---
title: "Collateral Management"
url: "https://legal.ge/en/service/banking-and-finance-law-en/collateral-management-en"
field: "Banking & Finance Law"
description: "Collateral management: maintenance, benefits, pledge ranking and termination under the Georgian Civil Code — Legal.ge."
reviewed: "2026-07-09"
updated: "2026-10-15"
publisher: "legal.ge"
---

# Collateral Management

> Source: legal.ge, https://legal.ge/en/service/banking-and-finance-law-en/collateral-management-en

## Maintenance of the Pledged Item and Benefits

Effective management of security begins with a precise allocation of the parties' rights and duties. Under the relevant norm of the Civil Code, in a registered pledge the pledgor or the pledgee, and in a possessory pledge the pledgee or a third person designated by him, bears the duty to maintain the pledged item properly. Each party has the right to inspect the condition of the item held by the other — including its size, weight and storage conditions. Where the item is in the pledgor's possession, he may take benefits from it; the pledgee may do so only if this is provided by agreement, although he is presumed entitled to receive fruits where this follows from the nature of the item. Benefits received by the pledgee are credited to the secured claim, and at the pledgor's request the pledgee must render an account of them. The pledgee may demand reimbursement of necessary expenses incurred on the item, while other expenses are reimbursed according to the rules on management of affairs without mandate.

The full text is available on legal.ge after signing in: https://legal.ge/en/service/banking-and-finance-law-en/collateral-management-en

### Who maintains the pledged item?

In a possessory pledge — the pledgee or a designated third person; in a registered pledge — the pledgor or pledgee; each party has an inspection right.

### How are benefits accounted for?

Benefits received by the pledgee are credited to the secured claim, and an account must be presented at the pledgor's request.

### What happens on breach of an alienation ban?

The pledgee acquires the right to immediate satisfaction where the agreement prohibited alienation until termination.

### How does a pledge terminate?

By waiver: a registered pledge through registration, a possessory pledge by return of possession or waiver.

### How is priority determined?

By the time of submission for registration; a future-property pledge of the previous owner outranks the new owner's.