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Book Two

Law of Things

Section One

Property

Article 147 – Concept

Property, according to this Code, is all things and intangible property, which may be possessed, used and

administered by natural and legal persons, and which may be acquired without restriction, unless this is

prohibited by law or contravenes moral standards.

Article 148 – Types of things

A thing may be either movable or immovable.

Article 149 – Immovable things

Immovable things shall include a plot of land with its subsoil minerals, the plants growing on the land, and

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buildings and other structures firmly attached to the land.

Article 150 – Essential component parts of a thing

1. Any part of a thing that cannot be severed without either destroying the whole thing or such part or

extinguishing their purpose (an essential component part of a thing) may be the object of separate rights only if so

provided by law.

2. The essential component parts of a plot of land shall include buildings, structures and things firmly attached to

the land and not intended for temporary use, which may also be stipulated by a contract.

Article 151 – Accessories

1. An accessory is a movable thing which, although not being a component part of the principal thing, is intended

to serve the economic purpose of the principal thing and is in spatial relationship with the principal thing and,

according to common usage is deemed to be an accessory.

2. A thing that is attached to land and may be severed from it without losing or substantially decreasing its

commodity value shall also be deemed to be an accessory.

Article 152 – Concept of intangible property

Claims and rights that may be transferred to other persons or that are intended either for bringing a material

benefit to their possessor or for entitling the latter to claim something from other persons shall constitute

intangible property.

Article 153 – Accessory and limited rights

1. A right that is connected to another right in such a manner that it cannot exist without the latter right is an

accessory right.

2. A limited right is the one which is derived from a broader right and which encumbers the broader right.

Article 154 – Fruits of a thing and fruits of a right

1. Fruits of a thing shall be income, accrual and/or advantage derived from the thing.

2. Fruits of a right shall be income and/or advantage received as a result of the exercise of the right.

3. Income and advantage, the derivation of which is ensured by a thing or a right through a legal relation, shall

also constitute the fruit of the thing or of the right.

4. Entitlement to a thing or a right makes it possible to receive the fruit of such thing or right within the scope

and duration of such entitlement, unless otherwise provided by law.

5. If a person is obligated to return the fruits, he/she may claim the expenses incurred on the fruit, provided that

such expenses arise from proper economic management and do not exceed the value of the fruit.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Section Two

Possession

Article 155 – Concept; Types

1. Possession of a thing shall be acquired by obtaining actual control of the object, coupled with the intention of

doing so.

2. A person who, although exercising actual control of a thing, nevertheless is doing so in favour of another person

from whom he/she has received the right to possess the thing shall not be deemed to be the possessor. Only the

person who conferred the right to possess the thing shall be deemed to be the possessor.

3. If a person possesses a thing by virtue of a legal relation that either entitles or obligates him/her to possess the

thing for a certain period of time, then this person shall be deemed to be a direct possessor, and the one who

conferred the right to possess the thing or imposed the obligation on him/her shall be deemed to be an indirect

possessor.

4. If one thing is jointly possessed by a number of persons, then those persons shall be deemed to be joint

possessors.

5. If parts of one thing are possessed by a number of persons, then those persons shall be deemed to be the

possessors of the individual parts.

Article 156 – Termination of possession

Possession shall be deemed terminated if the possessor cedes the thing forever or otherwise loses actual control of

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the thing.

Article 157 – Transfer of possession to heirs

Possession shall be transferred to heirs in the same form in which it was held by the decedent (a testator or an

intestate).

Article 158 – Presumption of ownership

1. The possessor of a thing shall be presumed to be its owner.

2. This rule shall not apply if the nature of the ownership relation is identified through the Public Registry. The

presumption of ownership shall not apply to the previous possessor if he/she lost this thing or it was stolen or

otherwise dispossessed from him/her. Presumption of ownership shall operate in favour of the previous possessor

only during the period of his/her possession.

Article 159 – Bona-fide possessor

A possessor shall be deemed to be bona fide if he/she possesses a thing lawfully or if he/she may be deemed to be

entitled to possession based on the due diligence required in business relations.

Article 160 – Demand by a bona-fide possessor to restore a thing retained illegally

If a bona-fide possessor is dispossessed, he/she may recover the thing from the new possessor within a three-year

period. This rule shall not apply when the new possessor has a better right to possess the thing. The right to return

property may also be applied against the person having a better right to the thing if he/she has acquired it by

duress or deception.

Article 161 – Demand by a bona-fide possessor to remove an unlawful disturbance

If a bona-fide possessor is not dispossessed of a thing but is otherwise obstructed in the exercise of his/her

possession, then he/she may, as if he/she were the owner, demand that the obstruction be ended. In addition,

he/she may claim damages sustained because of the disturbance of his/her possession. This rule of compensation

for damages shall likewise apply when it is impossible to demand that the obstruction be ended.

Article 162 – Rights of a lawful possessor

1. A claim to return a thing may not be made against a lawful possessor. During lawful possession, the fruits of a

thing and of a right shall belong to him/her.

2. This rule shall also apply to relations between direct and indirect possessors.

Article 163 – Duty of a non-entitled bona-fide possessor

1. A bona-fide possessor who did not have the right to possession originally or who has lost the right shall return

the thing to the rightful person. Until the rightful person exercises this right, the fruit of the thing or of the right

shall belong to the possessor.

2. The bona-fide possessor may claim from the rightful person reimbursement for the improvements made and

expenses incurred by the possessor during possession of the thing in good faith, and which have not been

compensated by the use of the thing or by the fruit derived from it. The value of fruit not derived due to the

possessor’s fault shall be deducted. The same rule shall apply to the improvements that enhance the value of the

thing, provided the enhanced value still exists at the moment of the return of the thing.

3. The bona-fide possessor may refuse to return the thing until his/her claims are satisfied.

Article 164 – Duties of a mala-fide possessor

A mala-fide possessor shall return to the rightful person the thing and the benefit derived, the fruit of the thing or

of the right. The possessor shall compensate for the fruit that the he has not received for a culpable reason. He/she

may claim compensation for the improvements he/she made and the expenses he/she has incurred on the thing

only if at the moment the thing is returned they result in the enrichment of the rightful person. Other claims

against the mala-fide possessor shall remain unchanged.

Article 165 – Acquiring movable things by prescription

1. If a person has uninterruptedly possessed a movable thing for five years as his/her own thing, he/she shall

obtain the right of ownership to it (acquisition by prescription).

2. Acquisition by prescription of a movable thing shall not be allowed if the acquirer has possessed the thing in

bad faith or if he/she subsequently discovered that the thing did not belong to him/her.

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Article 166 – Presumption of uninterrupted possession of things

If a person possessed a thing at the beginning and at the end of a certain period of time, he/she shall be presumed

to have possessed the thing during the interval of the period as well.

Article 167 – Acquisition of immovable things by prescription

If a person is recorded in the Public Registry as the owner of a plot of land or of any other immovable property,

while he/she did not in fact acquire title to it, he/she shall obtain title, provided the registration has existed for

fifteen years and during that period the person possessed the property as his/her own.

Article 168 – Termination of possession of a thing by claim of the owner

Possession of a thing shall be terminated if the owner asserts a substantiated claim against the possessor.

Article 169 – (Deleted)

Law of Georgia No 4744 of 11 May 2007 – LHG I, No 18, 22.5.2007, Art. 158

Section Tree

Ownership

Chapter One

Subject Matter of Ownership

Article 170 – Concept; Subject matter of the right of ownership

1. An owner may, within the limits of legal or other, namely contractual restraints, freely possess and use any

property (thing), exclude others from using the property, and administer it, unless doing so would violate the

rights of neighbours or other third persons or unless such act constitutes abuse of rights.

2. Use of the property in such a way that damage is done only to others so that the priority of the owner’s interest

is not evident and the necessity of his/her action is unjustified, shall be deemed to be an abuse of rights.

3. A person’s right to use shall also include the possibility of not using his/her thing. If non-use or non-

maintenance of the thing is prejudicial to public interests, then the law may prescribe an obligation to use,

maintain or keep the thing. In that case, the owner may be required to either perform the obligation by

himself/herself or transfer the thing, in exchange for appropriate consideration, to another person.

Article 171 – Right of ownership of the essential component part of a thing

The right of ownership of a thing shall also extend to the essential component parts of the thing.

Article 172 – Demand for restoring a thing from defective possession and for removing a disturbance

1. An owner may recover a thing from its possessor, except if the possessor had the right to possess it.

2. If encroachment on or other disturbance of the right of ownership occurs without seizure or dispossession of

the thing, then the owner may demand that the disturber end the disturbance. If the disturbance continues, the

owner may seek a prohibitory injunction.

3. (Deleted – 11.12.2015, No 4625).

Law of Georgia No 3885 of 8 December 2006 – LHG I, No 48, 22.12.2006, Art. 327

Law of Georgia No 4625 of 11 December 2015 – website, 29.12.2015

Article 173 – Common property

1. Common (joint and shared) property shall arise by operation of law or on the grounds of a transaction. Each co-

owner may assert a claim against third persons over the property under common ownership. Each co-owner may

recover the thing only in favour of all co-owners.

2. A thing under common ownership, if so agreed by the co-owners, may be pledged or otherwise encumbered in

favour of and in the interests of one of the co-owners.

3. Expenses on maintaining and keeping a thing under common ownership shall be borne equally by the co-

owners, unless otherwise provided by law or contract.

4. Unless directly established by the legislation of Georgia, the pre-emptive right to the acquisition of any share of

the common property may be determined by agreement among the co-owners.

Law of Georgia No 4744 of 11 May 2007 – LHG I, No 18, 22.5.2007, Art. 158

Law of Georgia No 4851 of 25 June 2019 – website, 2.7.2019

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Chapter Two

Law of Neighbouring Tenements

Article 174 – Concept; Duty of mutual respect

The owners of neighbouring plots of land or other immovable properties shall, in addition to the rights and duties

prescribed by law, hold each other in respect. All such plots of land or other immovable properties between which

a reciprocal nuisance may arise shall be deemed to be neighbouring ones.

Article 175 – Obligation to tolerate neighbouring nuisances

1. The owner of a plot of land or any other immovable property may not prohibit the introduction of gases, steam,

smells, smoke, soot, warmth, noise, vibrations and similar influences emanating from another plot of land to the

extent that they do not interfere with the use of his/her plot of land, or interfere with it only to an insignificant

extent.

2. The same rule shall apply to the extent that a material interference is caused by use of the other plot of land or

other immovable property and cannot be prevented by measures that are deemed to be regular economic activities

for users of this kind.

3. If the owner is bound to tolerate such a nuisance, he/she may demand from the owner of the other plot of land

appropriate monetary compensation, where the nuisance exceeds the use regarded as customary in the location

and is beyond economically permissible limits.

Article 176 – Unallowable encroachment

An owner of a plot of land may demand the prohibition of erection and utilisation of such buildings on

neighbouring plots that impermissibly encroach on the right to use his plot of land and such encroachment is

foreseeably evident beforehand.

Article 177 – Demand for elimination of danger

If a plot of land is endangered by the collapse of a building from a neighbouring plot, the owner may demand that

the neighbour take the precautions necessary to avert the danger. It shall not be allowed to change the direction

of or manipulate watercourses and groundwater running through several plots of land in such a manner that may

reduce the amount of the water and/or deteriorate its quality. It shall not be allowed to interfere with the natural

flow of rivers.

Article 178 – Right of the owner of a neighbouring plot of land to the fruit

1. The fruit of a tree or bush that falls onto a neighbouring plot of land shall be deemed to be the fruit of that plot.

2. The owner of a plot of land may cut off the branches or roots of a tree or of a bush that intrude from the

neighbouring plot of land.

Article 179 – Monetary compensation for the obligation of tolerance

1. If when erecting a building the owner of a plot of land unintentionally encroaches on a neighbouring plot of

land, then the owner of the neighbouring plot shall tolerate the encroachment, unless the latter objects to the

encroachment before or immediately upon detecting it.

