The rights in real estate
Real property rights, i.e. rights which provide to the beneficiary direct and absolute power, are the ownership (article of C.C 999), the servitudes (articles of C.C 1118) and the mortgage (article of C.C 1257). Furthermore, the following distinctions are also met:
- the full ownership, which constitutes a universal real right. It may be absolute or a joint ownership - the bare ownership, which is a limited real right and constitutes a part of full ownership, as the bare owner lacks the advantages of the usufruct, which means he cannot use or exploit his property. Usufruct, if not otherwise determined, is inactivated when the usufructuary dies. Following the death or resignation of the usufructuary, usufruct is unified with bare ownership and the bare owner becomes full owner of the property.
- the usufruct, which is a personal servitude and constitutes also a part of full ownership. The usufructuary may use and derive benefit from the property that belongs to the bare owner. However, the usufructuary must preserve the property intact, i.e. he cannot alter the property’s shape, form, size, etc. Usufruct is constituded with a legal act while the person is alive, or in the event of death, or due to ordinary or extraordinary usucaption.
- The right of habitation, which is a personal servitude and consists of the right of residence in the property belonging to another, until the time of death of the beneficiary.
- The easements, which consist of a limited real right that belongs to the current owner of a specific property (dominant estate), in order that the latter is served at the expense of another property (servient estate).
- The mortgage, which is a limited real right that provides the beneficiary with the power to claim his preferential satisfaction from the value of the property that is burdened by mortgage. It must be conceptually and practically distinguished from a pre-notice of a mortgage, which is a mortgage by legal title, that is subject to the suspensive condition of final adjudication of the secured claim to the creditor and the switch into a mortgage within ninety (90) days from the fulfillment of the condition. Only when the mortgagee’s claim has been finally adjudicated, the current pre-notice of a mortgage can be turned into a mortgage.
Division of real property
Properties may be divided into the following ways; the above real property rights apply to all of them.
a) horizontal property (applicable mainly to apartment buildings):
It is a form of divided ownership. It applies when there is ownership of a separate part of the building (e.g. a building floor or parts of a floor – apartment). Horizontal ownership includes obligatory joint ownership of the common areas of the whole building, such as the plot, the staircase etc.
b) simple – vertical property:
It is a type of divided property. It describes the different ownerships/properties on separate buildings (or parts of these buildings) that were constructed on a single land plot (field, ground).
c) complex – vertical property:
When the buildings that exist (or are under construction) on one single plot are also divided horizontally in floors, apartments, etc. Each co-proprietor is both owner of a floor or an apartment in one of the separate buildings and joint owner of a percentage on the whole plot and the other commonly owned and used things.
The most common ways of acquiring ownership of property in Greece
The following ways of acquiring property are the most common under Greek Law:
- acquisition by contract, i.e. a written agreement between the owner and the buyer that must be made before a notary and be recorded (or registered).
- acquisition by virtue of succession, whether testate or intestate,
- acquisition by gift or by parental grant,
- acquisition of property by auction, i.e. by act of compulsory enforcement brought against the debtor’s property, where the ownership of property is finally acquired by the highest-bidder.
- acquisition by the person who, in good faith, is in possession with legal title of a property for a decade (regular or ordinary usucaption),
- acquisition by the person who is in possession of the property for twenty years (extraordinary usucaption).
- acquisition of title by annexation of a land’s part to the adjacent land, i.e. the removal of property from an individual or legal entity and the administration to another by an act of authority.
- acquisition of property by adjudication, i.e. the award of property with a formative Court order.
- acquisition of property by the system of so called “consideration” (antiparochi). By signing the contract of “consideration” (construction contract) between the land owner and the contractor, the first undertakes to transfer a certain share (percentage) of an undivided land (co-ownership), along with part of the individual properties to be built, to the contractor, who undertakes to construct the building.
City-planning and environmental limitations in real estate property
Article 14 of the Constitution of Greece provides for special preventive or repressive measures, in order to preserve the natural and cultural environment.
In particular, special reference is made to the protection of forests, the master planning of the country, the arrangement, the urbanization and the expansion of towns and residential areas, as well as at the protection of traditional sites and monuments.
