Below is which encumbrances can be cleared during a sale, which ones block it, and the payment order that keeps your money safe.
Which encumbrances can be cleared and which block the deal
An encumbrance is not always a reason to walk away. The deciding question is who removes it, how, and whether that can happen before title passes.
| Encumbrance | Can you buy | How it is removed |
|---|---|---|
| Seller's bank mortgage | yes | repayment of the debt, then cancellation of the mortgage |
| Pledge in favour of a private person | yes, with caution | settlement with the pledgee and cancellation of the pledge |
| Lease, flat already handed to the tenant | yes | the buyer takes the landlord's place |
| Tax lien | after the arrears are paid | the seller pays the debt and the lien is lifted |
| Court-ordered seizure | no, while it stands | only lifted by the court or enforcement officer |
A mortgage and a pledge are cleared with money, and that can be built into the deal. A seizure is different: it is lifted by a procedural decision, not by a payment, and the property cannot be bought until that happens.
How to see all of these records before the deal, and which encumbrances never appear in the registry, is covered in our guide to property due diligence before you buy.
A lease passes to the buyer with the flat
This often comes as a surprise. Under the Civil Code, if the flat has already been handed to a tenant, the buyer takes the landlord's place when it is sold, and the rights and obligations under the lease pass to the buyer. The tenant stays on under their contract. If you are buying the flat to live in, agree the terms of the tenant's departure before the deal, not after.
How a mortgage is released on sale
Cancelling a mortgage in Georgia is done through a separate document that is registered with the Public Registry. The National Agency of Public Registry publishes two official templates for this:
- an agreement on cancellation of the mortgage right, signed by both parties
- cancellation of the mortgage right as a unilateral transaction
The second option matters in practice: once the debt is repaid, the bank can release the mortgage by a unilateral act, without a separate agreement with the seller. That makes closing simpler and faster.
The buyer's title arises only on registration
Until the registry entry is made, the sale contract does not make you the owner. This is what drives the payment order: money handed to the seller before registration is not protected by ownership of the flat.
Source note
> The National Agency of Public Registry's templates for real estate registration include a separate document for cancelling a mortgage right, including in the form of a unilateral transaction.
Source: Sample documents for immovable property registration, NAPR
In what order to pay so you do not lose money
A safe structure rests on one principle: the seller is paid no earlier than the moment the property is free and the transfer of title is registered. In practice it looks like this:
- Get the exact payoff amount from the seller's bank for the deal date.
- Get written confirmation from the bank that it will release the mortgage once repaid.
- Pay the part of the price equal to the debt directly to the bank, not to the seller.
- Register the mortgage release and the transfer of ownership.
- Take a fresh extract and confirm that you are the owner and the mortgage entry is gone.
- Only then pay the balance of the price to the seller.
The key step is the third one: the debt is repaid with the buyer's money, but directly to the creditor. If you hand the full amount to the seller and rely on them to close the loan, the whole risk sits with you.
If you are buying from abroad, a representative under a power of attorney runs this sequence. How a remote deal works is covered in the guide to buying or selling property in Georgia remotely. If the purchase is also meant to support a residence permit, check the requirements for a residence permit through property before you sign.
Frequently asked questions
Can I buy a flat that is under a mortgage?
Yes, if the mortgage is released as part of the deal. The seller's debt is usually repaid from the purchase price directly to the bank, the bank then releases the mortgage, and the release is registered together with the transfer of title. The main condition: the seller is not paid until the property is free and title is registered to the buyer.
Can I buy a flat under seizure?
Not while the seizure stands. A seizure is lifted not by money but by a decision of the court or enforcement body that imposed it. Until there is such a decision and the release is registered, the deal cannot go through. A seller's offer to "sort it out after the deal" does not work here.
Who do I pay when the seller's mortgage is repaid?
The seller's bank, directly. The amount of the debt goes to the creditor, not to the seller, and only the balance of the price goes to the seller after the transfer of title is registered. That way the buyer does not depend on whether the seller closes the loan.
What happens to a tenant if the flat is let?
If the flat has already been handed to a tenant, the buyer takes the landlord's place on sale: the rights and obligations under the lease pass to the buyer, and the tenant keeps using the flat. If you need the flat vacant, the terms of the tenant's departure are agreed before the contract is signed.
When does the buyer become the owner?
From the moment of registration with the National Agency of Public Registry. A signed contract without registration does not create ownership. That is why the final payment to the seller is tied to registration, not to signing.
How Legalese handles this
We check the property before any payment is made and establish which encumbrances can be cleared during the deal and which ones block it.
If the property is mortgaged, we agree the payoff amount and the release procedure with the seller's bank, set up the payment sequence so the seller receives the balance only after registration, and handle the filing with the Public Registry.
The extended support package covers registration of the contract and organising settlement with the seller. Details: legal support in real estate transactions.
Key points
- A mortgage and a pledge can be cleared during the deal, a seizure cannot until the court or enforcement officer lifts it
- A mortgage release is registered as a separate document, and the bank can release it unilaterally
- Ownership arises only on registration with the Public Registry
- The seller's debt is paid directly to the bank, and the seller gets the balance only after registration
- If the flat is already handed to a tenant, the buyer becomes the landlord under their lease
To find out whether your property can be bought safely, book a free consultation.