2. The encroaching neighbour shall pay monetary compensation annually in advance.

Article 180 – Right of way of necessity

1. If a plot of land lacks a connection to public roads, electricity, oil, gas and water supply lines that are necessary

for its proper use, the owner may require that a neighbour tolerate the use of his/her plot to create the necessary

connection. The neighbours on whose plots of land the right of way of necessity or transmission line passes shall

be given monetary compensation which, by agreement of the parties, may be made as a lump-sum payment.

2. The obligation to tolerate the right of way of necessity or transmission line shall not arise if an already existing

connection to the plot of land was discontinued by the voluntary action of the owner.

Article 181 – Duty to mark boundaries

1. The owner of a plot of land may require from the owner of a neighbouring plot of land that the latter

participate in erecting fixed boundary markers or in restoring an already existing boundary marker if it has been

damaged or become unrecognisable. The expenses for marking boundaries shall be borne equally by the

neighbours unless otherwise stipulated by either mutual agreement or another legal relation.

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2. If exact boundary lines cannot be determined, then the boundary markers shall be established according to the

actual possession by the neighbours. If actual possession cannot be exactly determined, then the disputed land

shall be divided in equal parts between the plots of land. If such division results in an unjust outcome, then a court

shall determine the boundary lines based on the application of one of the parties.

Article 182 – Right to use boundary installations

1. When two plots of land are separated by a fence or any other structure used as a boundary, the owners of the

plots of land shall be presumed to have equal right to use the structure, unless the outward features of the

structure expressly indicate that it belongs to one of the neighbours alone.

2. If both neighbours are entitled to joint use of the boundary structure, then each of them may use the structure

so as not to obstruct joint use by the other neighbour.

3. The expenses of maintaining and keeping the structure shall be borne equally by the neighbours.

4. As long as one of the neighbours has an interest in the existence of the boundary structure, it may not be

removed or altered without the consent of that neighbour.

Chapter Three

Acquisition and Loss of Ownership

I – Acquiring the Ownership of Immovable Things

Article 183 – Acquiring the ownership of immovable things by agreement

1. In order to acquire an immovable thing the transaction shall be made in writing and the acquirer’s ownership

right shall be registered in the Public Registry.

2. An immovable thing owned by a child may be disposed of by his/her parent or other legal representative in the

best interests of the child, on the basis of the consent of the court.

Law of Georgia No 3879 of 8 December 2006 – LHG I, No 48, 22.12.2006, Art. 321

Law of Georgia No 2799 of 23 March 2010 – LHG I, No 14, 30.3.2010, Art. 94

Law of Georgia No 5017 of 1 July 2011 – website, 14.7.2011

Law of Georgia No 5013 of 20 September 2019 – website, 27.9.2019

Law of Georgia No 5913 of 21 May 2020 – website, 25.5.2020

Article 184 – Abandonment of the ownership of immovable things

In order to abandon ownership or other rights to an immovable thing the rightful person shall declare it and

register the declaration in the Public Registry. The declaration shall be submitted to the Office of Public Registry.

Only after the submission shall the declaration on the relinquishment of the right become binding.

Article 185 – Protection of acquirer’s interests

Considering the acquirer’s interests, the transferor shall be deemed as the owner if he/she is registered with the

Public Registry as such, except when the acquirer knew that the transferor was not the owner. (The normative

content of Article 185, according to which ‘the transferor shall be deemed as the owner if he/she is registered with

the Public Registry as such’, shall be recognised as unconstitutional when the record in the Registry has been

appealed against and the acquirer is aware of this fact) – Decision No 3/4/550 of the Constitutional Court of Georgia of 17

October 2017 – website, 26.10.2017

II – Acquiring Ownership of Movable Things

Article 186 – Grounds for acquiring ownership of movable things

1. The transfer of ownership of a movable thing shall require the transfer of the thing by the owner to the

acquirer on the grounds of a valid right.

1 1 . An immovable thing valued at more than GEL 1000 and owned by a child may be disposed of by his/her

parent or other legal representative in the best interests of the child, on the basis of the consent of the court.

2. The following shall be deemed to be a transfer of a thing: handing over the thing to the acquirer into direct

possession; transfer of indirect possession by a contract under which the previous owner may remain the direct

possessor; granting, by the owner to the acquirer, of the right to claim possession from a third person.

Law of Georgia No 5013 of 20 September 2019 – website, 27.9.2019

Law of Georgia No 5913 of 21 May 2020 – website, 25.5.2020

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Article 187 – Bona-fide acquirer

1. An acquirer shall become the owner of a thing even if the transferor was not the owner, but the acquirer is in

good faith with respect to this fact. The acquirer shall not be deemed to be in good faith if he/she knew or should

have known that the transferor was not the owner. Such good faith shall exist before the transfer of the thing.

2. A bona-fide acquirer cannot become the owner of a thing if the owner has lost that thing, or it has been stolen,

or the owner has otherwise been dispossessed of it against his/her will, or if the acquirer has received the thing

free of charge. These restrictions shall not apply to money, securities and/or to things transferred at an auction.

Law of Georgia No 5667 of 28 December 2011 – website, 30.12.2011

Article 188 – Conditional ownership

1. If a transferor conditioned the transfer of ownership to an acquirer upon the prior payment of the price of a

thing, then it is presumed that the ownership shall be transferred to the acquirer only after the price has been paid

in full. If the acquirer delays the payment of the price, and the transferor repudiates the contract, then the parties

shall return the performance already rendered bilaterally.

2. The condition defined in paragraph 1 shall also be deemed to be fulfilled if the transferor is satisfied in any

manner other than by payment of the price or if the acquirer relies upon the limitation period on the claim.

Article 189 – Transfer of ownership through securities

If, instead of the transfer of a thing, the transfer of securities is required in order to transfer ownership to the

acquirer, then the ownership shall be deemed to have been transferred from the moment the transferor transfers

the securities to the acquirer.

Article 190 – Acquiring the ownership of ownerless movable things

1. If a person takes possession of an ownerless movable thing, he/she acquires the ownership of the thing unless

the appropriation is prohibited by law or unless the taking of possession injures the right of appropriation of

another person.

2. A movable thing shall be deemed ownerless if the previous owner, in the intention of waiving ownership, gives

up possession of the thing.

Article 191 – Finding

1. A finder of a lost thing shall immediately notify the person who lost the thing, the owner, the rightful person

or, if their identities are unknown, the police or other local authority of the finding, and hand the thing over to

them.

2. One year after notification of the finding, the finder shall acquire ownership of the thing, unless the owner has

become known to the finder or the owner notified the police of his/her right. All other rights to the thing shall be

extinguished simultaneously upon the acquisition of the ownership of the thing.

3. If rightful person recovers the thing, the finder may demand from him/her a reward (finder’s reward) in the

amount of up to five per cent of the value of the thing. In addition, the finder may demand from the rightful

person or from the appropriate authority, compensation for the expenses incurred in safekeeping the property.

4. If the finder relinquishes ownership, the competent authority may sell the thing after one year at an auction

and receive the profits or, if the thing is of low value, gratuitously transfer or destroy it.

5. The one-year period shall not apply when animals, perishable items or things, the keeping costs of which are

high, are found, and the proceeds of their sale shall be returned to the owner.

Article 192 – Treasure trove

If a thing that has lain hidden for so long that the owner can no longer be established (treasure trove) is

discovered, one half of the ownership shall be acquired by the discoverer and the other half by the owner of the

thing in which the treasure was found.

Article 193 – Acquiring ownership of essential component parts of a plot of land

If a movable thing is attached to a plot of land in such a manner that it has become an essential component part of

it, then, under Article 150(2), the owner of the plot of land shall simultaneously be the owner of the thing.

Article 194 – Co-ownership of things created by merger of movable things

1. If movable things are attached to each other in such a manner that they have become essential component parts

of a new integrated thing, or if the movable things have merged, the previous owners shall become the co-owners

of the new thing. The shares shall be determined according to the values of the things at the time of their merger.

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2. If one of the things, according to established understanding, is deemed to be the principal thing, then its owner

shall acquire ownership of the accessories as well.

Article 195 – Co-ownership of new movable things created by processing of material

If a new movable thing is created by processing or altering some material, then the manufacturer and the owner

of the material shall become co-owners of the new thing. The shares shall be determined according to the value of

the material and the costs of manufacturing, unless otherwise stipulated by agreement.

Article 196 – Extinction of rights upon the transfer of ownership

If ownership is transferred under Articles 193-195, all other existing rights to that thing shall be extinguished.

Article 197 – Claim for damages against the new owner

1. A person who loses ownership under Articles 193-195 or whose right is otherwise impaired may claim damages

from the person who has become the owner. Claim for restoration of the initial state of affairs shall not be

allowed.

2. The claim under paragraph 1 of this article shall not arise if the new owner has acquired the thing under a

commutative contract from a third person.

III – Acquiring Ownership of Rights and Claims

Article 198 – Concept; Subject matter

1. A possessor of a claim or a right that can be assigned or pledged may transfer it to the ownership of another

person. Claims and rights are transferred to a new owner in the same state in which they existed with the former

possessor.

2. The former possessor shall hand over to the new possessor all the documents in his/her possession that are

related to the claims and rights, as well as all information necessary for exercising those claims and rights.

3. The former possessor shall also hand over to the acquirer, at the acquirer’s request, a duly authenticated

document on the assignment of these claims and rights. The expenses for authentication of this document shall be

borne by the new possessor.

[4. This article and Articles 199-205 and 207 of this Code shall not apply to the relations that are based on the Law

of Georgia on Factoring. (Shall become effective from 1 January 2027)]

Law of Georgia No 1454 of 1 April 2026 – website, 6.4.2026

Article 199 – Assignment of claims

1. An owner of a claim (creditor) may assign the claim to a third person without the consent of the debtor, unless

to do so would contravene either the essence of the obligation, the agreement with the debtor, or the law

(assignment of claim). An agreement with the debtor on the inadmissibility of assignment of a claim may be made

only if the debtor has a valid interest.

2. A claim shall be assigned under a contract concluded between the owner of the claim and a third party. In that

case, the third party shall occupy the place of the original owner.

Article 200 – Rights of a debtor in the case of assignment of claim

Until a debtor is notified of the assignment of the claim, he/she may perform the obligation to the original owner

of the claim.

Article 201 – Transfer of the means of security upon assignment of a claim

1. By assignment of a claim, both the means of security and other rights in connection with the claim shall be

transferred to the new owner.

2. The debtor may assert against the new owner all the defences that he/she had against the original owner at the

time he/she received notice of the assignment of the claim.

Article 202 – Order of priority of owners of a claim

If an owner of a claim has agreed to assign the claim with a number of persons, then the person with whom the

owner of the claim first entered into relations shall be entitled before the debtor. If this cannot be determined,

then priority shall be given to the person of whom the debtor was earliest notified.

Article 203 – Assignment of debt

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1. A third person may also assume a debt by agreement concluded with the creditor (assignment of debt). In such

case, the third person shall stand in the place of the original debtor.

2. The original debtor may disagree with this agreement between the creditor and a third person and pay the debt

itself.

Article 204 – Consent by the creditor upon assumption of debt

If a debtor and a third person enter into an agreement on an assumption of debt, then the validity of the

assumption shall depend upon the consent of the creditor. Exceptions to this rule shall be established by law.

Law of Georgia No 1901 of 23 December 2017 – website, 11.01.2018

Law of Georgia No 2117 of 29 November 2022 – website, 16.12.2022

Article 205 – Rights of a new debtor

The new debtor may assert against the creditor all the defences arising from the relations that existed between the

creditor and the original debtor. He/she may not offset the claims that belonged to the original debtor.

Article 206 – Termination of a means of security upon assignment of debt

Immediately upon assignment of a debt any guarantee or pledge securing the claim shall be terminated, unless the

guarantor or the pledger expresses his/her consent to continue the relationship. Exceptions to this rule shall be

established by law.

