From 2021, the so-called Escrow accounts will take effect to insures borrowers for the risks of non-completion of the construction process.
Georgian Prime Minister Giorgi Gakharia's Economic Advisor Beka Liluashvili said that the Escrow accounts would be mandatory for specific conditions.
He says this is a bank account allowing borrowers to insured in case a construction process terminates.
"Currently, when a person buys immovable property with a loan, he/she transfers the entire amount to the developer, and for various risks, this construction may fail to be completed. Under the Escrow system, amounts paid by borrowers will be accumulated on these accounts," Liluashvili says.
In his words, a developer will be able to use the account only during the construction or after its completion.
"This systemic step is followed in many developed European countries," Liluashvili stated, adding the system will be mandatory for all developers.
Bela Gelashvili
News Author