Within the above mentioned protection, transfer of ownership and granting of limited real rights in real estate property may be prohibited, limited or subject to a special permit of the Authorities, under special laws.
Such restrictions and prohibitions are found mainly in the following cases:
1. Border Areas
By combination of articles 25 par. 1 and 26 par. 2 of Law 1892/1990, as amended by article 114 of Law 3978/2011, the acquisition of real rights in regions of Greek territory designated as border areas, is permitted to individuals and legal entities that are Greek or have their citizenship or place of business within the Member States of the European Union and the European Free Trade Association without any limitations, as well as to third countries’ nationals but under the prerequisite of a prior authorization by the Greek state. Article 24 of Law 1892/1990, as amended by article 43 par.1 of Law 4278/2014, defined as border areas specific former counties of Greece. With a Presidential Decree, that is issued following a proposal of the competent ministers, the classification of one of the abovementioned specific areas as border area, may be waived or other areas may further be classified as border areas.
2. Forest Areas
The Constitution in article 24 par.1 prohibits the alteration of the use of forests, except where rural development or other uses imposed for the public interest prevail for the benefit of the national economy. Furthermore, in accordance with articles 35 and 72 of Law 998/1979, it is provided that private forests or forest areas or parts thereof that were destroyed by fire, cannot be transferred by segmentation or by fractinal with a transaction inter vivos for a period of thirty (30) years of their destruction, while for the owners of private forests and forest areas bigger than fifty (50) acres that they want to convey to others by sale, it is established a right of preference of the Greek State to acquire them on equal terms.
3. City-planning restrictions
Under articles 24 par. 2 and 3 of the Constitution, the master planning of the country, and the arrangement, the urbanization and the expansion of towns shall be under the control of the State, in the aim of serving the functionality and the development of settlements and of securing the best possible living conditions.
To designate an area as residential and enable the city-planning, the properties included therein must participate, without compensation, at the disposal of land necessary for the creation of roads, squares and spaces for charitable purposes or for the implementation of key public urban projects, as required by law.
By combination of articles 6 par. 1 of Law N.651/1977, 3 par. 1 of Law of Emergency 625/1968 and 2 par.1 of Law Decree 690/1948, it is provided that the transfer of ownership of land in order to create non-integral plots is prohibited.
4. Archaeological Sites
The Constitution, in Article 24, par. 6, provides that monuments, traditional areas and historic elements are protected by the State. Additionally, law 3028/2002 organizes and specifies the protection of the cultural environment, while Art. 10 of the aforementioned law refers to the actions on immovable (archaeological) monuments.
To permit the construction in cities (municipalities) or villages (communes) or rural areas, that have been designated as sites of archaeological interest or that are located near archaeological monuments, a written consent of the archaeological service is required, after a survey is carried out by an authorized officer of the Ephorate of Antiquities (operating under the Hellenic Ministry of Culture and Sports).
In particular, in case of absence of impediment from an archaeological point of view, consent is given in writing to the competent town planning office for the granting of the construction permit. In case of an impediment, or if it is a building of over 250 sq.m or of a height of more than two floors, the case is referred to by the Ephorate of Antiquities at the Local Council of monuments for an opinion. If the opinion of this Council is negative, the interested party has the right to object against to it.
5. Environmental Restrictions
The Constitution provides that the protection of natural and cultural environment constitutes a duty of the State (Article 24 par.1). For this purpose, the State has an obligation to take special preventive or repressive measures in the context of the “principle of sustainable development”. Law 4014/2011, as applicable, as well as the respective Ministerial Decisions issued further tο aforementioned law, provide for a special status of environmental licensing of projects and activities, including the constructions and operations that may have an impact on the environment. Also, since 2011, the issuance of the Energy Performance Certificate for all buildings, which are used for residence (permanent or holiday), offices, commercial purposes, etc. is required before the property can be leased or transferred.
6. Protection of the coast and beaches
According to Law 2971/2001, the coast and the beaches are properties of common use, that belong to the State, which is responsible for their protection and management, as the main destination of these zones is the unimpeded access to them.