Law of Georgia No 1902 of 28 December 2002 – LHG I, No 4, 22.1.2003, Art. 20

Law of Georgia No 5667 of 20 December 2019 – website, 31.12.2019

Law of Georgia No 2117 of 29 November 2022 – website, 16.12.2022

Article 207 – Assignment of claim by operation of law

The rules for acquisition of ownership of rights and claims shall apply accordingly to the assignment of claims by

operation of law or on the basis of a decision made by a court or by a competent state body.

Chapter Four

Ownership of a Flat in a Block of Flats

Law of Georgia No 5278 of 11 July 2007 – LHG I, No 29, 27.7.2007, Art. 322

I. General Provisions

Article 208 – Grounds for acquiring an object of individual ownership (a flat and/or a non-residential space)

To acquire an object of individual ownership (a flat and/or a non-residential space), it shall be necessary to sign a

written agreement and register the acquirer’s ownership defined by such agreement in the Public Registry.

Law of Georgia No 4744 of 11 May 2007 – LHG I, No 18, 22.5.2007, Art. 158

Law of Georgia No 5278 of 11 July 2007 – LHG I, No 29, 27.7.2007, Art. 322

Article 209 – Acquiring a rented flat

If a person acquires a rented flat, he/she shall take the place of the landlord.

Law of Georgia No 4744 of 11 May 2007 – LHG I, No 18, 22.5.2007, Art. 158

Law of Georgia No 5278 of 11 July 2007 – LHG I, No 29, 27.7.2007, Art. 322

Article 210 – (Deleted)

Law of Georgia No 3879 of 8 December 2006 – LHG I, No 48, 22.12.2006, Art. 321

Law of Georgia No 5278 of 11 July 2007 – LHG I, No 29, 27.7.2007, Art. 322

Article 211 – (Deleted)

Law of Georgia No 5278 of 11 July 2007 – LHG I, No 29, 27.7.2007, Art. 322

Article 212 – (Deleted)

Law of Georgia No 5278 of 11 July 2007 – LHG I, No 29, 27.7.2007, Art. 322

Article 213 – (Deleted)

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Law of Georgia No 5278 of 11 July 2007 – LHG I, No 29, 27.7.2007, Art. 322

http://www.matsne.gov.ge 040.000.000.05.001.000.223

Article 214 – (Deleted)

Law of Georgia No 4744 of 11 May 2007 – LHG I, No 18, 22.5.2007, Art. 158

Article 215 – (Deleted)

Law of Georgia No 4744 of 11 May 2007 – LHG I, No 18, 22.5.2007, Art. 158

Law of Georgia No 5278 of 11 July 2007 – LHG I, No 29, 27.7.2007, Art. 322

Article 216 – (Deleted)

Law of Georgia No 5278 of 11 July 2007 – LHG I, No 29, 27.7.2007, Art. 322

Article 217 – (Deleted)

Law of Georgia No 5278 of 11 July 2007 – LHG I, No 29, 27.7.2007, Art. 322

Article 218 – (Deleted)

Law of Georgia No 5278 of 11 July 2007 – LHG I, No 29, 27.7.2007, Art. 322

Article 219 – (Deleted)

Law of Georgia No 5278 of 11 July 2007 – LHG I, No 29, 27.7.2007, Art. 322

Article 220 – (Deleted)

Law of Georgia No 5278 of 11 July 2007 – LHG I, No 29, 27.7.2007, Art. 322

Article 221 – (Deleted)

Law of Georgia No 5278 of 11 July 2007 – LHG I, No 29, 27.7.2007, Art. 322

Article 222 – (Deleted)

Law of Georgia No 5278 of 11 July 2007 – LHG I, No 29, 27.7.2007, Art. 322

Article 223 – (Deleted)

Law of Georgia No 5278 of 11 July 2007 – LHG I, No 29, 27.7.2007, Art. 322

Article 224 – (Deleted)

Law of Georgia No 5278 of 11 July 2007 – LHG I, No 29, 27.7.2007, Art. 322

Article 225 – (Deleted)

Law of Georgia No 5278 of 11 July 2007 – LHG I, No 29, 27.7.2007, Art. 322

Article 226 – (Deleted)

Law of Georgia No 5278 of 11 July 2007 – LHG I, No 29, 27.7.2007, Art. 322

Article 227 – (Deleted)

Law of Georgia No 5278 of 11 July 2007 – LHG I, No 29, 27.7.2007, Art. 322

Article 228 – (Deleted)

Law of Georgia No 5278 of 11 July 2007 – LHG I, No 29, 27.7.2007, Art. 322

Article 229 – (Deleted)

Law of Georgia No 5278 of 11 July 2007 – LHG I, No 29, 27.7.2007, Art. 322

Article 230 – (Deleted)

Law of Georgia No 5278 of 11 July 2007 – LHG I, No 29, 27.7.2007, Art. 322

Article 231 – (Deleted)

Law of Georgia No 5278 of 11 July 2007 – LHG I, No 29, 27.7.2007, Art. 322

Article 232 – (Deleted)

Law of Georgia No 5278 of 11 July 2007 – LHG I, No 29, 27.7.2007, Art. 322

http://www.matsne.gov.ge 040.000.000.05.001.000.223

Chapter Five

Limited Use of Property Belonging to another Person

I – Superficies

Article 233 – Concept

1. A plot of land may be transferred to another person for use for a fixed period of time in such a manner as to

grant him/her the heritable and alienable right to erect on or beneath the plot some structure, as well as the right

to lend or lease such right (superficies).

2. Superficies may extend to the part of a tract of land that is not necessary for building but allows for a better use

of the structure.

3. The duration of superficies shall be determined by agreement of the parties and shall not exceed ninety nine

years.

Law of Georgia No 2978 of 27 April 2010 – LHG I, No 24, 10.5.2010, Art. 144

Article 234 – Origin, acquisition and termination of the right of superficies. Ownership of superficies

1. The rules governing the acquisition of immovable things shall accordingly apply to the origin and acquisition of

the right of superficies.

2. A structure erected under the right of superficies shall be deemed an essential component part of the right of

superficies and shall be registered as the property of the person having the right of superficies.

3. Upon termination of the right of superficies, the structure erected under superficies shall become an essential

component part of the plot of land.

Law of Georgia No 2978 of 27 April 2010 – LHG I, No 24, 10.5.2010, Art. 144

Article 235 – Transfer of superficies

If by agreement of the parties the consent of the owner of the plot of land is required to transfer or lease the right

of superficies, the owner may withhold such consent only if there are significant grounds to do so.

Article 236 – Payment for the right of superficies

1. An owner of the right of superficies may be bound by contract to pay fee. This right of the owner of a plot of

land shall be inseparable from the ownership of the plot of land.

2. The right of superficies may be unilaterally terminated by the owner in case of non-fulfilment of this obligation

for two years, unless otherwise provided for under the agreement of the parties.

3. The parties may predetermine the superficies fee for a ten-year period. If economic conditions materially

change, then the parties shall agree on a new fee.

Law of Georgia No 4336 of October 2015 – website, 20.10.2015

Article 237 – Registration of the right of superficies

The right of su 16 perficies shall be entered on the Public Registry only as ranking before all property rights of

non-owners. This ranking may not be altered.

Article 238 – Termination of the right of superficies

1. Termination of the right of superficies shall require consent of the owner.

2. The right of superficies shall not be terminated with the collapse of a structure erected on the plot of land.

Article 239 – Termination of non-gratuitous superficies

1. In case of expiration of the non-gratuitous superficies, unless otherwise provided for under the agreement of the

parties, the owner of the plot of land shall pay the superficiary an appropriate compensation in the amount of two

thirds of the value of the structure erected on the plot of land.

2. The owner of the plot of land may, in return for paying the compensation, extend the right of superficies for the

superficiary for a period for which the structure erected on the plot of land is presumed to exist, unless otherwise

provided for under the agreement of the parties. If the superficiary declines the extension of the right of

superficies, he/she shall lose the right to claim compensation as well.

3. The superficiary may not remove the structure or its component parts after the right of superficies expires.

Law of Georgia No 4336 of 16 October 2015 – website, 20.10.2015

Article 240 – Registration of the claim for compensation in the Public Registry

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1. Following the termination of the right of superficies, the right to claim compensation arising from the

superficies (if any) shall take the place of the right of superficies in the Public Registry and replace it in the same

order.

2. If upon the expiration the right of superficies is still encumbered with a mortgage, then the mortgagee shall

have a lien upon the claim for compensation.

Law of Georgia No 4336 of 16 October 2015 – website, 20.10.2015

Article 241 – Succession in title upon termination of superficies

If superficies is terminated, the owner of the plot of land shall become a party to a tenancy or lease agreement

concluded by the superficiary.

II – Usufruct

Article 242 – Concept

An immovable thing may be transferred to the use of another person in such a manner as to grant to him/her the

right to use this thing as if he/she were the owner, and to exclude third persons from using it; provided, however,

that unlike the owner, he/she has no right to transfer, mortgage or transfer the thing by inheritance (usufruct).

The renting or leasing out of the thing shall require the consent of the owner. After the usufruct is cancelled, the

owner shall become a party in the existing tenancy or lease relations.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Article 243 – Legal regulation of creating a usufruct

The rules governing the acquisition of immovable things shall apply to the creation of usufruct.

Article 244 – Kinds of usufruct

1. Usufruct is either onerous or gratuitous.

2. Usufruct may exist either for a fixed term or for the lifetime of its beneficiary (usufructuary). Usufruct shall be

cancelled by the death of the natural person or liquidation of the legal person in whose favour the usufruct has

been established.

Article 245 – Usufructuary’s rights and duties

1. Before the commencement of usufruct the parties may assess the condition of the things transferable by

usufruct.

2. The usufructuary may not alter the purpose of use without the consent of the owner.

3. The usufructuary shall be entitled to the fruit of, and benefits from, the thing that are not derived from an

ordinary economic use of the thing. In that case he/she shall compensate the owner for damages done to the thing

as a result of such use.

4. The usufructuary shall not be liable for natural wear and tear of the thing. The usufructuary shall cover the

current expenses, make repairs to the thing and take care of the normal economic maintenance of the thing.

5. The usufructuary shall insure the thing for the duration of the usufruct if so provided by law or by agreement of

the parties. If the object of usufruct is a state-owned or municipality-owned immovable thing and the

usufructuary is a legal entity under public law, or a municipality (where the object of usufruct is owned by other

municipality), or a non-entrepreneurial (non-commercial) legal entity established by the State or a municipality,

the thing need not be insured.

6. If the thing has been destroyed, damaged, or unexpected expenses have arisen for its maintenance, the

usufructuary shall immediately notify the owner accordingly. The usufructuary shall tolerate the measures that

the owner undertakes to cure the situation. The owner shall not be obligated to undertake appropriate measures.

If the usufructuary itself undertakes these measures, then at the end of the usufruct the usufructuary may remove

from the thing the objects attached to it by him/her as a result of such measures or demand from the owner proper

compensation for those objects.

7. If the usufructuary transfers, within the limits of normal economic activities, individual objects, then objects

acquired by him/her shall take the place of the transferred objects.

Law of Georgia No 1541 of 17 July 2009 – LHG I, No 21, 3.8.2009, Art. 124

Law of Georgia No 6989 of 1 5 July 2020 – website, 28.7.2020

Article 246 – Termination of usufruct

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1. Upon the end of usufruct the usufructuary shall return the thing to the owner.

2. Usufruct shall be extinguished if both the usufruct and the ownership are in the hands of the same person.

III – Easements

Article 247 – Concept

1. A plot of land or any other immovable property may be used (encumbered) in favour of the

owner of another plot of land or of other immovable property so that the owner may use the plot of land in

particular instances or so that certain actions may not be undertaken on this plot of land or so that the exercise of

a right towards the other plot of land is excluded (easement). The rules for the acquisition of immovable things

shall apply to the creation of easement.

