The Essence and Legal Significance of a Mortgage Agreement
A mortgage agreement secures the performance of a creditor's claim with immovable property: if the debtor fails to perform the obligation, the creditor is entitled to demand the realization of that property and to receive the proceeds towards satisfaction of the claim. The Civil Code of Georgia regulates this field through the norms on registration of a mortgage (Article 289), multiple encumbrance of one immovable item with mortgages (Article 290), transfer of the mortgage and the claim it secures (Article 295), submission of the transaction to the public registry (Article 311¹), and the demand for realization of the mortgaged immovable (Article 301).
In practice a mortgage agreement is most often concluded when a loan or credit is extended: a bank or other lender provides money on condition that the borrower's immovable property is encumbered with a mortgage. It is at that moment that the parties decide what the agreement will contain, how and when it enters into force, and what follows from a breach of the obligation — and all three questions are settled precisely by the Code.