waiver registered.
Order a fresh extract
Confirm the entry is gone before the balance is paid.
Frequently asked questions
Can a flat in Georgia be pledged?
Not in legal terms. Security over a flat is a mortgage (Civil Code Article 286); a pledge covers movables and rights (Article 254).
What can be pledged in Georgia?
Movable things and transferable rights such as claims, shares and securities, including future property.
What are the two types of pledge?
Possessory, where the thing is handed over, and registered, where it stays with the pledger.
Does a pledge appear on a flat's registry extract?
No. NAPR records pledges in a separate registry with its own extract.
How much does it cost to register a pledge?
GEL 39 for its origin, change or termination, processed immediately.
Who is paid first if an asset is pledged twice?
The pledgee who submitted for registration first (Article 267(1)).
What if the sale does not cover the debt?
By default the claim is deemed satisfied anyway, unless agreed otherwise (Article 276(2)). A lender outside National Bank supervision cannot agree otherwise with a natural-person borrower (Article 276(3)).
Is a tax lien a pledge?
No. The Tax Code creates it with the tax liability and on registration, without any agreement.
Sources
- Civil Code of Georgia, English consolidated text, Arts. 173, 254 to 276, 286 to 290 and 421 to 423, Matsne (accessed 28 October 2026)
- Civil Code of Georgia, Georgian text, original 1997 version, chapter headings, Matsne (accessed 28 October 2026)
- Fees and terms: pledge and lease, National Agency of Public Registry (accessed 28 October 2026)
- Frequently asked questions: pledge and lease, National Agency of Public Registry (accessed 28 October 2026)
- Fees and terms: immovable property registration, National Agency of Public Registry (accessed 13 October 2026)
- Tax Code of Georgia, Art. 239, Matsne (accessed 12 October 2026)
- Law of Georgia on the Public Registry, Arts. 19 and 20, Matsne (accessed 12 October 2026)
- Andersen Georgia, note on pledge and mortgage, 12 February 2026 (accessed 28 October 2026)
Change log
- - Glossary entry published from the Civil Code of Georgia, the Tax Code of Georgia, the Law on the Public Registry, the National Agency of Public Registry and Andersen Georgia.