2. Compensation may be determined in the form of periodic payments.

Law of Georgia No 4744 of 11 May 2007 – LHG I, No 18, 22.5.2007, Art. 158

Article 248 – Conditions of easement

1. An easement may exist only when it creates a benefit for the person entitled to use a plot of land.

2. When using an easement, the rightful person shall protect the interests of the owner of the used (servient) plot

of land.

Article 249 – Duty of maintenance of an installation

If, in order to properly use an easement, there is an installation on the servient plot of land, then the rightful

person shall maintain the installation. At the same time, the parties may determine that the owner of the servient

plot of land maintain the structure to the extent that the interests of the rightful person require this.

Article 250 – Effect of division of a plot of land

If the plot of land of the rightful person is divided, then the easement shall continue to exist on each part

separately. In such case, the use of the easement shall be permissible only if it does not become more burdensome

for the owner of the servient plot of land.

Article 251 – Parts released from easement following division

Where the servient plot of land is divided, then, if the use of the easement is restricted to a particular part of the

servient plot of land, the parts that lie outside the area of use shall be released from the easement.

Article 252 – Protection of the rights of the rightful person

If the rightful person is obstructed in the exercise of his/her rights, he/she shall have the same right to avoid the

obstruction as if he/she were a bona-fide possessor.

Article 253 – Personal easement

1. An immovable thing may be encumbered with an easement for the benefit of a specific person under the

conditions provided for in Article 247. Such encumbrance may be expressed in such a manner that the rightful

person, excluding the owner, may use a building or a part of the building as a residence for himself/herself or

share it with his/her family.

2. A personal easement restricted in the manner defined in paragraph 1 of this article may not be transferred to

another person.

Chapter Six

Title to Property as a Security for a Claim

I – Pledge

Article 254 – Concept

1. A debtor’s or a third person’s movable things and/or intangible property that may be transferred to another

person may be used as security for a monetary or non-monetary claim in such a manner that the creditor

(pledgee) acquires the right to satisfy his/her claim by selling or, if the parties so agree, by taking possession of the

pledged property (pledged item) if the debtor does not fulfil or improperly fulfils his/her obligation.

2. The pledgee has a pre-emptive right over other creditors to satisfy his/her claim at the expense of the pledged

item.

http://www.matsne.gov.ge 040.000.000.05.001.000.223

3. A pledge may secure future or contingent claims.

3 1 . In the case of pledged intangible property, the procedure established by Article 7 of the Organic Law of

Georgia on Agricultural Land Ownership shall also be taken into account.

3 2 . A pledger shall not pledge intangible property that is an asset included in a collateral pool as defined in Article

2(1)(b) of the Law of Georgia on Bonds Secured by Mortgages.

4. A pledge securing a non-monetary claim shall be valid only if it can be expressed in a monetary form.

4 1 . A pledge may extend to a thing or part of a thing, the combination of things or their part and/or to intangible

property or to the whole movable property.

5. The things and intangible property that the pledger will acquire in future (future property) may be used as

security for a claim. Future property shall become security for a claim upon its acquisition and the priority of a

pledge with respect to future property shall be determined by the time of its registration.

6. A transport vehicle defined under Article 53(1) of the Law of Georgia on Traffic and/or an auxiliary technical

equipment of an agricultural machine, and a railway means of transportation may not be used as security for a

claim proceeding from a loan/credit agreement to be granted/granted to a natural person (including to an

individual entrepreneur).

(Article 254(6) was declared invalid) – Decision No 1/4/1380 of the Constitutional Court of Georgia of 18

December 2020 – website, 22.12.2020

7. (Deleted – 22.7.2021, No 808).

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Law of Georgia No 4323 of 9 March 2011 – website, 22.3.2011

Law of Georgia No 3315 of 21 July 2018 – website, 7.8.2018

Law of Georgia No 4851 of 25 June 2019 – website, 2.7.2019

Decision No 1/4/1380 of the Constitutional Court of Georgia of 18 December 2020 – website, 22.12.2020

Law of Georgia No 808 of 22 July 2021 – website, 26.7.2021

Law of Georgia No 2117 of 29 November 2022 – website, 16.12.2022

Article 255 – Types of a pledge

Pledge types shall be:

a) a possessory pledge;

b) a registered pledge.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Article 256 – Scope of a pledge

1. A pledge secures a claim and other additional claims relating to it (including interest and contractual penalties)

as well as the expenses related to property maintenance, court and sale costs, unless otherwise provided by law or

an agreement between the parties.

2. A pledge shall extend to the fruits derived from a pledged item, unless otherwise provided by agreement

between the parties.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Law of Georgia No 4323 of 9 March 2011 – website, 22.3.2011

Law of Georgia No 5668 of 28 December 2011 – website, 16.1.2012

Article 257 – Possessory pledge

1. Possessory pledge in a movable thing arises by agreement of the parties and by transferring the thing into the

possession of the pledgee or a third person designated by the pledgee.

2. If the thing is already in the possession of the pledgee or a third person designated by the pledgee, the

agreement of the parties shall suffice for a pledge to arise.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Article 258 – Registered pledge

1. A registered pledge shall arise by entering into a written transaction and registering the pledge stipulated in the

transaction with the Public Registry (except as provided for in paragraph 4 of this article). In this case, a movable

thing need not be transferred to the pledgee’s possession.

2. The transaction shall indicate:

a) date of execution;

http://www.matsne.gov.ge 040.000.000.05.001.000.223

b) details of the pledger, the pledgee and a possible third person debtor;

c) description of the pledged item with general or specific characteristics so that it can be identified. If the pledged

item is the entire movable property, it need not be described, unless otherwise determined by agreement of the

parties;

d) a general or specific description of the secured principal claim and the maximum sum with which the secured

claim is to be satisfied.

3. The procedure for registration of a pledge shall be determined by law.

3 1 . Relations with respect to financial collaterals are governed by the Law of Georgia on Financial Collaterals,

Mutual Setoffs and Derivatives.

4. For the pledge registered on vehicles and auxiliary equipment of agricultural machines specified in Article 53(1)

of the Law of Georgia on Road Traffic to arise, the transaction shall be made in writing and the pledge stipulated

in the transaction shall be registered with the Legal Entity under Public Law (LEPL) – Service Agency of the

Ministry of Internal Affairs of Georgia (‘the Service Agency’). At the same time for the transaction to be valid the

transaction or the signatures of the parties need not be authenticated if:

a) the parties to the transaction sign the transaction in the registration authority in the presence of an authorised

person;

b) the pledgee and the Service Agency have signed a contract for registration of a pledge on the vehicle by using

an electronic document system.

5. The Minister of Internal Affairs of Georgia shall determine the procedure for the registration by the Service

Agency of a pledge on vehicles and auxiliary equipment of agricultural machines specified in Article 53(1) of the

Law of Georgia on Road Traffic based on paper or electronic documents.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Law of Georgia No 3879 of 8 December 2006 – LHG I, No 48, 22.12.2006, Art. 321

Law of Georgia No 4310 of 29 December 2006 – LHG I, No 2, 4.1.2007, Art. 35

Law of Georgia No 4744 of 11 May 2007 – LHG I, No 18, 22.5.2007, Art. 158

Law of Georgia No 314 of 2 October 2008 – LHG I, No 24, 20.10.2008, Art. 160

Law of Georgia No 4323 of 9 March 2011 – website, 22.3.2011

Law of Georgia No 6311 of 25 May 2012 – website, 12.6.2012

Law of Georgia No 1833 of 24 December 2013 – website, 3.1.2014

Law of Georgia No 5674 of 20 December 2019 – website, 31.12.2019

Article 258 1 – Certificate of pledge

1. If a debtor fails to fulfil the obligation under Article 281(1) of this Code within two weeks after the pledgee’s

written request, the Service Agency shall issue, based on the pledgee’s application, a certificate of pledge.

2. A certificate of pledge is an enforceable act evidencing the fact that the pledge provided for in Article 258(4) of

this Code has been registered with the Service Agency. In the circumstances determined by the legislation of

Georgia the pledgee may request the authorised body (official) to transfer the pledged item to his/her possession to

satisfy the claim secured by the pledge.

3. A certificate of pledge shall not be issued if the registered pledge transaction does not contain the agreement of

the parties required by Article 283(1) and/or Article 260 1 of this Code for securing the claim.

4. The responsibility for the legitimacy of the request for the certificate of pledge submitted by the pledgee to the

Service Agency shall rest with the pledgee.

5. The form and procedure for issuing a certificate of pledge shall be determined by an order of the Minister of

Internal Affairs of Georgia.

Law of Georgia No 1541 of 17 July 2009 – LHG I, No 21, 3.8.2009, Art. 124

Law of Georgia No 1833 of 24 December 2013 – website, 3.1.2014

Article 259 – Procedure for pledging claims and securities

1. Claims shall be pledged by signing a written transaction and registering the right under the transaction with the

Public Registry. The requirements laid down in Article 258(2) of this Code shall apply to such transactions.

2. Until the debtor is notified in writing about pledging a claim, the debtor may perform the obligation before the

holder of the claim. In that case, the procedure under Article 264(1) shall apply.

3. Securities shall be pledged under the procedure established for their acquisition. The right of pledge on

uncertificated securities shall originate in accordance with the Law of Georgia on Holding Uncertificated

Securities.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

http://www.matsne.gov.ge 040.000.000.05.001.000.223

Law of Georgia No 3879 of 8 December 2006 – LHG I, No 48, 22.12.2006, Art. 321

Law of Georgia No 3726 of 16 November 2023 – website, 7.12.2023

Article 260 – Procedure for pledging things in pawnshops

1. Things in a pawnshop shall be pledged by a written agreement between the parties and by transferring things

into the direct possession of the pawnshop.

2. (Deleted – 21.7.2018, No 3315).

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Law of Georgia No 3315 of 21 July 2018 – website, 7.8.2018

Article 260 1 – Transfer of pledged items to the creditor (pledgee)

A pledged item may be transferred to the creditor (pledgee) on the grounds provided for in this Law only in the

case of a registered pledge. Such transfer shall be expressly indicated in the agreement.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Article 261 – Rights and duties of a pledgee and a pledger

1. A pledger or a pledgee in the case of a registered pledge, and a pledgee or a third person designated by the

pledgee in the case of a possessory pledge, shall properly keep and maintain the pledged item in their possession.

Each party may inspect the condition (including size, weight, storage conditions) of the pledged item that is in the

possession of the other party.

2. If a pledged item is held by the pledger, he/she may receive benefit from the pledged item. A pledgee may

receive benefit from the pledged item in his/her possession if so provided by agreement of the parties. The pledgee

shall be presumed to be entitled to the fruit of the pledged item if the pledged item bears fruit by its nature. The

received benefit shall be set off against the secured claim. Upon request of the pledger, the pledgee shall present to

the pledger an account of the received benefits.

3. A pledgee may claim from the pledger reimbursement of necessary expenses incurred on the pledged item. The

procedure for reimbursement of other expenses shall be determined under the rules governing agency without

specific authorisation.

4. If a pledger defaults on his/her obligation to properly keep and maintain the pledged item, the pledgee may

demand that the pledged item be handed over to him/her or to a third person. If the pledgee defaults on his/her

obligation to properly keep and maintain the pledged item, the pledger may demand that the pledged item be

handed over to a third person.

5. If a pledged item is stock or a share in a business entity, then in making decisions or entering into transactions

in connection with the business entity, the pledger shall act in good faith in his/her and the pledgee’s interests.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Article 262 – Insurance of pledged items

A pledger shall insure the pledged item only if so provided by law or by agreement of the parties.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Article 263 – Rights of a pledger that is not a personal debtor of a pledgee

A pledger that is not a personal debtor of the claim secured by a pledge may assert against the pledgee the

defences to which a personal debtor is entitled, including the defences that the pledgee’s personal debtor waived

after the creation of the pledge.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Article 264 – Substitution

1. If a claim is pledged and the debtor performs an obligation before the expiry of the pledge, then performance

shall take the place of the claim, unless the parties agreed otherwise.

2. Any compensation, including insurance compensation received for the loss, damage, destruction or devaluation

of the pledged item shall take the place of the pledged item, unless otherwise provided for by agreement of the

parties.

