1.What does the decision of the Supreme Court state?

This specific decision of the Council of State rejected the appeal filed by the litigant against the decision of the first-instance court, which had rejected the issuance of a building permit for the construction of a residence in Patmos. Specifically, it was judged that, in addition to the basic requirement of adequacy = the plot on which the building will be erected must be at least 4 acres (or 4,000 sq.m.), it is also required to have a frontage on a road. Regarding the road, the decision considers that the road must be public and communal = not private as is the case in many rural areas. Furthermore, the conditions stated in the urban planning decree of the respective area must be met. Therefore, in order for a property located outside the plan to be built, two cumulative conditions are required:

• It must have an area of ​​4,000 sq.m. (= not be ‘blind’)
• It must have a frontage on a recognized, communal road

2.So, will I be considered ‘illegal’ for building outside the law’s limits?

This decision we just mentioned has the following characteristics:

• It applies primarily only to the specific case.
• It will certainly be used as a guiding principle for future cases.
• It does not have retroactive effect = it does not concern cases that have already been judged.
• Therefore, property owners who have built buildings outside the plan on their plots will not see their building permits revoked.
• It is not excluded that the decision will also be used by the competent Urban Planning Authorities as a rationale for the actions to be issued if someone, for example, objects to a fine imposed on them.
• Especially the criteria for the communal road (which such roads are a minority in Greece) require clarification, so conflicting decisions may be issued in the future, complicating the matter.

3.When is construction outside the plan allowed?

Given that urban planning in Greece is far from being completed and covering the most important areas of the country, the rule so far has been:

• If we want to build in an area outside the plan, we had to consult the relevant Urban Planning Regulation of the area.
• Basically, the plot had to have a simple area of 4,000 sq.m.
• It was not uncommon in practice for property owners to buy 2 or 3 plots to merge them and reach the necessary area required by law.
• To the above conditions, it is added that the plot must have a frontage on a recognized communal road.

4.How do I know which road is communal?

Here it is crucial to know that there is also Presidential Decree 25/28-11-1929, which concerns exclusively communal roads and those recognized as such. The conditions set by the law seem quite obscure, so for this reason, we need to make the following distinction:

• If the road existed before 1929, this must be proven (e.g., with some administrative act, topographic diagrams, contracts declaring the road communal, etc.).
• If the road was constructed after 1929, then the above evidence is not necessary, as it will have been included in a General Urban Planning Regulation or recognized by an administrative act.

Let us not forget that with the introduction of the Cadastre in more areas gradually, distinguishing between recognized communal and non-communal roads will be easier, while there is also a provision by the Ministry of Environment for the inclusion-recognition of roads in about 70 new areas in the current three-year period, a fact which, if implemented, will significantly facilitate matters.

5.Can non-buildable property be transferred?

It is essential to note that a plot does not need to be buildable in order to be transferred to someone else. In this case, the transfer will be done in the usual way = by a notarial document and registration in the Land Registry, and it does not affect in any way the fact that a building cannot be constructed on the plot. However, communication between the two parties is necessary in this case to avoid either party being surprised, thinking that the plot is buildable when in reality it is not. It is not excluded that the price of the agreement will change, as the suitability is a factor that changes the circumstances in many areas = the price is different for 2 acres of fields and different in cases where luxurious maisonettes with the potential for significant profitability can be built on them.

6.I bought a property thinking it was buildable. How do I protect myself?

This scenario has often concerned Greek courts, with the buyer considering either due to the seller’s error or intent that the plot is suitable and buildable, paying the corresponding price, while ultimately it lacks suitability. Essentially, the lack of suitability is considered a real defect of the property according to established case law. Based on this, the buyer has all the rights provided by the Civil Code and therefore can:

• Request a reduction in the price paid compared to the price of a non-suitable plot.
• Withdraw from the contract if the suitability of the plot is such a significant term that without it the contract would not have been concluded = return the plot to the seller and receive compensation for expenses.
• Request the so-called ‘minor compensation’, meaning the difference between the non-suitable plot and a suitable one (and simultaneously keep the plot).
• Request the defect to be corrected (this is possible only if there was an error in the property diagrams and the suitability was lost ‘on paper’, while in reality, it existed).

