Debts and Encumbrances: Which Certificates to Request Before Buying—Step by Step

Introduction ✅

Buying property is exciting but can hide legal and financial pitfalls. One of the biggest risks is undisclosed debts or encumbrances on the property. This guide gives a clear, step-by-step list of documents to request and checks to perform before you finalize a purchase in Georgia.

Quick overview 👇

• Request an up-to-date cadastral/ownership extract.
• Check for mortgages, liens, arrests, and court cases.
• Verify utility and tax arrears.
• Follow the sequence: request → verify → agree terms → complete the deal.

Step 1. Request the ownership extract from the Registry 📄

Ask the seller for the latest extract from the National Public Registry showing ownership details. It should include:

• Owner name(s).
• Type of right (ownership, shared, lease, etc.).
• Any recorded encumbrances, mortgages or arrests.

Practical tip: insist on a recently issued extract so you see the current situation.

Step 2. Check for mortgages and liens 🏦

The registry extract will show whether a mortgage or pledge is registered. If you see a mortgage entry, ask:

• Who the creditor is.
• Whether the mortgage can be released before the sale.
• If the creditor agrees to remove the encumbrance on payment.

If a mortgage exists, options include paying off the debt before closing, using an escrow mechanism, or postponing the sale until the lien is released.

Step 3. Look for court decisions and enforcement orders ⚖️

Search for court judgments or enforcement proceedings against the owner related to this property. Such orders can prevent a transfer of ownership until resolved.

Example: a family law or debt claim might result in a court order restricting disposal of assets.

Step 4. Verify utility and tax arrears 💡

Request clearance letters or receipts for utilities and property taxes. Small outstanding balances can sometimes lead to enforcement actions, so confirming the absence of arrears reduces surprises.

Tip: ask for recent payment receipts and, if possible, a statement from utility providers.

Step 5. Check tenants and third-party rights 🧾

If the property was rented out, confirm whether existing leases remain valid after sale. Long-term registered leases or occupancy rights may bind the new owner.

Oral agreements are harder to track, but registered contracts should appear in records or be presented by the seller.

Step 6. Verify seller identity and proxies 🕵️‍♂️

Match the owner’s name in the registry extract with ID documents. If someone acts on behalf of the owner via a power of attorney, request the notarized power of attorney and confirm it is valid and unchallenged.

Recommendation: complete transactions in the presence of a notary when possible.

Step 7. Check building history and planning restrictions 🏗️

Investigate whether the building is subject to planned demolition, reconstruction, or zoning limitations that could affect use or value. Local municipality documents or developer plans can reveal such risks.

What to do if you find an encumbrance 🔍

1. Identify whether the encumbrance is temporary or permanent.
2. Ask the seller to clear the issue before transfer.
3. Use an escrow arrangement with a notary or bank for secure payment.
4. Consult a real estate lawyer for complex cases.

Compact pre-closing checklist ✔️

• Recent registry extract.
• Statements on utility and tax payments.
• Mortgage/pledge check.
• Court and enforcement checks.
• Verification of IDs and powers of attorney.
• Notary involvement recommended.

Conclusion and help from BuyHome 🧡

A systematic document check significantly reduces the risk of buying a problematic property. If you are buying in Georgia, BuyHome can collect the necessary extracts, verify encumbrances and support the transaction to make it safe.

Ready to review a property together? Contact BuyHome for document checks and guided support: https://buyhome.ge/en/search or see available apartments: https://buyhome.ge/en/apartments

We’re happy to help you find a secure property in Georgia.