3. In the cases provided for in paragraph 2 of this article, the pledger may purchase, with the sum received by

him/her, an item substituting for the lost, damaged, destroyed or devalued item and the purchased item shall take

the place of the pledged item.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Law of Georgia No 4323 of 9 March 2011 – website, 22.3.2011

http://www.matsne.gov.ge 040.000.000.05.001.000.223

Article 265 – Legal consequences of processing a pledged item and/or merging it with another movable thing

1. A pledge shall not be terminated if a pledged item is processed and/or merged with another movable thing in

such a way that restoring it to the original condition is impossible or involves considerable expense, unless

otherwise provided by agreement of the parties. If ownership is transferred as a result of processing a pledged item

and/or merging it with another movable thing, the procedure under Article 196 of this Code shall apply.

2. In the cases provided for in paragraph 1 of this article, the pledgee’s prior consent shall be required to process a

pledged item and/or merge it with another movable thing, unless otherwise provided by agreement of the parties.

3. In the cases provided for in this article, the priority of claims arising from a pledge shall be determined by the

time of creation of the pledge which existed before the pledged item was processed and/or merged with another

movable thing.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Law of Georgia No 4323 of 9 March 2011 – website, 22.3.2011

Article 266 – Making a transaction on pledged items

1. The parties may agree that the pledger will not transfer or re-pledge the pledged item until the pledge is

terminated.

2. If the pledger defaults on his/her obligation under paragraph 1 of this article, the pledgee may immediately

satisfy his/her claim.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Article 267 – Re-pledging pledged items and priority of pledges

1. The same property may be re-pledged several times. The priority of pledges shall be determined according to

the time of their submission for registration.

2. If a pledged item is future property and the pledger purchases such property, the pledge created under the

previous owner shall prevail over the pledge created under the new owner irrespective of the date of their

creation.

3. Where so provided for in Articles 568, 586, 596, 634, 685 and 796 of this Code, the pledgee shall have priority

in satisfying his/her claim at the expense of the pledged item over all other pledgees.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Law of Georgia No 4744 of 11 May 2007 – LHG I, No 18, 22.5.2007, Art. 158

Article 268 – Protecting the rights of a pledgee

If the exercise of a pledgee’s rights is interrupted, the pledgee may exercise the same rights that the owner does.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Article 269 – Transfer of a pledge to a new creditor

1. By transferring a claim to another person, the pledge shall also be transferred to such person (new creditor).

2. A pledge shall be terminated if the new creditor does not request, within a reasonable time after the assignment

of a claim secured with possessory pledge, the transfer of the pledged item to him/her or to a person authorised by

him/her or the registration of the pledge.

3. Each third party whose legal status may be worsened by the sale of the pledged item may satisfy the pledgee’s

claim and thereby acquire his/her rights against the pledger or a possible third party debtor.

4. A pledge may not be transferred to another person without transfer of the relevant claim. If during the transfer

of a claim the pledge is not transferred, the pledge shall be terminated.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Article 270 – Termination of a pledge due to cancellation of a claim

A pledge shall be terminated upon cancellation of the claim for the security of which it exists.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Article 271 – Termination of a pledge due to perishing of pledged items

A pledge shall be terminated if the pledged item physically ceases to exist.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Article 272 – Termination of a pledge due to its waiver

1. A registered pledge shall be terminated if the pledgee waives the pledge by way of registration.

http://www.matsne.gov.ge 040.000.000.05.001.000.223

2. A possessory pledge shall be terminated if possession reverts to the pledger or the pledgee waives the pledge.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Article 273 – Termination of a pledge due to transfer of pledged items to a pledgee (consolidation)

A pledge shall be terminated if the pledged item is transferred into the ownership of the pledgee.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Article 274 – Transfer of pledged items

1. If the pledged item is transferred, the pledged property shall also be transferred to the buyer, except as provided

for in paragraphs 3 and 4 of this article.

[1. If a pledged item is alienated, the pledged property shall be transferred to the buyer, except as provided for by

paragraphs 3-5 of this article. (Shall become effective from 1 January 2027)]

2. If the pledged item is transferred in the case of registered pledge, the pledger and the buyer shall be jointly

liable to register the buyer as a pledger with the Public Registry and for vehicles and auxiliary equipment of

agricultural machines defined by Article 53(1) of the Law of Georgia on Road Traffic, the pledger and the buyer

shall be jointly liable to register the buyer as a pledger with the Service Agency. If the pledger and the buyer fail

to meet the above requirement, they shall be jointly and severally liable for any damages caused by the non-

performance of the requirements.

3. If the pledger transfers the pledged item in the case of a possessory pledge, the pledge shall be terminated and

the buyer shall acquire non-encumbered property if the pledgee or the person authorised by him/her transfers the

possession of the pledged item to the buyer.

4. If the pledger transfers the pledged item during the course of ordinary business activity, the buyer shall acquire

non-encumbered property irrespective of whether or not the buyer had knowledge of the pledge. This rule shall

not apply if the buyer and the pledger acted in bad faith.

[5. If accounts payable are transferred to a factor as a result of factoring defined by the Law of Georgia on

Factoring, the right of pledge on the accounts payable shall cease to exist and the unpledged property shall be

transferred into the ownership of the factor. In that case, the right of pledge shall continue to exist on the income

earned as a result of the transfer of the said accounts payables into the ownership of the factor. If a part of the

accounts payable are transferred to a factor, this rule shall only apply to the transferred part of the accounts

payable. (Shall become effective from 1 January 2027)]

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Law of Georgia No 4310 of 29 December 2006 – LHG I, No 2, 4.1.2007, Art. 35

Law of Georgia No 1833 of 24 December 2013 – website, 3.1.2014

Law of Georgia No 1454 of 1 April 2026 – website, 6.4.2026

Article 275 – Pledgee’s obligation upon termination of a pledge

1. If a pledge is terminated, the pledgee shall return the pledged item that is in his/her possession to the pledger.

2. If a registered pledge is terminated, the pledger may demand that the pledgee immediately register the

termination of the pledge with the Public Registry. If the registered pledge on vehicles and auxiliary equipment of

agricultural machines defined by Article 53(1) of the Law of Georgia on Road Traffic is terminated the pledgee

shall immediately register the termination of the pledge with the Service Agency. If the pledger does not demand

an immediate registration of the termination of the pledge, the pledgee shall apply, within five business days after

termination of the pledge, to the Service Agency for registration of termination of the pledge. If this obligation is

not fulfilled, the pledger may claim damages from the pledgee.

3. The pledger may also demand the registration of the termination of a pledge. In that case, the application for

registration of the termination of the pledge shall be accompanied by a written document issued by the pledgee

that confirms termination of the pledge.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Law of Georgia No 4310 of 29 December 2006 – LHG I, No 2, 4.1.2007, Art. 35

Law of Georgia No 1833 of 24 December 2013 – website, 3.1.2014

Article 276 – Satisfaction of a pledgee

1. The pledgee shall be satisfied by selling the pledged item or transferring the pledged item to the pledgee to

satisfy his/her claim, unless otherwise provided by law.

2. A claim shall be deemed to have been satisfied even if the proceeds from the sale of the pledged item are not

enough to cover the claim secured by pledge or the value of the pledged item does not fully cover the amount of

the claim, unless otherwise provided by agreement of the parties.

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3. If a creditor/loan holder is not an entity subject to the supervision of the National Bank of Georgia, a claim

proceeding from a loan/credit agreement granted to a natural person (including to an individual entrepreneur)

shall be considered satisfied even in the case when the amount received as a result of selling a pledged item (items)

or a pledged item (items) and a mortgaged immovable thing (things) is not sufficient to cover the claim secured by

a pledge or a pledge and a mortgage, or the price of a pledged item (items) or the price of a pledged item (items)

and a mortgaged immovable thing (things) does not fully cover the amount of the claim. No other agreement

between the parties shall be allowed. The National Bank of Georgia may establish for entities subject to its

supervision a procedure different from the one provided for in this paragraph and/or an additional procedure.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Law of Georgia No 3315 of 21 July 2018 – website, 7.8.2018

Article 277 – (Deleted)

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Article 278 – Right to demand the sale of pledged items and transfer of pledged items to a pledgee

The pledgee may demand that the pledged item be sold or transferred to him/her if the debtor does not fulfil or

improperly fulfils the claim secured by the pledge.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Article 279 – Right to sell pledged items repeatedly

1. If a pledged item has been re-pledged several times, any pledgee may demand its sale upon the maturity of the

claim.

2. A pledgee whose pledge ranks before the right of a selling pledgee may give the lower ranking pledgee, within

two weeks after the date of receipt of a written notice of sale from the lower ranking pledgee, a notice that:

a) he/she exercises the right to sell the pledged item as provided for in paragraph 1 of this article. In such case, the

lower ranking pledgee cannot make the sale and the obligation to make the sale shall rest with the higher ranking

pledgee;

b) he/she agrees to the sale of the pledged item by the lower ranking pledgee provided that his/her claim is

satisfied on a priority basis from the proceeds of the sale;

3. In the cases of a sale under paragraph 2 of this article, the proceeds of the sale shall go towards satisfying the

higher ranking pledgee’s claim before the lower ranking pledgee’s claim.

4. If the higher ranking pledgee does not exercise the rights under paragraph 2 of this article, the pledged item

shall remain encumbered with the rights of the pledgees whose pledges precede the right of the selling pledgee.

5. The selling pledgee and the buyer shall register the buyer as a pledger with the Public Registry or, if so

provided by law, with the Service Agency. If selling pledgee and the buyer default on this obligation, they shall be

jointly liable for any damages resulting from such default.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Law of Georgia No 4310 of 29 December 2006 – LHG I, No 2, 4.1.2007, Art. 35

Article 280 – Distribution of sales proceeds

1. The proceeds from the sale of a pledged item shall first cover the expense of the sale and then satisfy the selling

pledgee’s claim.

2. The pledgee selling an item that has been re-pledged several times shall deposit the sum remaining after the

payment of the sale expenses and satisfaction of his/her claim with a notary to ensure the satisfaction of the claims

of the subsequent pledgees. The claim of each subsequent pledgee shall be satisfied after the claim of the previous

pledgee has been satisfied in full.

3. The sum remaining after all the claims secured by the pledge have been satisfied in full shall be given to the

pledger if there are no subsequent pledgees.

4. The selling pledgee shall be liable before the other pledgees for damages caused by the non-fulfilment of the

obligation under paragraph 2 of this article.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Article 281 – Transferring pledged items to the pledgee entitled to sell

1. The pledgee entitled to demand that a pledged item be sold or transferred to him/her may demand that the

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pledged item be transferred to his/her possession. The pledgee’s demand for transfer of the pledged item to his/her

possession shall be satisfied immediately.

2. If satisfaction of the claim depends on the performance of a certain legal act, then the pledgee may demand that

the pledger perform the act. If the pledger does not fulfil the pledgee’s demand within two weeks, the pledgee

may perform the act in relation to third persons on behalf of the pledger.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Law of Georgia No 1541 of 17 July 2009 – LHG I, No 21, 3.8.2009, Art. 124

Article 281 1 – Transferring a pledged vehicle and/or auxiliary equipment of agricultural machines to a pledgee

1. The pledgee may demand, without applying to a court, by presenting the certificate of pledge to an

enforcement agency, to enforce the transfer into his/her possession of a pledged vehicle and/or the pledged

auxiliary equipment of an agricultural machine defined by Article 53(1) of the Law of Georgia on Road Traffic.

2. An enforcement agency shall transfer the pledged vehicle and/or the pledged auxiliary equipment of an

agricultural machine defined by Article 53(1) of the Law of Georgia on Road Traffic to the pledgee according to

the procedures laid down by the Law of Georgia on Enforcement Proceedings.

