What is an encumbrance, and why does it decide a purchase?
An encumbrance is a registered right or restriction that limits what an owner may do with a property, or gives someone other than the owner a claim against it. On a Georgian extract it sits in the part listing registered rights and obligations, and it is the part that most often changes a deal. Three kinds account for most of the hard decisions: a mortgage, which the owner agreed to; a seizure, which a court, an enforcement officer or the tax authority imposed; and a tax lien, which the State registers for unpaid taxes. They differ in who created them, who can lift them, and whether the property can change hands while they stand.
The registry keeps them in different places. Mortgages are entered with the other rights to the property; seizures and prohibitions go into the Registry of Public-law Restrictions (Law on the Public Registry, Article 19); tax liens have a registry of their own (Article 20). An extract brings everything recorded against one property together, which is why every check starts there. How to read the rest of the extract is explained in our line-by-line guide to the extract.
The three encumbrances side by side
| Point | Mortgage | Seizure | Tax lien |
|---|---|---|---|
| Who creates it | The owner, by agreement with a lender (Civil Code, Article 286) | A court, an enforcement officer or the tax authority | The tax authority, for unpaid tax (Tax Code, Article 239) |
| When it takes effect | On registration (Article 289) | When imposed and recorded as a public-law restriction | With the tax liability and on registration (Article 239(2)) |
| Can the owner sell? | Yes: a promise never to sell is void (Article 294(4)), but the mortgage stays on the property | Not freely: disposal is prohibited and other registrations are generally blocked | A transfer can happen, but the lien goes with the property (Article 239(5)) |
| What a buyer takes on | The lender's right to be paid out of the property | Nothing can be registered to the buyer while it stands | Someone else's tax debt, secured on the flat the buyer now owns |
| How it ends | Repayment, then registered cancellation | Lifted by the body that imposed it | Payment, or a sale with the tax authority's written consent (Article 239(9)) |
Mortgage: the burden you can usually work with
A mortgage is the most common burden on a Georgian extract and the least alarming, because the owner chose it and it has a known price: the outstanding loan. The Civil Code gives it legal force only once it is registered (Article 289); one property can carry several mortgages, ranked by the date their applications were filed (Article 290); and an owner's promise to a lender never to sell or encumber the property is void (Article 294(4)). A mortgaged flat can therefore be sold. The real questions are how the lender is paid, and when the entry disappears.
The detail that catches buyers is that repaying the loan does not erase the line by itself. Under Article 288, once the secured claim is extinguished the mortgage passes to the owner as an "owner's mortgage"; the entry leaves the extract only when its cancellation is registered. Where the lender issued a Certificate of Mortgage, that certificate has to come back and its cancellation be registered too (Article 2897). A private lender's mortgage securing a loan must also have been certified by a notary, a rule that does not apply to banks, microfinance organisations and credit unions (Article 289), so the extract and the mortgage contract tell you exactly who has to sign the release.
Obtain the payoff figure in writing
The seller asks the lender for a statement of the sum that closes the loan on a named date, including interest to that day.
Write the route into the contract
The contract names the part of the price that goes straight to the lender and the part that goes to the seller.
Pay the lender first
Directly to the lender's account, or through a bank escrow or a notary's deposit that releases on registration.
File the release with the transfer
The lender's consent to cancel goes to the registry with your application, or before it, so you are registered as owner of an unburdened flat.
Read the new extract
You appear as owner and the mortgage line is gone. If it is still there, the release has not been registered yet.
Seizure: a stop sign, not a negotiation
A seizure, ყადაღა in Georgian, is imposed rather than agreed. A civil court can attach a defendant's property to secure a claim before judgment; an enforcement officer can seize property to enforce a judgment; a criminal court can seize assets in criminal proceedings; and the tax authority can seize a taxpayer's assets without any court decision (Tax Code, Article 241(1)). A tax seizure prohibits every form of disposal listed in Article 241(2): sale, pledge, mortgage, usufruct, easement, building leasehold, lending, letting and any handover of possession.
While a seizure or another prohibition stands, the registry generally refuses to register other rights to the property (Law on the Public Registry, Article 19). For a buyer that is decisive: however the price is paid, ownership cannot simply be registered in your name. Even the private auction route a lender may agree with an owner is closed, because the Civil Code forbids selling a seized thing through an auction specialist (Article 302(7)).
There are exits, but each runs through the body that imposed the seizure. The tax authority may consent in writing to a sale if the proceeds go in full to the tax debt, and the seizure is then cancelled (Tax Code, Article 241(3)). A court seizure is lifted by the court that ordered it. Pay nothing on the strength of a promise that a seizure "is a formality" or "will be gone next week"; pay when the extract shows it lifted, or through an arrangement your lawyer has agreed with the authority concerned.
Tax lien: the debt that follows the property
A tax lien is the State's right to collect outstanding tax out of the taxpayer's property. Under Article 239(2) of the Tax Code it arises together with the tax liability and on registration, and it reaches every asset the person owns, including assets acquired afterwards. The registry has to record it no later than the day after it receives the tax authority's notice (Article 239(3)), so a lien can appear on an extract very quickly.