7.What happens if I build on a non-buildable property?

This is one of the most common cases in Greece, known as “unauthorized construction.” The law is particularly strict in such cases and specifically provides:

• Mandatory demolition of the unauthorized construction (by the owner/main owner thereof).
• Fine for the construction of the unauthorized building (which is imposed only once).
• Fine for as long as the unauthorized construction remains on the plot without being demolished (which obviously increases as the unauthorized construction persists).

Additionally, unauthorized construction constitutes a criminal offense for which:

• Imprisonment of at least 5 months up to 5 years and a fine ranging from 5,000 to 50,000 euros.
• The fine depends on the type of unauthorized construction and how it degrades the environment.
• This penalty is imposed on property owners/main owners/engineers who provided such authorization/contractors who undertook such works knowing the illegality.

8.What about regularization programs?

To combat unauthorized construction, Greek legislators have provided an opportunity for those who have illegally built structures on their properties to “legalize” them by essentially paying a small fee to obtain the corresponding building permit as required. Important points to note here are:

• Only properties built until July 28, 2011, can be regularized through the usual process.
• For those built after that date, a fine equal to 20% of the building’s value is imposed.
• There is the possibility to dispute the fine, which is confirmed by the report sent by the cadastral service of each Municipality.
• Regarding the fines, the minimum fine for construction is 250 euros, while the minimum fine for retention is 500 euros.
• Currently, there has been no news about a new regularization program for unauthorized constructions, so the process seems to be on hold.

9.Have you heard about the Digital Real Estate Transfer Folder?

In a previous text, we mentioned that from January 1, 2024, the electronic folder for real estate would be implemented, through which transfers could be made electronically, and registrations in the Land Registry could be completed in as little as 1 (one) day, provided there are no issues with the property documents. This seems to have been put into practice, and the Electronic Real Estate Folder has been operational for a few days now. The most significant changes to be aware of are:

• Cash transactions in the purchase/sale of real estate are abolished = transactions can typically only be done via bank transfer/check.
• The submission of the following documents is no longer required for the transfer process to be in order:
• Certificate of Non-indebtedness from the Tax Office
• Issuance of the AKD (Cadastral Diagram Extract)
• Application for registration
• Summary of the contract
• Now, the contracting parties do not even need to come into contact during the purchase/sale of the property, as the entire process takes place electronically under the supervision of the notary.

10.Why has the real estate market frozen during this period?

You may have noticed that for the past 2 months, the real estate market has been stagnant, inevitably leading to a crisis, given that demand is increasing while supply remains relatively low. This is due to some current factors such as:

• The new legislative measures regarding short-term rentals (Airbnb), which we expect to see if they will become law, so that property owners who rent them short-term can put them back on the market.
• The long absence of notaries in response to the new tax bill has effectively frozen the market, as they are solely responsible for transfers, which, even with the Digital Real Estate Folder, will still be conducted electronically but by a notary.
• There is a large number of properties with unclear documentation. Unfortunately, it is not only those in rural areas where the town planning scheme has not yet been extended, but also properties in Athens, which cannot be easily/transferred at all due to the confusing situation regarding their ownership status.

11.What to expect from now on?

Although the landscape regarding the real estate market has not yet been clarified, we could say the following:

• The recent decision of the Council of State abruptly changes the situation = now those who built outside the plan and invoked the 4 acres that their plot had, will find themselves in a difficult position due to the need for the plot to have a facade on a communal road.
• The new ‘puzzle’ with recognized communal roads will create new problems, especially until a large part of the roads in Greece are recognized, and the conditions under which someone can invoke the communal nature of the road are clarified.
• Certainly, things will be helped by electronic property transfers as the procedures will be significantly simplified, but let’s not expect miracles since electronic transfer = ready property folder with all documents ready, which requires time and serious involvement of the property owner.
• Surely, the (high) prices of properties that one sees today in the Greek market will gradually begin to decline, as the above measures are implemented at the legislative level, construction of buildings increases (if we take a look at the sector, we can easily see it). So, the coming months will be interesting (also) in this sector.

Next to the client and his needs.

Athina Kondogianni-Lawyer

 

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