3. If different pledgees present a certificate of pledge to an enforcement agency requesting the transfer to their

possession of the same vehicle and/or the same auxiliary equipment of an agricultural machine defined by Article

53(1) of the Law of Georgia on Road Traffic, the pledged item shall be assigned to the pledgee with a pre-emptive

right to satisfaction of the claim secured by the pledge.

4. Appealing a certificate of pledge shall not suspend its enforcement.

5. The pledgee who received possession of a vehicle and/or auxiliary equipment of an agricultural machine defined

by Article 53(1) of the Law of Georgia on Road Traffic shall sell it or register title according to the procedures laid

down by the legislation of Georgia.

6. The expenses relating to the enforced transfer of the vehicle and/or auxiliary equipment of an agricultural

machine defined by Article 53(1) of the Law of Georgia on Road Traffic to the pledgee’s possession shall be borne

by the debtor.

7. The liability for the legitimacy of submitting the certificate of pledge to the enforcement agency shall rest with

the pledgee.

Law of Georgia No 1541 of 17 July 2009 – LHG I, No 21, 3.8.2009, Art. 124

Law of Georgia No 1833 of 24 December 2013 – website, 3.1.2014

Article 282 – Obligation to give notice of possible sale of pledged items

1. A pledgee shall give the pledger and other pledgees written notice of possible sale of the pledged item two

weeks before the sale.

2. (Deleted).

3. The sale may be made even without any prior notice to the pledger and other pledgees if:

a) there is a real risk that the market or stock price of the pledged item will fall;

b) the pledged item is perishable.

4. The pledgee forfeits the right to sell the pledged item if a secured claim is satisfied at any time between the

dates of service of the notice referred to in paragraph 1 of this article and sale of the pledged item.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Law of Georgia No 4310 of 29 December 2006 – LHG I, No 2, 4.1.2007, Art. 35

Law of Georgia No 4744 of 11 May 2007 – LHG I, No 18, 22.5.2007, Art. 158

Article 283 – Sale of pledged items

1. A pledgee may directly sell a pledged item if there is agreement between the pledgee and the pledger about it.

When the pledged item is sold directly by the pledgee by direct sale, the pledgee shall sell the pledged item at a

fair and reasonable price taking into account the pledger’s, other pledgees’ and his/her interests. In the case of

failure to fulfil this obligation the pledgee shall be liable for damages caused to the pledger and other pledgees.

2. If the pledged item has a stock or market price, the pledgee may entrust the sale of the pledged item to a special

trade agency.

3. If a pledged claim is sold with the debtor’s performance in favour of the pledgee, the pledgee shall present to

the pledger a report on the debtor’s performance in favour of the pledgee.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Article 284 – Agreement of the parties on other procedures of sale

1. The pledgee and the pledger may indicate in a written agreement that the pledged item may be assigned to the

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pledgee or sold based on a writ of execution issued by a notary. In such case, the agreement between the parties

shall be notarised.

2. The pledgee and the pledger may also agree on procedures of sale different from those given in this chapter. In

such case, the pledged item shall be sold at a reasonable and fair price in the pledger’s and other pledgees’ interests

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Law of Georgia No 3879 of 8 December 2006 – LHG I, No 48, 22.12.2006, Art. 321

Article 285 – Effects of the sale of pledged items

1. The sale of a pledged item shall result in the transfer of unencumbered ownership to the buyer, except as

provided for in Article 279(4).

2. If the pledgee unlawfully sells the pledged item, the buyer shall acquire ownership if he/she is in good faith in

relation to that fact.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

Article 285 1 – Report on the sale of pledged items

The selling pledgee shall present, within a reasonable period after the sale, without undue delay, to the pledger a

report of the sale of the pledged item that shall include information on the expenses related to the sale, sale

proceeds and the use of such proceeds.

Law of Georgia No 1826 of 30 June 2005 – LHG I, No 41, 19.7.2005, Art. 284

II – Mortgage

Article 286 – Concept

1. An immovable thing may be used (encumbered) for securing a claim in such a manner as to grant to the secured

creditor the right to receive satisfaction out of the thing before other creditors through the sale or transfer of the

thing into his/her ownership (mortgage).

2. A mortgage may likewise be used to secure future or contingent claims if these claims can be determined at the

time of creation of the mortgage.

3. A claim secured by a mortgage may be substituted by another claim. Such substitution shall require an

agreement between the owner and the creditor (mortgagee) and registration of the agreement in the Public

Registry.

3 1 . If agricultural land is used (encumbered) for securing a claim, the procedure established by the Organic Law of

Georgia on Agricultural Land Ownership shall also be taken into account.

4. An immovable thing, and a water and air means of transportation owned by a natural person or another natural

person may not be used as security for a claim proceeding from a loan/credit agreement to be granted/granted to

the natural person (including to the individual entrepreneur).

5. The restriction under paragraph 4 of this article shall not apply to the security of a claim proceeding from a

loan/credit agreement to be concluded/concluded by a commercial bank, a micro-bank, a microfinance

organisation, a non-bank depository institution – the credit union, and a loan holding entity that are subject to the

supervision of the National Bank of Georgia under the Organic Law of Georgia on the National Bank of Georgia.

6. The restriction under paragraph 4 of this article shall not be effective if the agreement concluded between the

parties specifies that a mortgaged immovable thing will be transferred to a natural person (including to an

individual entrepreneur) for using as a dwelling room, or to a mortgagee legal person for using as a domicile (legal

address). In addition, if two rights to mortgage have been registered in favour of one and the same natural person

(including an individual entrepreneur) or legal person, the restriction under paragraph 4 of this article shall apply

to him/her/it when concluding the third and each following mortgage agreement.

[6 1 . Using of residential immovable property of a natural person (including an individual entrepreneur) as a

security for a claim on the basis of a factoring, including a reversed factoring, agreement shall be prohibited,

unless confirmed that at least one residential immovable property has been registered in the public registry by

adding the said security for a claim into the ownership of the provider/of a member of his/her household. (Shall

become effective from 1 January 2027)]

7. Parties to a mortgage agreement filed with a registration authority for registration of the right to mortgage shall

be responsible for the content of the mortgage agreement, and for the validity and lawfulness of the facts specified

therein.

Law of Georgia No 4744 of 11 May 2007 – LHG I, No 18, 22.5.2007, Art. 158

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

http://www.matsne.gov.ge 040.000.000.05.001.000.223

Law of Georgia No 3315 of 21 July 2018 – website, 7.8.2018

Law of Georgia No 4851 of 25 June 2019 – website, 2.7.2019

Law of Georgia No 2622 of 22 February 2023 – website, 10.3.2023

Law of Georgia No 1454 of 1 April 2026 – website, 6.4.2026

Article 287 – Blanket mortgage

If a claim is secured by a mortgage upon a number of immovable things (blanket mortgage), then each of these

things shall be used to satisfy the claim in common. The creditor may satisfy the claim by any of the things at

his/her discretion, unless the parties agreed otherwise.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Article 288 – Owner’s mortgage

If a claim secured by a mortgage either has not arisen or is extinguished or is transferred to the owner of the

immovable thing, then the mortgage shall also transfer to the owner (owner’s mortgage).

Article 289 – Registration of mortgage

1. A mortgage shall acquire legal force upon its registration in the Public Registry. The registration shall be carried

out by one of the parties presenting the contract made according to the procedures laid down by Article 311 1 of

this Code. The contract shall indicate the identities of the owner of the immovable thing, the mortgagee and any

possible third party debtor. By agreement of the parties, the contract may also indicate the extent of the secured

claim, the interest, the period of performance and other conditions.

1 1 . A mortgage contract made to secure a claim arising from a loan agreement shall be certified by a notary. In

certifying the mortgage contract, the notary shall inform the parties to the contract of the legal implications of

their violation of the obligations under the loan agreement and the mortgage contract.

1 2 . To register a mortgage with the Public Registry, the notary shall follow the procedures provided by the

legislation of Georgia. The procedures and conditions for registering a mortgage with the Public Registry shall be

determined by an order of the Minister of Justice of Georgia.

1 3 . The condition under paragraph 1 1 of this article shall not apply to mortgage contracts made to secure the

claims of commercial banks, micro-banks, microfinance organisations, non-bank deposit institutions – credit

unions, and investment funds authorised and registered on the basis of the Law of Georgia on Investment Funds.

2. If the parties so agree, at the request of the creditor, the Public Registry shall issue a Certificate of Mortgage.

The issuance of the Certificate of Mortgage shall be recorded in the Public Registry.

3. The mortgage contract, for which a Certificate of Mortgage has been issued by agreement of the parties, shall be

certified by a notary. Any legal act under the mortgage contract that requires certification by a notary shall be

certified by the same notary who certified the mortgage contract.

4. Only one Certificate of Mortgage shall be issued for a blanket mortgage.

Law of Georgia No 3879 of 8 December 2006 – LHG I, No 48, 22.12.2006, Art. 321

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Law of Georgia No 1864 of 25 December 2013 – website, 30.12.2013

Law of Georgia No 1901 of 23 December 2017 – website, 11.01.2018

Law of Georgia No 2622 of 22 February 2023 – website, 10.3.2023

Law of Georgia No 3942 of 15 December 2023 – website, 27.12.2023

Article 289 1 – Certificate of Mortgage

1. A Certificate of Mortgage is a security certifying the right of its legal holder to:

a) demand the fulfilment of the obligations arising from the contract;

b) satisfy his/her claim at the expense of the mortgaged item if any obligation is not fulfilled.

2. The Certificate of Mortgage shall be made into one copy.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Article 289 2 – Contents of a Certificate of Mortgage

1. A Certificate of Mortgage shall contain:

a) indication of ‘Certificate of Mortgage’ in the title;

b) name and address of the mortgagee;

c) name and address of the debtor;

d) name and address of the owner of the immovable thing;

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e) registration code of the mortgaged property, address of the mortgaged item;

f) indication of the registration of the Certificate of Mortgage with the Public Registry, indicating the relevant

details;

g) indication of whether the mortgaged item or any part of it has been encumbered with any other mortgage or

with any other real rights or obligations;

h) place and date of drafting the mortgage contract;

i) extent of the secured claim;

j) due date for the performance of an obligation under the mortgage contract, but if the obligation is to be

performed in parts – due dates for the performance of such parts;

k) date of issue of the Certificate of Mortgage.

2. The validity of a Certificate of Mortgage shall be confirmed with the seal of the Public Registry.

3. Violation of the requirements indicated in paragraphs 1 and 2 of this article shall render the Certificate of

Mortgage void.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Article 289 3 – Exercising the rights arising from a Certificate of Mortgage

1. The actual holder of a Certificate of Mortgage shall be deemed to be its legal holder, unless proved to the

contrary.

2. If a Certificate of Mortgage exists, a secured claim shall be fulfilled only if the Certificate of Mortgage is

presented. Upon satisfaction of his/her claim, the creditor shall hand over the Certificate of Mortgage to the

performer of the obligation.

3. Upon a partial satisfaction of the claim, the creditor shall enter a relevant notation in the Certificate of

Mortgage.

4. By depositing a sum to the deposit account of the notary who certified the mortgage contract, the debtor shall

be exempt of his/her obligation to the creditor.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Article 289 4 – Assignment of a Certificate of Mortgage

1. A claim provided for in the Certificate of Mortgage shall be assigned with a notarised signature of the assignor

of the Certificate of Mortgage.

2. If a claim is assigned by selling the Certificate of Mortgage at auction, the indication ‘Sold at Auction’ shall be

made on the Certificate of Mortgage and confirmed with a specialist’s notarised signature.

3. Any prohibition of the assignment of a Certificate of Mortgage to another person shall be void.

4. The person in whose favour the claim has been assigned shall notify the debtor to that effect.

5. The procedure established by the Organic Law of Georgia on Agricultural Land Ownership shall also be taken

into account in assigning a claim.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Law of Georgia No 4851 of 25 June 2019 – website, 2.7.2019

Article 289 5 – Declaring a Certificate of Mortgage invalid

If a Certificate of Mortgage is damaged, lost or destroyed, the holder of the Certificate of Mortgage shall notify the

Public Registry. In that case, the court shall declare it invalid under the general procedure (revocation

proceedings).

