When I lease my property to the Greek State, does the general legislation on commercial leases apply?
No. A lease in which the lessee is the Greek State is governed by a special legislative regime, namely Law 3130/2003. In order for such a lease with the State as lessee to be concluded, a special administrative procedure is required. The competent authority for concluding property leases for the housing of public services and the covering of their operational needs is the Property Service (Ktimatiki Ypiresia) of the Ministry of Economy and Finance, within whose territorial jurisdiction the properties to be leased are located.
What is the procedure for leasing a property to the Greek State?
To initiate the property lease procedure, the head of the service to be housed, or its supervising authority, submits a relevant request to the competent Property Service. If the service is already housed, the competent Property Service, at least ten months before the expiry of the lease, addresses a written communication to it requesting information on the necessity of concluding a new lease. In any event, that service is obliged, at least eight months before the expiry of the current lease, to address its request to the Property Service. The Housing Committee then convenes and issues an opinion in accordance with the law. If, according to the opinion of the Housing Committee, there is no public property in the search area capable of covering the housing needs of the interested service, then on the basis of that opinion and the approval of the relevant credit, the Head of the Property Service prepares a draft auction notice (diakiryxi), which, accompanied by the above documents, is submitted for approval to the Minister of Finance.
Content of the auction notice. The auction notice contains: (a) the title of the service to be housed; (b) the type of property requested for lease, with a brief description of the spaces and corresponding surface areas; (c) the area in which the property must be located; (d) the particular conditions which the property must satisfy; (e) the general terms of the lease, as set out in this Law; (f) the duration of the lease; (g) the maximum monthly or annual rent and the terms for its adjustment; (h) the day, time, duration and place at which the auction will be held at the seat of the competent Property Service; and (i) additional or special terms.
The auction is conducted before the Housing Committee. Within ten days of the completion of the on-site inspection of all properties offered for lease, the Housing Committee draws up minutes by which it issues an opinion on whether each property meets the terms of the relevant auction notice and on its suitability, indicating the works required. The minutes are served on those who submitted offers in the auction and are posted outside the offices of the service that issued the auction notice.
At the same time, those whose properties offered for lease have been judged suitable are invited, after accepting in writing the terms of the minutes referred to in the previous paragraph, to take part in the oral descending-bid auction before the Committee. The Committee meets in public session on a specific day and time, at least ten days after the drawing up of the minutes referred to in the previous paragraph. If the owner of a property judged suitable raises objections to the acceptance of the terms of the suitability minutes, the Housing Committee draws up supplementary minutes, by which it accepts or rejects those objections.
Those who, pursuant to the auction notice, offered properties for lease which have been judged suitable bid orally below the lowest offer. These descending bids are recorded in order in minutes and announced together with the name of each bidder.
Following an interim procedure, the Committee draws up minutes which are forwarded for approval to the competent Minister. By the same approval decision, the head of the competent Property Service to which the decision is addressed is instructed to serve it on the lowest bidder against acknowledgment of receipt and to invite him, within a period to be set, to attend for the conclusion of the lease agreement.
The lease agreement then follows. If the successful lowest bidder fails to attend within the set deadline for signature of the lease agreement, the bidder is, by decision of the Minister of Economy and Finance, declared in default (ekptotos) and his participation guarantee is forfeited in favour of the State as public revenue. By the same decision, the competent Property Service is instructed to repeat the auction, in which the bidder declared in default may not participate.
What are the obligations of the lessor of a property leased to the Greek State?
The lessor is obliged, upon commencement of the lease as set out in the agreement, to deliver the leased premises to the use of the State in a suitable condition and in conformity with the terms of the auction notice, the approval decision and the lease agreement. Otherwise, the lease is dissolved by decision of the Minister of Economy and Finance and the guarantee deposited in favour of the State is forfeited. The State proceeds to a new lease without auction and the bidder is obliged to compensate the State for the failure to deliver the leased premises in a proper manner, in an amount equal to 1/10 of the monthly rent provided in the agreement for each day of delay until the final housing of the service in another suitable property; this amount is certified as public revenue and collected pursuant to the provisions of the Code for the Collection of Public Revenue (KEDE). The obligation to pay compensation of 1/10 of the monthly rent referred to in the previous paragraph also arises if the leased premises are not delivered on time. The consequences of late delivery do not arise in cases of delays attributable to the fault of the State or to force majeure or to a fortuitous event.
