To be valid, a transaction regarding real estate must meet several conditions as required by law. Many of these conditions are well-known to most people, some of which we have mentioned in another text. Today, we will discuss one important condition, the transfer of the corresponding contract to the competent land registry. You may consider this as not very significant, but you might be surprised by how many things can change and how many legal and other troubles can arise from not transferring the property contract correctly or at all.

1.What do we mean by the term “transfer”?

The term “transfer” refers to the process by which the establishment/modification/abolition of a real right is recorded in the public registers = land registry and now Cadastres, when it comes to a contract concerning real estate. To understand its significance as a legal requirement, it is enough to consider that even if all contracts are flawless/taxes have been paid and there is generally no defect, if the contract has not been submitted for transfer, no real estate is transferred, and generally, no real rights over it are altered at all.

It is important to note that the law does not set a deadline for the transfer – practically, it can be done anytime after the contract. However, it is useful for the transfer to take place in a reasonable time because it is not excluded that a third party may register some real right on the property beforehand, which, as we will see below, is entirely valid and gives them priority in terms of acquisition of ownership/lease/mortgage before us.

2.For which actions is transfer required?

In order to avoid gaps and doubts, the law mentions certain contracts that must be submitted for transfer to gain legal validity. Therefore, it is mandatory to transfer:

• All contracts concerning real estate = transfers/mortgage assignments/leases/servitudes/mortgage annotations, etc.
• Judicial decisions concerning compulsory expropriations as well as those concerning land exchanges.
• If it concerns united properties, and they are divided, the court decision ordering their division = their distribution must be transferred.
• The acceptance of inheritance when the inheritance includes real estate, the ownership of which the heir wants to acquire.
•  If the counterparty refuses to participate in the signing of the contract/refuses to deliver the property, they may be compelled by the court for this purpose, and this court decision must be transferred.
• Even when real estate is transferred to a company, the transfer contract must be transferred because the company is now considered the owner of the property and not (possibly) the individual.
• Leases of real estate only when they exceed 9 years in total duration and from the beginning = not when they are extended successively during the lease.

3.What if the transfer is not done?

In the not-so-rare case where the real estate contract has been signed but ultimately not transferred, the situation changes, and the contracting parties have different claims against each other. This case concerns the scenario where it is certain that the transfer will never be completed and not when it is merely temporarily postponed.

Firstly, the buyer is entitled to withdraw from the contract to which they committed, and if they had made any down payment/the entire price of the contract, they can seek it from the seller using the provisions for unjust enrichment. It is also important that the buyer is not considered the owner of the property legally and never acquired it since the transfer did not take place = if the property has burdens and debts, the seller’s creditors cannot claim them from the buyer, as the seller remains the owner of the property as before the conclusion of the contract.

On the other hand, the seller, because they remain the owner of the property, can transfer it to someone else or burden it with another real right such as a mortgage/transfer some servitude, etc. Additionally, as we had written in another text, regarding the liability of the State for compensation, if the transfer was not made due to the error of the land registrar, no compensation can be sought from the State, as the law clearly states that the State is never liable for faults and omissions of the land registrar in the execution of their duties.

4.The contract was canceled after the signing took place.Does anything change?

If the contract was completed normally and the transfer took place, it is not excluded that later, for various legal reasons, the contract may be canceled. Here it must be said that if the contract is void, it is considered as if it never happened (e.g., if the notarial form required for the transfer of property is not observed), while if it is voidable, it produces the results until it is canceled by a court decision (e.g., in case the buyer was misled during the purchase of the property and the misrepresentation is considered substantial).

Based on the predictions of the law, third parties who transacted with the owner of the property until the contract (and therefore the transfer) is canceled are protected = they do not lose the real rights they acquired until the cancellation. However, this applies under the condition that the third parties were acting in good faith, meaning they neither knew nor ignored, due to gross negligence, that the contract between the original buyer and the seller was void from the beginning and therefore would be overturned soon. Subsequent bad faith does not harm = even if the third parties learned later the above events, they would be legally protected, as only the timing when the contract was drafted matters, and therefore the will of the third party at that time is critical.

It may seem obvious, but to cancel the transfer of the contract that took place, the one who achieves the cancellation with a court decision must transfer the same court decision next to the original contract that was transferred. Thus, the legal situation that was formed will be known to all = whoever transfers their contract after the transfer of the court decision will not acquire any rights over the property because the original contract is considered as if it never happened.

5.What happens if many transfers occur on the same day?

Looking at the mortgage records of Greece until recently, one would easily find that often there was a long wait for transfers on property fractions, which could take up to… weeks! For this reason, the question of what happens if many transfers coincide on the same property on the same day is critical:

• Generally, the principle of chronological priority applies to real rights.
• This means that whichever real right is transferred first will prevail, and therefore, if it conflicts with subsequent ones, they will have no effect.
• The transfer to a property does not occur directly = the mortgagee initially prepares a report for the transfer, which is later entered in the report book.
• Therefore, based on what we initially mentioned, the date of the transfer act is of great importance, as whichever act precedes chronologically is the one that will be transferred first.
• In the case of 2 transfers even within the same hour, the one that was made even a minimal time earlier will be recorded first.

All of the above are important especially regarding mortgages. If, for example, the contract for the transfer of the property is transferred on the same day and 1 hour later the notarial act of the mortgage is transferred, the mortgage legally will not exist as the one who assigns the mortgage to the (so far) property will have already transferred it to someone else, and thus without the consent of the latter, the mortgage cannot be recorded on the property and produce its legal effects. It is another matter that the lender can file a lawsuit for violation of the transfer if it was done out of collusion to harm him.

