Quick facts
| Parameter | Details |
|---|---|
| Legally required | No, there is no statutory requirement |
| Who has the incentive to check | The buyer, since the risk of an unchecked hidden defect falls on them |
| What gets checked for property | Ownership, encumbrances, litigation, permitting documentation |
| What gets checked for a company | Rights to assets, IP, licenses, litigation and insolvency history |
| Where property rights are verified | The Public Registry (napr.gov.ge) |
| Typical timeframe | Depends on the complexity of the object, agreed individually |
Why due diligence isn't required, yet is essential
Georgian law contains no requirement to conduct a check before buying property or a company. This sets Georgia apart from jurisdictions where certain checks are built into the transaction procedure itself. Instead, the "caveat vendor" principle applies: responsibility for hidden defects in the object rests with the seller.
That sounds like buyer protection, but it works differently in practice: proving after the deal that the seller knew about a defect and concealed it is considerably harder than uncovering the problem before signing. So due diligence in Georgia is not a box-ticking exercise for legal compliance, it is a tool the buyer applies on their own initiative, because the law does not do this work for them.
Property due diligence
When buying, investing in, leasing long-term, or inheriting a property in Georgia, a check typically covers several areas:
- Ownership. Who is the currently registered owner according to the Public Registry, and does that person match the seller named in the contract.
- Encumbrances. Whether the property carries a pledge, seizure, mortgage, or other restriction registered against it.
- Litigation. Whether the property is the subject of current or potential legal proceedings.
- Permitting documentation. Whether the property's actual condition matches its construction and occupancy permits, and whether any unapproved alterations exist.
Georgia's Public Registry is largely digitized and open, which makes a basic ownership check a relatively fast procedure compared to many other jurisdictions. This does not remove the need for the check, but it lowers its cost and turnaround time.
Company due diligence
If the deal involves buying a stake in an existing company, or the whole company, rather than a single asset, the scope of the check is wider:
- the company's rights to its assets, including real estate and equipment
- intellectual property rights, where relevant to the business
- the status of any licenses required for the company's activity
- current, potential, and closed litigation involving the company
- signs of bankruptcy or insolvency proceedings
A thorough company check minimizes financial losses and helps avoid dealing with nominee structures, where the beneficiary behind the company is not the one formally declared. If you are considering buying an existing company as an alternative to registering a new one, it is worth also reviewing how registering a company from scratch works, to compare the scope of checks in both scenarios.
When due diligence matters most
Some situations call for a check first and foremost: buying resale property with an unclear ownership history, acquiring a stake in an operating business, investing through intermediaries without direct contact with the seller, and deals priced noticeably below market with no obvious explanation. In any of these cases, the cost of a check is usually far lower than the potential loss from a problem that goes undetected.
Is due diligence legally required in Georgia?
No, there is no statutory requirement to conduct a check before a deal. Responsibility for hidden defects rests with the seller under the "caveat vendor" principle, but proving this after the deal is harder in practice than checking beforehand.
How long does a property check take?
It depends on the complexity of the object and its ownership history. A basic ownership check via the Public Registry is usually quick thanks to the registry's digitization, but a full check including permitting documentation can take longer.
How does company due diligence differ from a property check?
A property check focuses on ownership, encumbrances, and permitting documentation for a specific object. Company due diligence is broader: it covers the company's assets, intellectual property, licenses, and litigation history.
Do I need due diligence when buying directly from a developer?
Risks on the primary market differ from the resale market but do not disappear entirely: it is worth checking that permitting documentation matches the actual property and confirming the status of the underlying land plot.
Where is property ownership verified in Georgia?
At the Public Registry, maintained by the National Agency of Public Registry (napr.gov.ge).