If lease disputes arise between the lessor (private party) and the lessee (the State), which courts have jurisdiction — civil or administrative?
The civil courts. The provisions of Law 3130/2003 do not establish, as regards the conclusion and performance of the lease agreement, an exceptional legislative regime that secures for the State, as lessee, a privileged position not appropriate to a private-law contract (cf. Special Supreme Court 3/1999; Council of State (StE) 120/94). Consequently, lease agreements concluded under Law 3130/2003 do not have the character of administrative contracts, and accordingly disputes arising from such agreements, which are concluded by the Greek State for the housing of its services as in the present case, are private-law disputes falling within the jurisdiction of the civil courts.
- See article Eviction of Tenant
- See article Professional – Commercial Leases
- See article Lawyer for Leases – Evictions
FREQUENTLY ASKED QUESTIONS ON LEASING PROPERTY TO THE GREEK STATE
1. What are the special features of a lease in which the Greek State is the lessee?
A lease of property to the Greek State is not governed by the general legislation on commercial leases, but by the special regime of Law 3130/2003. The lease is concluded following an administrative procedure that includes the issuance of an auction notice, on-site inspection, an opinion of the Housing Committee on suitability, an oral descending-bid auction, and approval by the competent Minister. The competent authority is the locally competent Property Service of the Ministry of Finance. An owner contemplating leasing to the State should be aware that the terms are not freely negotiated as in a private lease, but are determined by the auction notice and the agreement drawn up by the competent service.
2. What can I do if I disagree with a term of the auction notice or the suitability minutes?
An owner who submits an offer and whose property is judged suitable, but who disagrees with terms of the suitability minutes (e.g. works required of him), has the right to raise written objections. These are decided upon by the Housing Committee through supplementary minutes. In the event of rejection, or where the administrative act is considered legally defective (lack of reasoning, breach of the terms of the auction notice, unequal treatment), the owner may bring the legal remedies available against administrative acts. Properly substantiating the objections from the outset is critical, since failure to react in time leads to acceptance of the terms.
3. How long does the procedure take until the agreement is signed?
The procedure is relatively time-consuming and as a rule requires several months, since many administrative stages are involved. The service to be housed is obliged to address a request to the Property Service at least eight months before the expiry of the existing lease. There then follow the drafting and approval of the auction notice by the Minister, publication, submission of offers, on-site inspections, the drawing up of suitability minutes, the descending-bid auction (held at least ten days after the minutes), final approval by the competent Minister, and the summoning of the lowest bidder for signature. The owner needs patience and ongoing monitoring of each stage.
4. What documents do I need in order to participate in the auction?
The owner must gather title deeds for the property, certificates of registration of title and of encumbrances, the building permit, topographical diagrams and floor plans, the energy performance certificate, an engineer’s certificate of legality and absence of unauthorised constructions, the electronic building identity (Ilektroniki Taftotita Ktiriou) where required, and the participation letter of guarantee specified by the auction notice. He must also submit his written offer setting out the terms and the amount sought, within the limits of the auction notice. Each auction notice specifies particular supporting documents depending on the type and location of the property, which is why review by a lawyer before submission is essential.
5. Which court hears disputes with the State as lessee?
The civil courts have jurisdiction, not the administrative ones. Although the lessee is the Greek State, the agreement concluded under Law 3130/2003 has the character of a private-law contract, since it does not afford the State an exceptional advantage in its performance. Thus, disputes regarding rent arrears, rent adjustment, damage to the leased premises, dissolution of the agreement, or recovery of possession are heard by the Single-Member Court of First Instance, under the special provisions on leases and on payment orders for the recovery of leased premises. This is a significant advantage for the owner, as it avoids the time-consuming procedures of administrative justice.
6. What is the role of the lawyer in a lease to the Greek State?
The lawyer contributes at every stage: he reviews the auction notice and identifies onerous or unlawful terms, prepares the supporting documents for participation, drafts the offer and any objections to the suitability minutes, reviews the agreement before signature, and negotiates corrections to points that prejudice the lessor. When a dispute arises during the lease, he files an application for a payment order for the recovery of the leased premises, brings a lawsuit for unpaid rent, an action for damages for harm to the property, or pursues rent adjustment. The firm’s experience in leases involving public bodies ensures that the owner will not find himself exposed before the administration and the Legal Council of the State (Nomiko Symvoulio tou Kratous), which represents the Greek State.