Buying property in Greece is often a difficult transaction and always requires the support of a lawyer experienced in real estate matters. The establishment of the land registry in Greece instead of simplifying the procedures of buying and selling real estate has unfortunately so far made them much more difficult. The reason for this is often the mistakes made by many owners who made the declaration in the land registry on their own or with the assistance of an accountant who did not have the relevant knowledge.
Thus, many times, buying property in Greece is a rather complicated process that hides traps. Very often in practice, there are deficiencies or irregularities in the declarations made to the mortgage office and the land registry, which makes it necessary to seek the support of a lawyer experienced in such matters.
The process of buying a property involves many stages and legal support from our lawyers is provided at every step. In detail:
Negotiations for the purchase or sale of real estate- Preliminary sale agreement.
The presence of a lawyer in the negotiations for the purchase or sale of your property ensures that you will not be unfairly imposed or taken advantage of.
When the procedures are completed, it is common in the Greek real estate market to sign a preliminary sales contract between the seller and the buyer, outlining the terms of the final sale and giving a down payment. It should be noted that this preliminary contract has little legal force which is often not known to the parties. The lawyers of our office, with their knowledge and experience in real estate matters, will ensure that these terms of the preliminary contract are appropriate for your case and that the advance payment you make is reasonable and that you do not risk losing it.
Check the title and legal status of the property.
This process for buying a property involves checking the seller’s title deeds and whether the property is vacant or has mortgages or other encumbrances. Considering that in Greece the land registry has not been completed, the process of title control is extremely serious and absolutely necessary for any buyer and must be carried out by a qualified and experienced real estate lawyer both at the land registry office and at the mortgage office, so that the buyer is sure of what he/she is buying.
Another point that the lawyers of our office will investigate and inform you about, when carrying out a title check for the purchase of a property, is what the regulations of the apartment building provide for the use of the property and the common parts. Many times it happens that a buyer purchases a property to use it for a specific use, business or commercial, and then discovers that according to the condominium’s rules and regulations, that particular use is prohibited. The attorneys in our office will also check the condominium or building’s regulations and let you know if the use you intend to put on the property is allowed.
If the property is located near the sea or a forest, it must be checked whether there are any restrictions by the law for the protection of forests and coasts in Greece. This check is absolutely necessary when you are going to buy land or a building located in such an area.
Check for the planning legality of the property.
The property you are going to buy in Greece is necessary to be checked from an urban planning point of view, that is, whether it has been built according to a legal permit from the urban planning department or if there are parts of it that are not legal and have been built later, which is very common in the Greek real estate market. The lawyers of our office in cooperation with your engineer will take care of the planning control of the property, so you will know if the property meets the requirements of legality from a planning point of view and if you can proceed with its purchase. In case there are illegal sections in the property according to recent laws of the Greek state, they can be ”legalized” by paying some fines and submitting the relevant documents to the town planning department.
Tax procedure.
The specialized lawyers of our office will take care of the submission of the tax return for the purchase of the property to the tax office and the payment of the taxes so that you can proceed with the purchase of the property in Greece.
Drafting and signing of the contract.
Our lawyers will take care, in cooperation with our notaries or a notary of your choice, to draft the contract for the purchase of your property in Greece, so that you are fully secured for the transfer of the property without any problems. During the signing of the contract, a lawyer from our office will be present so that you will have legal support during the signing of the contract and will take care of all the procedural matters, such as the issuing of cheques and all the necessary actions to successfully complete the purchase. If you were the seller of the property the lawyer’s representation is also useful to be sure that the terms of the sale will be advantageous and that you are secured to receive the price without any problem.
Register the purchase contract with the land registry and the mortgage office.
The lawyers of our office will also take care of the registration of the purchase contract of the property with all the necessary certificates at the land registry and the cadastre, and will provide you with a complete file with copies of your contract and copies of the certificates proving that your property is free and now belongs to you.
Cancellation of sale – Liability from negotiations
Before signing the final property purchase and sale contract, it is customary for the buyer to give the seller a deposit by signing a private agreement. Sometimes, however, the final contract is not signed in the end for various reasons and then the question of the fate of the deposit arises.
The lawyers of our office and especially our managing attorney Stefanos Economou with his specialization in real estate have dealt with many such cases where the seller wishes to retain the deposit and the buyer demands that it be returned to him.
Such real estate disputes are resolved in accordance with Article 197 of the Civil Code, which stipulates that during negotiations for the conclusion of a contract, the parties must mutually behave in good faith and in accordance with commercial customs. According to Article 198 par. 1, whoever, in the course of negotiations for the conclusion of a contract, has culpably caused damage to the other party, is obliged to remedy the damage even if the contract has not yet been concluded.
This is therefore a question of pre-contractual liability, which may arise from the cancellation of the negotiated contract.
The contract for the sale and purchase of a property is therefore usually preceded by the negotiation stage. The judgment of the Court of First Instance in Case 11/2006 held that ‘…the negotiation stage begins when the persons interested in concluding a valid contract between them are brought together to explore the possibilities of concluding and determining the terms of the contract, and ends either with the definitive termination of the negotiations or with the conclusion of the contract’.
The term ‘commercial behaviour’ means the usual commercial practices and the term ‘good faith’ means honesty in transactions. Although a contractual link between the parties concerned is not created at this pre-contractual stage of negotiations, good faith requires, for example, that there be: a serious intention to conclude the contract, prior notification of the intention to terminate the contract to the other party in order to avoid necessary costs (e.g. fees of experts (lawyers, accountants, etc., travel costs, translation costs, etc.).
Therefore, as our company’s lawyers can inform you, the party who, through conduct contrary to good faith and business ethics, has aborted the conclusion of the contract, is obliged to compensate the other party for the loss resulting from the fact that he believed that the contract would be concluded.
Therefore, the conditions for liability arising from the cancellation of the conclusion of a contract for the sale of real estate are: 1. the existence of a stage of negotiations; 2. the counterparty’s anticontractual conduct (i.e. contrary to good faith and good morals); 3. negligence; 4. the occurrence of damage; and 5. the existence of a causal link between the legal ground for liability, i.e. negligence and damage.
In the case of a cancellation of a contract for the sale and purchase of real estate, the property damage caused to the contracting party may be positive when the existing property is reduced: e.g. the costs to the lawyer for the legal investigation of the property or, in a lease contract, the repairs or alterations made by the lessor before the property was delivered. However, the loss may also be a consequential loss, i.e. where the counter-dealing behaviour prevents an increase in his property, called ‘loss of profit’. A typical example is the following: For example, if the seller and the buyer negotiate the sale of a property for a price of EUR 35,000, the buyer spends EUR 500 on a lawyer for the legal control of the property, EUR 200 on transport costs and EUR 50 on communication costs, for a total of EUR 750. While the negotiations had been completed and only the formal part of the contract signature remained, the seller unjustifiably refused to sign the final contract. Here the loss suffered by the buyer is EUR 750 (positive loss), which he is entitled to claim under Article 198 CC.
If you are concerned about such a case, the lawyers ofour law firm and in particular, the Managing Partner of this firm, Stefanos Economou, can guide you and defend you effectively, whether you are on the side of the buyer or the seller.