6.Can I conduct a document search by myself?

To conduct a title search at the competent land registry, the law allows the interested party to perform the search either with a lawyer or alone with a lawyer who has been duly authorized. Essentially, a title search involves the authorized clerk making the record books available for consultation by the interested party.

Because, according to the land registry system, the search is based on the sections of the respective volumes of transcripts, the search should start from the name of the current owner/holder/legatee of the property, in the section where the legal titles concerning the property/properties are registered.

Of course, care must be taken during the search in the transcript volumes to avoid any damage to the archive and the respective books, while photocopies/certified copies can only be obtained with permission from the competent registrar. In any case, it is useful for the interested party to consult the register book, as there may be pending acts of transcription that have not yet been recorded in the corresponding transcript volume, so they may not appear directly during the search.

7.What is required for a transcription to be valid?

In order for the act of transcription to be valid, the law requires certain conditions to be met to ensure its validity in the public records. Therefore, the transcription:

• Is never done ex officio but only upon request of anyone with a legal interest = the seller, the buyer, the legatee, the assignee, etc.
• The legal title must clearly specify the location and boundaries of the property, its use, its area, etc.
• For this reason, a topographical diagram is usually submitted to facilitate the proof of the above.
• Even if not all of the above elements are mentioned, if the identity of the property can be clearly established from the other elements with great certainty, then the transcription will be valid.
• The registrar, on the other hand, is entitled to refuse the registration of an act for transcription if the legal title is obviously void (e.g., transfer of property with a private document) or if the document is not in good condition (e.g., it has marks, cracks, scratches).
• Finally, the legal title is registered in the section of the person (in alphabetical order), which in turn refers to the book of transcripts generally concerning the properties.

8.How are properties shown in the Cadastre system?

The Cadastre system, concerning the classification and display of property sections, is quite different from the ‘classic’ system of the cadastre. This is because in the Cadastre, the search is not based on the person of the owner/seller/legatee, etc., but directly based on the property itself. Thus, each property is given a unique KAEK (Code Number of the National Cadastral System), and the interested party can directly obtain information on the real burdens of the property and generally any title that has been registered on it by typing this number.

This is why the registration of the deed on the KAEK of the property is important. Because only registered acts have legal force for third parties = if the act has not been registered and the third party relies on the registration of the Land Registry, then the owner of the property cannot argue that, for example, it was transferred to another since the deed of transfer had not been registered.

This is also the reason why, according to the law, third parties who transacted in good faith with the owner of the property while the registration of the act concerning the property was pending cannot later suffer restrictions on their rights, as they reasonably believed that only registered acts on the cadastral sheet would have legal force. All of the above describe the phenomenon of the public faith of the Cadastre = only acts registered on the corresponding cadastral sheet for the property are valid against third parties, and only based on this will the fate of their rights be judged in case of conflicts between multiple real rights.

9. How do land registry entries work?

To better understand the system of entries in the Land Registry, we can visualize it schematically. So:

• The cadastral entry is exactly a representation of the respective real right that exists in the property, as it was represented until today in the respective books of mortgage offices.
• Entries are distinguished as initial and subsequent. The former are those made for each property when the operation of the Cadastre begins in the respective area, and the latter are those added later by the interested parties, provided that the corresponding contracts are also concluded.
• Also, entries are distinguished as provisional and definitive. The rule is that the entry is initially provisional, and only if the corresponding action to challenge it is brought and this action is rejected, or if the deadline for bringing the action expires, the entry becomes definitive.
• It is important to note that provisional entries do not produce evidence of legality = they are not deemed legal and correct until they are annulled, but if the interested party trusts them, they do so at their own risk, as the entry is not yet definitive.
• If there is an obvious error in the cadastral entry, the corresponding application for correction can be filed to correct the error and thus avoid causing damage to any third party who would trust the incorrect entry.
• As mentioned above, for an entry to become definitive, an action must be brought against it, and this action must be dismissed. However, the entry becomes definitive only when the court decision rejecting the action becomes final = no legal remedy can be brought against the decision anymore.
• Equally important is that for each subsequent entry made in the Cadastral file of the property, a legality check is carried out = the entry is checked for errors/invalidity for any reason, and an ‘improved’ form of the entry is recorded.

10. Are there any specifics regarding property seizure?

Property seizure as a process, although quite common in practice, presents several technical issues that it is useful to be aware of. Thus, for the process of property seizure to be legally valid, several performances of the seizure report are required, and the latter must be transcribed in the mortgage office/Land Registry.

Specifically, regarding the applications, the seizure report prepared by the judicial officer in the presence of the debtor must be delivered to the debtor himself if he is present or if he refuses to accept it, a report must be drawn up certifying his refusal. In addition, the same delivery must be made to the third-party owner of the property if the property seized does not belong to the debtor.

However, the most crucial aspect here is that within 5 days from the date of seizure, the seizure report must be delivered to the mortgage registrar or the Cadastre official of the region where the property is located. The latter is obliged to register the seizure report on the same day in a special book of seizures kept there, and within 5 days again to deliver to the judicial officer the certificate of burdens of the property = if the property has encumbrances such as mortgages/other seizures, etc.

Based on the above, we understand that even in the process of seizure, the importance of transcription/registration in the Land Registry is enormous: this is because if before the transcription of the seizure, any act of transfer of the property is registered, then the buyer will validly acquire the property without the burden of the seizure on it! This is the most important aspect of the principle of chronological priority of real rights that we mentioned above.

Next to the client and his needs.

Athina Kontogianni-Lawyer

The above does not constitute legal advice, and no responsibility is assumed for it.For more information, contact us.