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Article 289 6 – Pledging a Certificate of Mortgage

1. A Certificate of Mortgage may be pledged in favour of its holder or another person according to the procedures

laid down for pledging securities.

2. The pledge of a Certificate of Mortgage shall be registered with the Public Registry.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Article 289 7 – Cancellation of a Certificate of Mortgage

1. A Certificate of Mortgage shall be cancelled:

a) if the claim arising from the Certificate of Mortgage is satisfied;

b) if the Certificate of Mortgage is voluntarily delivered to the owner of the immovable thing.

2. The cancellation of a Certificate of Mortgage shall be registered with the Public Registry.

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Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Article 289 8 – Priority of a Certificate of Mortgage over the Public Registry records

If there is any discrepancy between the Certificate of Mortgage and a Public Registry record, the Certificate of

Mortgage shall prevail.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Article 290 – Re-mortgaging an immovable thing

An immovable thing may be re-mortgaged several times. The order of priority shall be determined by the date of

registration of mortgage applications.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Article 291 – Right of the mortgagor who is not a personal debtor of the claim secured by a mortgage

1. If the mortgagor is not a personal debtor with respect to the claim secured by the mortgage, then he/she may

still assert against the mortgagee any defences to which only the personal debtor is rightful, including defences

resulting from setting off monetary obligations and defences against the claim.

2. If the time of performance of a claim depends upon a notice of dissolution of a legal relationship, then the

dissolution shall be deemed valid only if it is declared by the owner to the creditor or by the creditor to the

owner.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Article 292 – Owner’s right upon satisfaction of the creditor

1. The owner may satisfy the creditor when the performance of the claim is due, or when the personal debtor is

entitled to perform the corresponding act.

2. If the owner is not a personal debtor, then he/she shall assume the claims when he/she satisfies the creditor.

3. (Deleted).

Law of Georgia No 4744 of 11 May 2007 – LHG I, No 18, 22.5.2007, Art. 158

Article 293 – Extension of mortgage to the fruit of an immovable thing

A mortgage shall not extend to the fruit of an immovable thing unless otherwise provided by agreement of the

parties.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Article 294 – Duty to maintain a mortgaged thing

1. The owner shall maintain the thing in such a way as not to endanger the purpose of the mortgage. In the case of

any danger, the creditor may set an appropriate period for the owner to eliminate the danger. If the mortgaged

thing is in the creditor’s possession, the duty to maintain the thing shall rest with the creditor.

2. If the thing is insured, the insurer may pay the insurance proceeds to the policyholder after the deterioration of

the situation only when the creditor has already been informed of the damage. The creditor may object to the

payment if he/she has fears that the payment will not be used to restore the thing.

3. If it is ascertained that the owner fails in his/her duty to maintain the thing, the creditor may demand that the

thing be transferred to him/her for administration. A court shall make a decision with respect to such demand.

4. An agreement under which the owner assumes an obligation with the creditor not to transfer, use or otherwise

encumber the immovable thing shall be void, unless otherwise provided by law. The validity of such transactions

against third parties may not depend on the creditor’s consent.

5. Under a mortgage contract, the owner may assume an obligation with the creditor not to encumber the plot of

land owned by him/her with the right of superficies.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Law of Georgia No 5017 of 1 July 2011 – website, 14.7.2011

Article 295 – Transfer of mortgages and underlying claims

A mortgage and an underlying claim may be transferred to another person only simultaneously and jointly. The

mortgage shall be transferred to the new creditor upon transfer of the claim. The transfer of the mortgage shall be

valid only if a written mortgage contract or a Certificate of Mortgage (if any) is handed over to the new creditor

(under Article 289 4 of this Code). The transfer of the claim shall be registered with the Public Registry except

where a Certificate of Mortgage has been issued.

http://www.matsne.gov.ge 040.000.000.05.001.000.223

Law of Georgia No 3879 of 8 December 2006 – LHG I, No 48, 22.12.2006, Art. 321

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Article 296 – Debtor’s obligation with a new creditor

If, after the transfer of the claim to the new creditor, the debtor pays the former creditor, this payment shall not

exempt him/her from his/her obligation with the new creditor, even when he/she had no knowledge of the

transfer.

Article 297 – Presumption of accuracy of Public Registry entries upon transferring mortgages and claims to a new

creditor

The mortgage and the claim shall be transferred to the new creditor as they were in the old creditor’s hands. In

the creditor’s interests, Public Registry entries shall be presumed to be accurate. In such case, the debtor may not

argue that the claim does not exist. This rule shall not apply if the new creditor had knowledge of the wrong entry

in the Public Registry.

Article 298 – Rights of third persons

1. (Deleted).

2. If a personal debtor satisfies the creditor, the mortgage shall be transferred to him/her to the extent to which

he/she may claim compensation from the owner.

Law of Georgia No 1902 of 28 December 2002 – LHG I, No 4, 22.1.2003, Art. 20

Law of Georgia No 4744 of 11 May 2007 – LHG I, No 18, 22.5.2007, Art. 158

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Article 299 – Waiver of the claim or mortgage by creditor

1. If the owner is not a personal debtor and the creditor waives the claim or the mortgage, the owner shall become

a mortgagee. A waiver shall be valid if it is registered with the Public Registry.

2. If a creditor waives the mortgage, not the claim, the personal debtor shall still be discharged provided he/she

could have received compensation from the mortgage.

3. If the mortgagor has the right to rescind excluding a long-term use of the mortgage, he/she may demand that

the creditor waive the mortgage.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Article 300 – Transfer of a mortgaged immovable thing to the creditor (mortgagee)

1. If the owner of an immovable thing delays satisfaction of the claim secured by the mortgage, the mortgaged

thing may be transferred to the creditor (mortgagee) if the creditor (mortgagee) and the owner of the mortgaged

immovable thing jointly apply to the registration authority.

1 1 . If the mortgaged immovable thing is a plot of agricultural land, it may be transferred to the creditor

(mortgagee) taking into account the requirement established by the Organic Law of Georgia on Agricultural Land

Ownership.

2. If the mortgaged immovable thing is transferred to the creditor (mortgagee), the claim secured by the mortgage

shall be deemed to have been satisfied when the value of the mortgaged immovable thing does not fully cover the

amount of such claim, unless otherwise determined by law or by agreement of the parties.

2 1 . If a creditor/loan holder is not an entity subject to the supervision of the National Bank of Georgia, a claim

proceeding from a loan/credit agreement granted to a natural person (including to an individual entrepreneur)

shall be considered satisfied even in the case when a mortgaged immovable thing (things) or a mortgaged

immovable thing (things) and a pledged item (items) are transferred to the ownership of a creditor (mortgagee),

the price of the mortgaged immovable thing (things) or the mortgaged immovable thing (things) and the pledged

item (items) does not fully cover the amount of the claim secured by the mortgage or by the mortgage and the

pledge. No other agreement between the parties shall be allowed. The National Bank of Georgia may establish for

entities subject to its supervision a procedure different from the one provided for in this paragraph and/or an

additional procedure.

3. If the owner of an immovable thing delays satisfaction of a claim secured by a mortgage and the mortgaged

immovable thing is not transferred to the creditor (mortgagee) under paragraph 1 of this article, a notary shall

issue a writ of execution if there is an agreement between the parties and the notary explained in the notary act in

writing the legal consequences of issuing the writ of execution. The enforcement proceedings carried out under

http://www.matsne.gov.ge 040.000.000.05.001.000.223

the writ of execution issued by the notary shall be conducted according to the Law of Georgia on Enforcement

Proceedings.

Law of Georgia No 638 of 5 December 2000 – LHG I, No 48, 16.12.2000, Art. 138

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Law of Georgia No 2284 of 4 December 2009 – LHG I, No 45, 21.12.2009, Art. 329

Law of Georgia No 1864 of 25 December 2013 – website, 30.12.2013

Law of Georgia No 3315 of 21 July 2018 – website, 7.8.2018

Law of Georgia No 4851 of 25 June 2019 – website, 2.7.2019

Article 301 – Demand for sale of mortgaged immovable things

1. If the debtor does not satisfy the claim secured by the mortgage, the mortgagee may demand sale of the

immovable thing, unless otherwise provided for in the mortgage contract.

1 1 . A claim secured by a mortgage shall be deemed to have been satisfied even if the proceeds from the sale of the

mortgaged thing are not enough to fully cover the claim secured by the mortgage, unless otherwise determined by

law or by agreement of the parties.

1 2 . If a creditor/loan holder is not an entity subject to the supervision of the National Bank of Georgia, a claim

proceeding from a loan/credit agreement granted to a natural person (including to an individual entrepreneur)

shall be considered satisfied even in the case when the amount received as a result of selling a mortgaged

immovable thing (things) or a mortgaged immovable thing (things) and a pledged item (items) is not sufficient to

cover the claim secured by the mortgage or the mortgage and the pledge. No other agreement between the parties

shall be allowed. The National Bank of Georgia may establish for entities subject to its supervision a procedure

different from the one provided for in this paragraph and/or an additional procedure.

2. The sale shall be carried out according to the procedures set out in this chapter and the Law of Georgia on

Enforcement Proceedings.

3. The parties may agree to another procedure for holding an auction, subject to the requirements of Articles

302(6), 306 1 -306 3 , 306 5 (1) and 307(2) of this Code.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Law of Georgia No 826 of 19 December 2008 – LHG I, No 41, 30.12.2008, Art. 304

Law of Georgia No 2284 of 4 December 2009 – LHG I, No 45, 21.12.2009, Art. 329

Law of Georgia No 3315 of 21 July 2018 – website, 7.8.2018

Article 302 – Sale of mortgaged immovable things

1. A mortgaged immovable thing shall be sold at auction by a written agreement between the creditor and the

owner who designate a specialist, with the consent of the latter, for conducting the auction. The compensation of

the specialist shall be determined in the agreement.

1 1 . The sale by the specialist of a thing at an auction by agreement of the parties shall not constitute enforcement.

2. Any provision assigning obligations to third persons without their consent shall be void, but it shall not void

the agreement on the auction.

3. The creditor and the owner may establish a form of sale different from auction by an agreement.

3 1 . Under an agreement made in writing between the creditor and the owner the parties may stipulate that the

mortgaged immovable thing be transferred to the creditor and sold based on a writ of execution issued by a

notary. In such case, the transaction between the parties shall be notarised.

4. If the creditor and the owner fail to agree on holding an auction or on any other form of realisation of the

immovable thing, a court shall make a decision on the enforced sale of the immovable thing at an auction based

on a creditor’s application. The court decision on enforced sale of the immovable thing at an auction shall be

enforced according to the procedures laid down by the Law of Georgia on Enforcement Proceedings.

5. A specialist may be any legally capable person, including the creditor, the debtor or the owner.

6. The specialist shall notify the authorised persons entered on the Public Registry about the auction.

7. A seized thing may not be sold through a specialist.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Law of Georgia No 219 of 15 July 2008 – LHG I, No 17, 28.7.2008, Art. 135

Law of Georgia No 826 of 19 December 2008 – LHG I, No 41, 30.12.2008, Art. 304

Law of Georgia No 2284 of 4 December 2009 – LHG I, No 45, 21.12.2009, Art. 329

Law of Georgia No 3368 of 6 July 2010 – LHG I, No 39, 19.7.2010, Art. 241

Article 303 – Fruits of mortgaged immovable things

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From the moment at which an auction is announced or a court decision is made in connection with an immovable

thing, the mortgagor shall forfeit the right to retain the fruit of the thing.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Article 304 – Avoiding an auction

1. The owner or any person in agreement with the owner and/or a third person whose right may be prejudiced as

a result of an auction may avoid the auction by satisfying the claim before the auction is held.

2. The court shall establish whether the third person’s right is prejudiced or not.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Article 305 – Participation of a creditor, debtor and of an owner in an auction

A creditor, a debtor and an owner may participate in the auction provided that the debtor and the creditor present

security that is deemed proper by an expert.

