A buyer has been found for the property you are selling, and you must now proceed to the next stages so that the process leading to the final signing of the deed can begin. The sale of real property in Greece is not the simplest matter, as it involves considerable bureaucracy. Beyond the bureaucratic issues, however, it is very important that the seller-buyer relationship be properly arranged from the outset, so that the sale process runs smoothly. Below we comment on the most important stages that the seller must watch out for. In any case, it is advisable to consult your legal counsel before signing any agreements or final deeds.
At the deposit stage
A deposit is usually given by way of a private agreement, which records the terms agreed orally. Particular attention must be paid to cases in which the buyers are obtaining bank financing. In such cases, it must be verified that the buyer has at least the personal pre-approval for the amount at which the property is being sold, in order to avoid pointless agreements. Depending on the circumstances, a notarial preliminary agreement of purchase may be signed; this carries greater legal force, with stronger safeguards for the seller in the event that the buyer withdraws from the purchase agreement without cause.
Regarding the remaining terms
In a private agreement, beyond stating the contracting parties, the property and the price, it is important to record the remaining information and matters orally agreed, which play a significant role in the event of a subsequent unwanted and bad-faith withdrawal by the counterparty. Particular attention to additional agreed terms is required especially in cases where a large deposit is paid and a withdrawal is more likely to lead to litigation. In short, we strengthen our position by proving agreed matters that constitute important information helping us establish any loss we may suffer. Our experience in litigation has taught us important things that should be recorded in a private agreement in order to ground liability arising from negotiations or the return of a deposit. Therefore, before signing a private agreement, all matters orally agreed must be disclosed to the lawyer, so that he can filter the legally substantive information and incorporate it into the private agreement.
Before the deed
If legal encumbrances have been identified by the buyer’s lawyer, contact must be made with the latter so that those encumbrances are also verified by the seller’s lawyer, so that the amounts owed (if any) may be paid and the encumbrances may be lifted and removed. Concurrently with the settlement of the encumbrances, the following must be completed: the electronic building identity (which includes the Energy Performance Certificate and the engineer’s certificate of no unauthorised construction), tax and social-security clearance, ENFIA Certificate, Certificate of no TAP debt, extract of the cadastral sheet and diagram where the national land registry (Kτηματολόγιο) is in place, and certificate of property under cadastral survey where the land registry has not yet been completed. There are also documents required separately where the title of acquisition derives from a parental gift or from inheritance. Our office undertakes to obtain all the documents necessary for the sale of your property.
SPECIAL ISSUES
ELECTRONIC BUILDING IDENTITY
It is now mandatory by law for an electronic building identity to be issued in order to complete the sale. The most common issue observed, which delays deeds, is, on the one hand, obtaining the original floor plans and topographical drawings from the planning authority of the area where the property is located, and, on the other hand, the discrepancy in square metres found upon present-day measurement, which deviates from the older one. In most cases this matter is resolved by means of a unilateral amendment to the deed of horizontal property establishment, executed together with the deed of purchase.
PAYMENT OF THE PRICE
Where on the day of signing the final deed the price is paid in full in cash, by bank cheque, or by transfer to a bank account held with the same bank, no special treatment is needed. However, where the entire price or part of it is paid in instalments, or by transfer from another bank such that the amount cannot appear immediately in the seller’s account, the terms of the deed require special handling for the seller’s protection. In such cases, various safeguards must be provided for, such as the right to register a prenotation of mortgage, or a resolutive or suspensive condition, depending on the amount or the security chosen by the seller.
BUYER’S FINANCING
If the buyer is purchasing with a loan, it is important and necessary that loan pre-approval has also been completed for the specific property. This is because, during inspection (chiefly by the engineer), the bank may have various objections. At the same time, the price will be deferred, with provision for specific securities. In any case, where there is a loan, it is essential to consult your experienced lawyer for your protection.
- See also the article Purchase of Real Estate
- See also the article Fraud against Property Buyers by Sellers
- See also the article Lawsuit for Partition of Property
- See also the article SYPOTHA – Unauthorised Constructions
- See also the article Fines for Unauthorised Constructions
- See also the article Annulment of SYPOTHA Decision
- See also the article Acquisitive Prescription
- See also the article What is the KAEK?