For this reason, it is expressly provided that the construction of buildings and other structures on the coast and the beaches is not allowed, except for the pursuit of objectives related to public interest, environmental and cultural purposes.
The same law provides that if individuals claim ownership rights in areas designated as belonging on the coast, then those rights are necessarily expropriated in favor of the State.
The recordation of the transfer of ownership and other real estate transactions
The recordation, i.e. the inclusion in public records, kept by public officials, of acts of any change of the real property ownership rights, ensures the compliance with the publicity of the property relations, as well as the protection of transactions.
According to article 1192 of Civil Code, the acts that must be recorded are the following: 1) the inter vivos transactions, including donations causa mortis, 2) the adjudications or the annexations by the authorities or the award of ownership or other real rights on the property, 3) the judicial distribution of a property, 4) the final court decisions, that include sentence to a statement of will as far as a real right transaction is concerned and 5) the final court decisions that acknowledge ownership or other real right on a property, acquired by extraordinary adverse possession –usucaption.
The Civil Code also provides for the recordation of the act of the inheritance acceptance, when a property or a real right is involved, as well as for the recordation of the property leases for a period longer than nine (9) years (articles 1193 and 1208 of C.C). Non-recordation of the above mentioned acts of articles 1192 and 1193 of C.C has as a result the non-transfer of the property’s ownership, and the non-establishment or abolishment of any other real right.
Mortgages are not recorded, but are registered in special Books of Mortgages.
There are two different recordation systems in Greece, the system of Land Registry Office (“Ypothikofylakeio”) and the system of Hellenic National Land Registry (cadastre, “ktimatologio”). The first system is based on registrations on individuals, while the second system, is based on listings on real estate, which facilitates the direct control of the legal status of a property and creates a greater certainty and transparency at the trading transactions.
In Greece, currently both of systems operate in parallel, but the purpose of the State is to abolish the first system and replace it by the cadastre. The cadastral survey has been completed for only certain areas of the territory, while the rest is in progress. For the inclusion in a Cadastral Sheet of an act that has to be transcribed, an application is required, filed at the competent Office of Cadastre together with specific documents.
After the payment of the transcription fees, all applications are registered on the same day in the calendar of the Cadastre, followed by registration in the cadastral books in chronological order of submission.
The process and costs of obtaining a property by transfer in Greece
The procedure of a property acquisition usually has the following steps:
1. Finding of the property, with the possible contribution of an estate agent. Recent Law 4072/2012 in articles 197-204, as applicable, has introduced various changes to the rules governing the exercise of broker activity in Greece. More specifically, article 198 provides for several conditions to the practice of the profession of an estate agent. The estate agent’s fee is freely traded and subject to an agreement (article 200, par.2b). Usually a fee of a percentage of 2% of actual price paid for the property is agreed.
2. Legal due diligence (title search) of the property
After finding the property of his choice and before signing any contract, the buyer should assign to a lawyer the complete legal due diligence of the property. It is noted that according to article 74 par.4 of Code of Advocates (Law 4194/2013) the presence of a lawyer before the notary is optional, although in case of such a presence the fee is determined by a Fee agreement. The title search takes place at the Land Registry Office and/or at the Cadastre Office at the property’s region and includes the right of the vendor and his predecessors in title (for at least a 20 years period, which is the time of the basic rule of prescription of rights, according to article of C.C 249), and any encumbrances (such as mortgages, pre-notices of a mortgage) against those persons.
3. Technical survey of the property
When the property to be transferred is land or lies off the town plan, it is necessary to recruit an engineer, who will check whether the property meets the legal conditions for construction or check the compliance with the new arrangements for settlement of illegal constructions.
4. The property transfer tax return
Before signing the contract, the buyer or an authorized person has to submit at the competent Tax Office the property transfer tax return that is drafted by the notary and is signed by both the seller and the buyer.
5. The signature and the recordation of the notarial act of property transfer
The signature of the act of property transfer takes place before a notary, after the collection of necessary legal and appropriate supporting documents.
6. The recordation of the transfer title
It takes places either at the Land Registry Office or at the Hellenic National Land Registry (cadastre) of the region where the property is located, after the submission of the required documents, along with an application and the payment of the recordation fees.