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FAQ on Real Estate for a Lawyer

Why does real property enjoy heightened legal protection?

Real property, being an asset of considerable economic value, enjoys heightened protection under the law. It is no coincidence that the land registry office, the national land registry (Κτηματολόγιο), and the requirement that deeds be executed before a notary public, all exist. In every well-ordered state, an organised system for collecting title documents is essential for the security of transactions.

The system of cadastral records, known to the public as the national land registry, is the modern institution responsible for the publicity of real estate titles, serving the principle of publicity, which is of paramount importance in property law.

Each piece of real property has its own folio in the national land registry. A person interested in a particular property may therefore consult the page of the public register relating to the property under examination, in order to verify whether there are any in rem changes affecting it and what those changes are.

Moreover, acts concerning a specific property that have not been recorded on the cadastral folio have no in rem effect whatsoever. There is in fact a rebuttable presumption of accuracy of the entries in the cadastral register, and any person who has transacted in good faith relying on the cadastral register retains the right acquired, even if an entry is subsequently shown to be inaccurate.

Why does the title search of a property matter?

This examination is, quite literally, indispensable, because if it is not carried out, or is not carried out properly, significant risks are incurred by the buyer of the property. The title search must be conducted at the competent land registry office and at the national land registry, where the title documents of the property are held. The primary aim of the search is to ascertain whether the seller is in fact the owner of the property.

However, the search does not stop there: it must also be ascertained whether the property is subject to any encumbrances, such as a mortgage, a notation of mortgage, or any other claims. The title search should be carried out twice, and it is particularly important that this be done close to, or ideally on, the day of signing the deed, so as to confirm that no change has occurred.

If the property is to be used for professional premises, the building regulations of the apartment building should be carefully read before the purchase, in order to ensure that the property may indeed be used for the intended purpose.

Is a deposit customary in real estate transactions?

Following the legal title search of the property, it is customary for the seller to request a deposit from the buyer. The deposit is usually paid either by way of a private agreement or by way of a notarial preliminary contract. Where the deposit is paid by private agreement, the lawyers of the contracting parties draft a private agreement which must specify the amount of the purchase price, the manner of payment of the price, the amount of the deposit, the manner in which the deposit was paid, and the date for signing the deed. Real estate lawyers ensure that the procedures will be completed smoothly. It is also customary to include clauses dealing with compliance with the agreement, as well as a provision regulating the fate of the deposit should one of the contracting parties withdraw.

Most often the parties choose to handle the deposit by means of a private agreement; however, the notarial preliminary contract is, as an enforceable instrument, the more advisable option. The notarial preliminary contract contains all the matters set out in the private agreement — that is, everything the parties have agreed concerning the prospective sale and the fate of the deposit. The notarial preliminary contract has, however, the following decisive difference compared with the private agreement: should the seller refuse to appear to sign the final deed, the buyer may either proceed alone to sign the transfer by way of self-contracting (provided, of course, that there is such a clause in the preliminary contract), or follow the judicial route and obtain a judgment ordering the seller to make a declaration of intent. It is therefore clear that the notarial preliminary contract constitutes the safest route for advancing the procedure of transferring real property.

What are the documents that must be submitted to the notary public?

The next stage in the usual course of events is the gathering of the required supporting documents and their submission to the notary public, normally arranged by the seller, as is customary. It should be noted that, in such transactions, the buyer customarily selects the notary public. It is important to note that the real estate lawyer must possess experience and expertise. The supporting documents that the notary public must have in their possession in order to proceed with the drafting of the deed are:

1) the deed constituting the seller’s title of acquisition, on the basis of which the seller is selling and transferring the property;

2) photocopies of the identity cards of the buyer and the seller, so as to verify their identity;

3) where the deed is to be signed by a third person, the relevant notarial powers of attorney must be produced;

4) the seller must obtain and produce a tax clearance certificate;

5) if the seller operates a commercial business, or is a legal entity, or holds any participation in a company, then a social security clearance certificate must be obtained from e-EFKA;

6) where the property is located in an area where the national land registry is operational, a cadastral folio and an extract of the cadastral diagram must be produced;

7) if there is a cadastral surveying office in the area, a certificate for property under cadastral survey is also required;

8) the building permit must also be produced;

9) the topographical diagram or floor plan of the property must be given to the notary public;

10) the engineer’s certificate confirming the absence of unauthorised construction on the property is also necessary;

11) an energy performance certificate from an engineer is now also required, as well as

12) a certificate of no outstanding TAP (municipal property duty), issued by the Municipality where the property is located;

13) the seller’s E9 form as well as the ENFIA certificate for the property.