The rule every buyer should know is Article 239(5): property sold or otherwise transferred while a tax lien is still registered remains subject to that lien in the hands of its new holder, and it can be seized and sold. You can therefore be registered as owner and still lose the flat to the seller's tax debt. Article 239(6) carves out one situation: where a bank or another listed financial institution registered its mortgage before the tax lien and the property is sold, the proceeds first cover that earlier claim and the lien does not apply to the new owner. That carve-out turns on the lender's priority, and a lawyer should confirm whether it covers your case before you rely on it.
The clean way through is in Article 239(9): the lien is cancelled when the taxpayer sells with the tax authority's written consent and the whole of the proceeds goes to the tax debt. A purchase from a seller with a tax lien should be built around that consent, with the tax portion of the price paid where the tax authority directs, and the remainder released to the seller only after the extract shows the lien cancelled.
Other entries that limit what you buy
- A registered lease. The tenancy binds you as the new landlord, so read its term and rent before agreeing a price, or make its ending a condition of the sale.
- Usufruct or superficies. Another person may use the property, or build on the land, for years. The price and your plans have to reflect it, or the holder has to release it.
- An easement. A neighbour's right of way or a utility line across a plot rarely blocks a sale, but it shapes what you can build and where you can fence.
- A pre-emption right. The registry law provides for registering a co-owner's or lessee's right to buy first. The seller has to deal with it before selling to anyone else.
- A pending application. Someone else's application already in progress ranks ahead of yours by the time it was filed (Law on the Public Registry, Article 13(4)).
Can you buy a property that carries one?
| Entry on the extract | Buy? | On what condition |
|---|---|---|
| Mortgage | Yes, routinely | The lender is paid from the price and the cancellation is filed with your transfer |
| Seizure | Not until it is lifted | Written consent of, or lifting by, the court or authority that imposed it |
| Tax lien | Only with a structure | The tax authority's written consent, with the proceeds going to the tax debt |
| Registered lease | Yes | You accept the tenant on the registered terms, or the lease ends first |
| Usufruct, superficies, easement | It depends | You accept the limit and price it in, or the holder releases the right |
| An entry nobody can explain | No | Not until your lawyer has seen the document behind it |
What the contract should say about burdens
Three clauses carry the weight. The first lists every entry on the current extract and says, for each, whether it is removed at the sale or accepted by you. The second is the seller's statement that nothing else is registered or pending against the property; it is backed by Article 489 of the Civil Code, under which a property is free of legal defects only if no third party can assert a claim against the buyer, and a registered right that does not actually exist counts as a defect. The third sets out the mechanics: which part of the price clears which burden, paid to whom, and that the balance reaches the seller only when the extract shows the burden cancelled. The full clause list is in our guide to the sale contract.
Risks and exceptions
- Paying the seller and trusting them to pay the bank. The lender is paid directly from the price, never through the seller.
- "The seizure is a formality". No seizure is a formality while it blocks your registration.
- Ignoring a tax lien because you will be registered anyway. Registration does not shake off a lien that was never cancelled.
- One extract, weeks before signing. A lien can be registered the day after notice; check again on the day.
Frequently asked questions
Can I buy a flat that has a bank mortgage on it?
Yes. The lender is paid from the price at the sale and its consent to cancel is filed with your application, so you are registered as owner of an unburdened flat.
Does repaying the loan remove the mortgage from the extract?
Not automatically. Under Article 288 of the Civil Code the mortgage passes to the owner when the claim ends; the line disappears when its cancellation is registered.
Can the tax authority seize property without a court?
Yes. Article 241(1) of the Tax Code allows it to seize a taxpayer's assets to the extent needed for an acknowledged tax debt.
If I buy a flat with a tax lien, is the debt my problem?
It can be. Under Article 239(5) the lien continues against the new holder if it was not cancelled, subject to the bank-priority exception in Article 239(6).
Who lifts a court seizure?
The court that ordered it. Ask to see its decision, and wait until the extract no longer shows the seizure before paying.
Could a new burden appear between signing and registration?
Priority follows the time an application is filed, which is why the extract is checked on the day and your application is filed straight after signing.
The ways to pay so that a burden is cleared before the seller is paid are compared in safe payment for a property.
Sources
- Civil Code of Georgia (Articles 286, 288 to 290, 294, 302 and 489), consolidated 25 June 2026, Legislative Herald of Georgia (accessed 12 October 2026)
- Tax Code of Georgia (Articles 238, 239 and 241), Legislative Herald of Georgia (accessed 12 October 2026)
- Law of Georgia on the Public Registry (Articles 13, 19 and 20), consolidated 1 April 2026, Legislative Herald of Georgia (accessed 12 October 2026)
- Provisional measures: applications, types and compensation for damages arising from security for the claim, Andersen in Georgia, 25 May 2026 (accessed 12 October 2026)
- Georgia: seizure of assets in national proceedings, Criminal Justice and Asset Database, University of Nottingham (accessed 12 October 2026)
Change log
- - Explainer published from the Civil Code, the Tax Code and the Law on the Public Registry; being reviewed by the partner lawyer.