Article 306 – Notice of auction

A creditor(s) shall file an application for an auction based on a contract with a specialist. The application shall

indicate the mortgaged immovable thing, the owner, the debtor, the claim and the contract.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Law of Georgia No 219 of 15 July 2008 – LHG I, No 17, 28.7.2008, Art. 135

Law of Georgia No 826 of 19 December 2008 – LHG I, No 41, 30.12.2008, Art. 304

Law of Georgia No 3368 of 6 July 2010 – LHG I, No 39, 19.7.2010, Art. 241

Article 306 1 – Cancelling or terminating an auction

1. An auction shall be cancelled if the creditor who has filed the application withdraws it.

2. An auction shall be terminated if before the auction is held, the debtor or the third person rightful to satisfy the

creditor, pays the amount needed to satisfy the creditor and to cover all other expenses.

Article 306 2 – Determining the time and place of an auction

1. A specialist shall determine the time and place of an auction by publishing, at least seven days before the

auction, an announcement indicating:

a) name and address of the owner of the immovable thing;

b) name and address of the specialist;

c) time and place of the auction;

d) starting price of the immovable thing;

e) location and brief description of the immovable thing;

f) the statement that all other persons holding rights to the immovable thing have to present evidence of such

rights before the commencement of the auction;

g) conditions of the auction.

1 1 . If an auction is conducted for selling a plot of agricultural land, an announcement shall also indicate that a

person participating in the auction shall meet the requirements established by the Organic Law of Georgia on

Agricultural Land Ownership.

2. The time and place of the auction shall be announced publicly in the media.

3. The specialist shall notify the parties of the time and place of the auction according to the procedures laid down

by the Civil Procedure Code of Georgia.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Law of Georgia No 219 of 15 July 2008 – LHG I, No 17, 28.7.2008, Art. 135

Law of Georgia No 826 of 19 December 2008 – LHG I, No 41, 30.12.2008, Art. 304

Law of Georgia No 4851 of 25 June 2019 – website, 2.7.2019

Article 306 3 – Rules for conducting an auction

1. A specialist shall conduct an auction. He/she shall declare the auction open and announce the starting price.

2. Before conducting the auction, the specialist shall determine which of the rights registered with the Public

Registry ranks ahead of the claim of the creditor for whom the enforcement is sought.

3. At the auction, the specialist shall announce:

a) that the rights registered with the Public Registry which rank ahead of the claim of the creditor for whom

enforcement is sought remain valid and are not satisfied by payment;

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b) the value of transitional rights (rights ranking ahead of the creditor’s claim or the rights that are transferred

together with the immovable thing after being sold at auction).

4. The specialist shall inform the involved parties of the conditions of the auction before the auction begins.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Law of Georgia No 219 of 15 July 2008 – LHG I, No 17, 28.7.2008, Art. 135

Law of Georgia No 826 of 19 December 2008 – LHG I, No 41, 30.12.2008, Art. 304

Article 306 4 – Conducting an auction

1. An auction shall be conducted within one month after an application is filed with a specialist.

2. The starting price of an immovable thing shall be determined as the total amount of the auction expenses and

the creditor’s claim. The auction shall continue until another bid is offered. The specialist shall announce the last

bid and the end of the auction.

3. The last bid shall be announced loudly three times.

4. All participants of the auction shall present a bank guarantee which ensures full payment if the bidder wins the

auction. The amount of the bank guarantee shall be one tenth of the starting price of the immovable thing. The

primary beneficiary of the bank guarantee shall be the creditor.

5. If an auction is conducted for selling a plot of agricultural land, a person willing to participate in the auction

shall present information proving that he/she meets the requirement established by the Organic Law of Georgia

on Agricultural Land Ownership.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Law of Georgia No 219 of 15 July 2008 – LHG I, No 17, 28.7.2008, Art. 135

Law of Georgia No 826 of 19 December 2008 – LHG I, No 41, 30.12.2008, Art. 304

Law of Georgia No 4851 of 25 June 2019 – website, 2.7.2019

Article 306 5 – Origination of ownership to property acquired at an auction

1. A buyer of property at an auction shall be served with the specialist’s order that indicates the acquired property,

the buyer of the property at the auction, the price and the conditions of the auction. The specialist’s signature on

orders relating to the auction shall be certified by a notary.

2. A buyer of property at an auction shall deposit the sum due to the specialist’s deposit account within one week.

The parties to the mortgage contract may agree on another rule for payment of the sum that shall be specified in

the conditions of the auction in advance.

3. Orders shall be announced at the auctions.

4. Orders shall take effect upon their announcement. After an order takes effect, the buyer of property at the

auction shall become the owner only after the price has been paid in full.

5. The transfer of ownership shall cancel all mortgages and real rights with which the immovable thing was

encumbered and which have been registered after the mortgage of the enforcing creditor. The rights registered

earlier to the thing shall remain unchanged.

6. The new owner of the immovable thing sold at the auction shall take the place of the old owner and become a

party to the legal relationship that existed in connection with the thing at the moment of the transfer of

ownership.

7. Upon the transfer of the mortgaged immovable thing to the new owner, the old owner shall forfeit all rights to

the thing.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Law of Georgia No 219 of 15 July 2008 – LHG I, No 17, 28.7.2008, Art. 135

Law of Georgia No 826 of 19 December 2008 – LHG I, No 41, 30.12.2008, Art. 304

Law of Georgia No 3887 of 7 December 2010 – LHG I, No 67, 9.12.2010, Art. 415

Article 306 6 – Cancelling the transfer of rights to property acquired at an auction

If within the period specified under the conditions of the auction a specialist does not receive in the deposit

account indicated by him/her the sum due from the buyer of property at the auction, or a specialist establishes

that the buyer of the plot of agricultural land does not meet the requirements established by the Organic Law of

Georgia on Agricultural Land Ownership, the specialist shall repeal the order of transfer of the right to the

property acquired at the auction and conduct a new auction, which shall not be deemed to be a repeat auction.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Law of Georgia No 219 of 15 July 2008 – LHG I, No 17, 28.7.2008, Art. 135

Law of Georgia No 826 of 19 December 2008 – LHG I, No 41, 30.12.2008, Art. 304

http://www.matsne.gov.ge 040.000.000.05.001.000.223

Law of Georgia No 4851 of 25 June 2019 – website, 2.7.2019

Article 307 – Second auction

1. If an appropriate bid is not offered at the first auction, the specialist shall call a second auction within 10 days.

2. The second auction shall be announced in the same way as the first auction. At the same time, it shall be

indicated that the auction is conducted for a second time.

3. The starting price of an immovable thing at the second auction shall be half of the starting price offered at the

first auction or a lesser amount if the creditor agrees in writing.

4. (Deleted).

5. If a mortgaged immovable thing is not sold at the second auction, by agreement of the creditor and the debtor

(owner of the immovable thing) the claim may be satisfied by transferring the immovable thing to the creditor. In

such case, the expenses shall be borne by the creditor.

6. If the agreement referred to in paragraph 5 of this article cannot be achieved, the specialist shall conduct a third

auction within the period defined in paragraph 5 of this article. The specialist shall determine the rule for selling

the immovable thing at the third auction. The third auction shall be organised in such a way that the immovable

thing is sold.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Law of Georgia No 219 of 15 July 2008 – LHG I, No 17, 28.7.2008, Art. 135

Law of Georgia No 826 of 19 December 2008 – LHG I, No 41, 30.12.2008, Art. 304

Article 308 – Payment of expenses

Claims shall be satisfied from the proceeds from the sale of a mortgaged immovable thing in the following order of

priority: the expenses, the creditor’s claim in full. If the proceeds cannot fully cover the expenses, the obligation to

pay the difference shall rest with the creditor.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Law of Georgia No 219 of 15 July 2008 – LHG I, No 17, 28.7.2008, Art. 135

Law of Georgia No 826 of 19 December 2008 – LHG I, No 41, 30.12.2008, Art. 304

Article 309 – Liability for conducting an auction improperly

If a specialist cannot discharge his/her duties with respect to conducting an auction, he/she shall be liable to the

participants for damages caused.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Law of Georgia No 219 of 15 July 2008 – LHG I, No 17, 28.7.2008, Art. 135

Law of Georgia No 826 of 19 December 2008 – LHG I, No 41, 30.12.2008, Art. 304

Article 310 – Compulsory administration of things (sequestration)

1. On the application of the mortgagee entitled to enforcement, a court, instead of a compulsory transfer at an

auction, may establish compulsory administration of the thing (sequestration). In that case the court shall convey

the administration function to the administrator who may also be the mortgagee.

2. Before making a decision on the matter, the court shall hear the persons registered in the Public Registry whose

rights may be prejudiced by the compulsory administration.

3. The administrator shall receive the fruits of the thing and at the end of a year, after deducting all expenses,

including administration expenses, shall distribute the fruits according to the distribution plan designed by

him/her and approved by the court.

4. Compulsory administration shall be extinguished when the creditor is satisfied or when it is evident that the

creditor cannot be satisfied by way of administration.

5. The procedure and conditions for administration carried out by the Legal Entity under Public Law (LEPL) –

National Bureau of Enforcement within the Ministry of Justice of Georgia shall be determined by the Law of

Georgia on Enforcement Proceedings.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Law of Georgia No 1864 of 25 December 2013 – website, 30.12.2013

Section Four

Public Registry

Article 311 – Purpose of the Public Registry

1. The Public Registry is a collection of the records of the origin, modification and termination of rights to,

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attachment and lien/mortgage in things and intangible property. It is also a collection of the records of the origin

and modification of the abandonment of the ownership of immovable things.

2. The rules and conditions for maintaining and accessing the Public Registry are defined by law.

Law of Georgia No 4744 of 11 May 2007 – LHG I, No 18, 22.5.2007, Art. 158

Article 311 1 – Procedure for submitting transactions to the Public Registry

1. A transaction made in writing shall be submitted to the Public Registry to register the relevant right to the

thing and intangible property. The transaction or the signatures of the parties to the transaction shall be

authenticated according to the procedures laid down by law.

2. If the parties to a transaction sign the transaction in the registration authority in the presence of an authorised

person, then the transaction or the signatures of the parties to the transaction need not be authenticated in order

for the transaction to be valid.

3. Where so provided by law, transactions involving things and intangible property shall take effect upon

registration of the rights determined by such transactions with the Public Registry.

Law of Georgia No 3879 of 8 December 2006 – LHG I, No 48, 22.12.2006, Art. 321

Law of Georgia No 4744 of 11 May 2007 – LHG I, No 18, 22.5.2007, Art. 158

Article 312 – Presumption of the veracity and completeness of the Register entries

1. A presumption of veracity and completeness shall operate with respect to the contents of the Public Registry;

that is the Register records shall be presumed accurate until proved incorrect.

2. An entry in the Register shall be deemed to be accurate in favour of the person who acquires some right from

another person on the basis of a transaction and this right was registered in the Register in the name of the

transferor, unless a complaint has been filed against the entry or the acquirer has knowledge of the incorrectness

of the entry.

3. If the owner transfers or encumbers immovable property, the co-owner’s consent shall not be required when

entering into a transaction (registering a right) if the co-owner is not registered as such with the Public Registry.

4. Where so provided for in paragraph 3 of this article, in the buyer’s interests, the transferor shall be presumed to

be the sole owner if he/she is registered as such with the Public Registry, except if an acquirer knew that there

was another owner besides the transferor.

Law of Georgia No 5127 of 29 June 2007 – LHG I, No 27, 17.7.2007, Art. 260

Article 313 – (Deleted)

Law of Georgia No 4744 of 11 May 2007 – LHG I, No 18, 22.5.2007, Art. 158

Article 314 – (Deleted)

Law of Georgia No 4744 of 11 May 2007 – LHG I, No 18, 22.5.2007, Art. 158

Article 315 – (Deleted)

Law of Georgia No 4744 of 11 May 2007 – LHG I, No 18, 22.5.2007, Art. 158