Utility Debts: How to Check and Write into the Contract—Step by Step

Utility debts: check before buying and protect yourself 🏡

Before buying property in Georgia, confirm whether there are outstanding utility bills (water, electricity, heating, waste). If not handled correctly, such debts can become a headache for the new owner. This guide explains step by step how to verify liabilities and what contract terms to include to reduce risk.

Why checking utilities matters

• Utility arrears can be associated with the property and sometimes affect the new owner.
• Outstanding charges may complicate registration or result in unexpected costs after purchase.
• Clear contractual language provides legal grounds for reimbursement or other remedies.

Documents to request from the seller 🔎

1. Account numbers and recent utility bills for all relevant services.
2. Copies of payment receipts or bank confirmations where available.
3. A certificate or written statement on the account balance from the utility provider or managing company, if available.
4. Meter readings and an act documenting the readings on the date of handover.
5. Proof of title and an extract from the public property registry showing encumbrances.

Request these documents in writing or electronically — verbal assurances are not enough.

How to verify information ✔️

• Contact utility providers directly using the account numbers to confirm balances and payment history.
• Check municipal or provider-issued certificates of no debt if such services exist.
• Compare meter readings with the handover act.
• Order a registry extract to detect any legal encumbrances or liens on the property.

If the seller refuses to provide documentation or if information is incomplete, treat the transaction with caution.

Clauses to include in the purchase agreement ✍️

Draft clear, specific clauses that allocate responsibility and provide remedies:

• Seller's representation: the seller confirms there are no outstanding utility debts as of the signing date and attaches supporting certificates.
• Seller's obligation: if a utility debt is discovered within an agreed period after transfer, the seller must pay or reimburse the buyer in full. Specify the time frame and procedure for claims.
• Escrow or retention: consider withholding a portion of the purchase price in escrow until checks are completed and debts are cleared.
• Remedies and penalties: spell out penalties for false statements and the procedure for dispute resolution.
• Handover protocol: capture meter readings and condition of the property in the handover act.

Specificity matters: include deadlines, exact documents required, and methods of reimbursement.

Practical wording examples (templates)

• “Seller provides a certificate from the utility provider confirming the account balance as of the signing date.”
• “If a utility debt is proven within an agreed period after transfer, seller shall fully reimburse buyer within the agreed timeframe.”

Replace “agreed period” with a precise number of days in the contract to avoid ambiguity.

If debts are discovered after signing — immediate steps 🚨

1. Request payment evidence from the seller immediately.
2. Notify the seller in writing and set a deadline to settle the debt.
3. If the seller fails to act, consult a lawyer and use contract remedies (claims, compensation, lien enforcement as applicable).
4. Consider offsetting unpaid amounts against retained funds or pursuing recovery through legal channels.

Practical checklist for buyers ✅

• Never rely only on verbal assurances.
• Record meter readings in the handover act.
• Include retention or escrow clauses where appropriate.
• Specify deadlines and remedies in the contract.
• Involve a lawyer when in doubt.

Final thought

Careful checking of utility debts and precise contractual protections protect not only your money but your peace of mind. Approach each step methodically: gather documents, verify with providers, and formalize protections in the purchase agreement.

If you'd like assistance reviewing documents, preparing secure contract clauses, or accompanying the transaction, our BuyHome team can help. Contact us or browse listings on our site https://buyhome.ge/en/search for available properties.