- See also the article Prenotation of Mortgage
- See also the article Eviction of Tenant
- See also the article Professional / Commercial Leases
- See also the article Correction of Manifest Error – Unknown Owner – National Land Registry
FREQUENTLY ASKED QUESTIONS ON THE SALE AND PURCHASE OF REAL ESTATE – LAWYER
1. What risks do I face as a property buyer?
The buyer is exposed to serious risks that often surface only after the deposit has been paid. These include hidden encumbrances (mortgages, prenotations of mortgage, attachments, claim-actions); a defective title of ownership; undeclared unauthorised constructions; discrepancies in square metres between the title and reality; an incomplete or erroneous electronic building identity; pending matters in the national land registry (Kτηματολόγιο); third-party claims (co-heirs, possessors invoking acquisitive prescription); and town-planning issues. There is also the risk of paying a deposit to a seller who ultimately cannot or will not complete the transfer. All of these can be prevented through a thorough legal review before any payment is made and through a properly drafted private agreement.
2. How do I safeguard my money during the purchase?
No amount is paid before the legal review of the title and encumbrances at the competent Land Registry Office or Cadastral Office is completed. The deposit is given only under a signed private agreement that expressly provides for its return (usually doubled, as a penalty clause) if the seller is at fault. Where the price is substantial or there is a time gap before signing, a notarial preliminary agreement is recommended, as it allows for a court action for specific performance. At the signing of the final deed, payment of the price must be made by bank cheque or transfer simultaneously with signing, and always within the limits set by tax legislation.
3. How long does the purchase take to complete?
As a rule, the process takes between one and three months, depending on the particularities of each case. Where outstanding encumbrances need to be removed, unauthorised constructions need to be regularised, square-metre discrepancies require a unilateral amendment to the deed of horizontal property establishment, or the buyer is being financed by a loan, the timeframe is significantly extended. Delays are also caused by obtaining original floor plans from the planning authority and by issuing certificates (ENFIA, TAP, the seller’s tax and social-security clearance). Where the seller’s title of acquisition derives from inheritance or a parental gift, additional documents are required, which add to the timeline.
4. What documents must I check before buying?
Before signing any agreement, the seller’s titles of acquisition are reviewed for at least a twenty-year period (because of acquisitive prescription), together with certificates of encumbrances, non-claims and non-attachments from the Land Registry Office, or the cadastral sheet and an extract of the diagram from the Cadastral Office. Also reviewed are the completed electronic building identity, with the Energy Performance Certificate and an engineer’s certificate of no unauthorised construction; the five-year ENFIA Certificate; certificate of no TAP debt from the municipality; and the seller’s tax and social-security clearance. Where the seller’s title derives from inheritance, certificates of non-renunciation and non-contestation of the inheritance right are also required. Our office undertakes the full legal review and the issue of those documents which fall on the buyer’s side.
5. What can I do if the seller withdraws without cause or refuses to transfer?
Where a private deposit agreement has been signed with properly drafted terms, the buyer is entitled to claim the return of the deposit doubled, as a penalty clause, together with damages for any further loss suffered as a result of the failed purchase. Where a notarial preliminary agreement has been concluded, the buyer’s legal position is even stronger, since he may bring an action for specific performance, so that the court judgment substitutes for the seller’s declaration of will and the transfer is effected. The outcome depends on what has been recorded in writing — which is why proper drafting of the agreement is critical. All matters orally agreed must be transferred to the text, so that they can be proved in any subsequent litigation.
6. What is the role of the buyer’s lawyer?
The buyer’s lawyer carries out the legal review of the titles and encumbrances, identifies mortgages, prenotations of mortgage, attachments or claim-actions, and confirms the seller’s ownership. He drafts or reviews the private deposit agreement, incorporating clauses that protect his client (return of the deposit doubled, resolutive conditions, time-limits). He negotiates the terms of the final deed with the notary public and the seller’s lawyer, ensuring that every encumbrance is removed before signing and that the manner of payment of the price does not expose the buyer. Where there is loan financing, he reviews the terms of the loan agreement and of the prenotation in favour of the bank. Finally, he sees to the registration of the deed at the Land Registry Office or its entry in the national land registry (Kτηματολόγιο), which is the only act that finalises the acquisition of ownership. Our office’s experience in litigation arising from sales and purchases ensures the prevention of future problems.