What is the real estate transfer tax (FMA) and the first-residence exemption?

A frequent question of concern to the parties is the real estate transfer tax. The transfer tax declaration is signed by both parties to the sale, and the buyer is responsible for submitting it to the tax office (DOY) of the location where the property lies. After the buyer has paid the tax, the tax office (DOY) issues the certificate confirming payment of the Real Estate Transfer Tax, which is 3% on the objective value of the property. There is, however, the possibility of exemption from the transfer tax where the purchase concerns a first residence and does not exceed €200,000 for an unmarried person and €250,000 for a married person. This amount is increased by €25,000 per child, up to two children, and for a married person with three or more children it is further increased by €30,000 for the third and each subsequent child.

In the case of the purchase of a plot of land, the exemption from the Real Estate Transfer Tax amounts to €50,000 for unmarried persons and up to €100,000 for married persons. There is also an increase of €10,000 for each of the two children of a married person, and where there are three or more children, the increase is €15,000 for the third and each subsequent child.

It is particularly useful for the buyer’s lawyer to carry out a second and final title search of the property, both at the land registry office and at the national land registry, on the day of signing the final deed, so as to ensure that no entry of any kind of encumbrance has been made against the property, and that the lawyer’s client — the buyer — receives a property free of any legal defect. The real estate lawyer is responsible for ensuring that all procedures are properly carried out and that the client’s interests are safeguarded. The signing of the final deed takes place before the notary public, and both parties sign the final deed.

The lawyers of both the buyer and the seller participate in the procedure, and it is at this point that the remaining balance of the price is paid, since, as mentioned, the deposit will customarily already have been paid in advance. The buyer bears the cost of the notary public’s fee for drafting the deed, which starts from 0.80% of the value of the transaction, a percentage which decreases on a sliding scale as the value of the transaction rises. The cost of obtaining copies is also borne by the buyer.

Why is registration of the deed of sale at the land registry office and the national land registry required?

In property law concerning transfers of real estate, the procedure does not end at the notary’s office. There follows the so-called registration of title (μεταγραφή) of the deed at the competent land registry office or, in areas where the national land registry is operational, the registration of the deed is carried out there. This procedure is undertaken after the notary public has issued copies to the buyer or to their authorised lawyer, together with the necessary applications for registration of the title.

For the requisite procedure of registering the title there is the so-called registration fee, currently set at 0.475% of the objective value or the price (whichever is higher), plus VAT at 24%. The registration certificate is usually received by the buyer after a few days. The buyer must then submit a copy of the deed to their accountant, so that the new property can be entered on their E9 form.

Registration of title is defined as the entry, in public registers, of acts that bring about a change in the in rem relationships concerning real property. Registration alone does not transfer ownership but constitutes a necessary condition for the transfer of ownership, provided of course that the person transferring the property is its owner and that the registered contract has been validly drafted.

The acts that are registered are those which create changes in the ownership or servitudes of real property. The registers of real estate transfers are governed by the principle of publicity, and every competent official is under a duty to make their content available to anyone who wishes to consult them, and to assist that person in finding the information sought.

How is my ownership of a property legally protected?

Ownership of a property may be infringed by any third party in the following unlawful ways: either (a) by removal or detention of the thing, or by any other actions which, while not amounting to dispossession, create serious problems for the owner; or (b) by causing damage to the owner through destruction or harm to the thing, or by extinguishing the right deriving from the owner’s title to it.

