Rehabilitation, not liquidation
Besides bankruptcy, the law provides for rehabilitation, in which the business continues under a plan approved by creditors. For buyers that can mean construction resumes. Nothing guarantees it.
Developer bankruptcy in Georgia. What the registry shows comes first.
In short
If a developer in Georgia becomes insolvent, your position depends on what the Public Registry shows. Registered ownership does not form part of the insolvency estate. A buyer with only a contract is usually an unsecured creditor and lodges a claim in proceedings under the 2020 law. A bank holding a mortgage over the land is paid first out of that collateral.
Your position in the proceedingsWe have found no rule in Georgian law requiring developers to hold buyers' payments for new builds in an escrow account.
What you can do nowYour position
What the statute says, and what is unsettled.
The basis is the Law on Rehabilitation and Collective Satisfaction of Creditors' Claims of 18 September 2020. Where the position of off-plan buyers is not settled, we say so.
Registered ownership
If the flat is already registered in your name, it is your property, not the developer's. Under Article 60 of the law, a person with a real right in an asset can ask for it to be separated from the estate.
Pre-registered right: unsettled
Article 60 also allows assets to be released from the estate where a bilateral contract has been essentially performed and provides for transfer of ownership. Whether that covers a pre-registered, largely paid-for flat in an unfinished building is not settled in published case law. Have it checked for your case.
A contract only
Without registration you hold a contractual claim for repayment or damages, which usually makes you an unsecured creditor. The debtor's report groups creditors as secured, preferential, unsecured and related to the debtor.
The bank's mortgage
If a bank financed the project with a mortgage over the land, its claim is met from that collateral. Article 58(6) refers to Article 105 for this. The registry extract for the plot shows which charges are recorded ahead of your right.
Escrow: the Dubai comparison
In Dubai, Law No. 8 of 2007 requires developers to pay off-plan purchase money into an escrow account for each project, which the developer's creditors cannot attach. We have found no equivalent requirement in Georgian law. Unless your contract provides for escrow, your money becomes part of the developer's assets.
Municipal programmes
According to a Georgia Today report of 27 November 2025, Tbilisi City Hall shows data from the municipal inspection on a public map: buildings approved for use, and construction sites where work has been suspended. The report also mentions a city programme for unfinished buildings. Neither gives buyers a right to completion. Only an announcement from the city shows whether a building is included.
What to do
Four steps once proceedings are under way.
Deadlines in insolvency proceedings are short. Act as soon as you learn that an application has been filed against the developer.
- 1
Check the registry
Order a current extract for your flat and for the plot. It shows whether your ownership or right is recorded and which mortgages exist.
- 2
Lodge your claim
Creditors lodge claims within 30 days of being notified that the application has been admitted. A creditor who was not notified has 30 days from learning of the proceedings, and no more than one year from their opening.
- 3
Talk to other buyers
Buyers in the same building are often in the same position. Together you can share legal costs, pool documents and negotiate with another developer about finishing the project.
- 4
Instruct a lawyer
A lawyer experienced in insolvency lodges the claim, deals with the insolvency manager for you and checks whether your flat can be separated from the estate.
How much comes back
How much unsecured creditors recover depends on the estate, the collateral and the proceedings. We know of no official recovery figures for off-plan buyers.
Frequently asked questions
Questions about developer insolvency.
Ownership, refunds, the bank's mortgage and frozen sites.
What happens to my flat if the developer in Georgia goes bankrupt?
If the flat is registered in your name, it is yours and not part of the estate. If you only have a contract, you are usually an unsecured creditor and lodge your claim in the proceedings.
Will I get my money back if the developer goes bust?
Nobody can say in advance. Secured creditors are paid from their collateral. The law also defines preferential claims, such as three months' wages. Your lawyer can explain the exact order of ranking in your case. How much is left for unsecured creditors depends on the developer's assets.
Does the developer's bank rank ahead of buyers?
If the bank holds a mortgage over the land, it is paid from that collateral. The registry extract shows whether your right is recorded before or after it.
Is there an escrow account for off-plan buyers in Georgia?
We have found no legal requirement. Some developers offer payment through a bank or an escrow account voluntarily. If so, your contract says so.
Does Tbilisi help with frozen construction projects?
According to a Georgia Today report, City Hall shows sites where work has been suspended on a public map and runs a programme for unfinished buildings. Buyers do not gain a legal right to completion from either.
Last reviewed on 3 November 2026. Sources: Law of Georgia on Rehabilitation and Collective Satisfaction of Creditors' Claims of 18 September 2020, Art. 3 (definition of preferential claims) and Arts. 5, 25, 58, 60 and 105 (matsne.gov.ge), Law of Georgia on Public Registry (matsne.gov.ge); National Agency of Public Registry (napr.gov.ge), Dubai Law No. 8 of 2007 concerning escrow accounts for real estate development, Arts. 3, 6, 7 and 9 (dlp.dubai.gov.ae), Georgia Today, 27 November 2025: report on Tbilisi City Hall's map of buildings approved for use and suspended sites (secondary source; we could not see an official city announcement). This guide is not legal or tax advice.
Read next
More on protecting an off-plan purchase.
The delay scenario, the registry extract and checks before you buy.
Start with the registry extract.
What it records determines your position. Everything else builds on it.