In the first of the two cases mentioned, the owner may exercise their in rem claims and demand, by way of judicial proceedings, recognition of their ownership and the return of the thing by means of a vindicatory action (Article 1094 of the Civil Code (AK)); and in the second case, the owner may seek the cessation of the infringement and its omission in the future by means of a negatory action (Article 1108 AK). Moreover, where the infringement of ownership results in damage or harm to the property, the owner may also pursue contractual/tort claims against the infringer, based on the provisions of civil law concerning torts and unjust enrichment.

In the case of total infringement of ownership — which exists where the owner entirely loses physical control over the thing, either through dispossession (eviction from the property) or through detention — the law allows the owner to demand from the possessor or holder that ownership be recognised and that the thing belonging to them by right of ownership be returned, by means of a declaratory action. In cases of infringement of ownership, the provisions on possession are particularly useful in enabling the expedited protection afforded by interim measures.

 

FREQUENTLY ASKED QUESTIONS ON REAL ESTATE FOR A LAWYER

1. What risks do I face as a buyer of real property?

The buyer assumes a significant financial risk and may end up with a property burdened by mortgages, mortgage notations, third-party claims, unauthorised constructions, or discrepancies between its actual and legal status. In addition, there is a risk that the person presenting themselves as the seller may not in fact be the true owner, or may not hold a valid title of acquisition. For properties intended for professional use, the building regulations of the apartment building may prohibit the specific use. As a rule, the legal title search at the land registry office and the national land registry detects such problems in good time and protects the buyer before any sum of money is handed over.

2. How can I secure the deposit I pay?

The deposit may be paid either by way of a private agreement or by way of a notarial preliminary contract. The notarial preliminary contract is the safer option, as it operates as an enforceable instrument. If the seller refuses to appear to sign the final deed, the buyer may either proceed by way of self-contracting, where a relevant clause exists, or bring an action seeking a judgment ordering the seller to make a declaration of intent. The text of the agreement must clearly set out the price, the manner of payment, the date of signing, and the fate of the deposit in the event of withdrawal by either party.

3. How long does a real estate transaction take?

The time required depends mainly on the completeness of the supporting documents and the speed with which they are gathered. As a rule, several weeks elapse between identifying the property and signing the final deed, in order to complete the legal title search, the issuance of tax and social security clearance certificates, the engineer’s certificate confirming the absence of unauthorised construction, the energy performance certificate, and the certificate of no outstanding TAP (municipal property duty). After signing, registration at the land registry office or registration with the national land registry follows, and the registration certificate is usually issued within a few days.

4. What documents are required for the signing of the deed?

The following must be submitted to the notary public: the seller’s title of acquisition; the parties’ identity cards; any notarial powers of attorney; the seller’s tax and social security clearance certificates; the cadastral folio and an extract of the cadastral diagram in areas where the national land registry is operational; the building permit; the topographical diagram or floor plan; an engineer’s certificate confirming the absence of unauthorised constructions; the energy performance certificate; the certificate of no outstanding TAP issued by the Municipality; as well as the seller’s E9 form together with the ENFIA certificate. The collection of documents is, as a rule, undertaken by the seller, but the buyer’s lawyer verifies their authenticity and accuracy.

5. What applies regarding the transfer tax and the first-residence exemption?

The real estate transfer tax amounts to 3% of the objective value and is borne by the buyer, who submits the relevant declaration to the tax office (DOY) of the location of the property. An exemption is granted for a first residence up to €200,000 for an unmarried person and €250,000 for a married person, with an increase of €25,000 for each of the first two children and €30,000 for the third and each subsequent child. For the purchase of a plot of land, the exemption thresholds are €50,000 for an unmarried person and €100,000 for a married person, with corresponding increases per child. The lawyer verifies whether the conditions for the exemption are met in the specific case.

6. How do I protect my ownership if it is infringed by a third party?

Where a third party unlawfully occupies or detains the property, the owner may bring a vindicatory action (Article 1094 of the Civil Code (AK)) and seek the return of the property. Where there is no dispossession but rather disturbances or harm, the appropriate course is the negatory action (Article 1108 AK), seeking the cessation and future omission of the infringement. In parallel, contractual and tort claims for damages based on tortious liability or unjust enrichment may be available, while in cases of infringement of possession, interim measures may be sought for immediate and expedited protection. The lawyer chooses the most appropriate procedural route depending on the actual circumstances.


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