Tuesday, November 27, 2012
Time to buy property in Greece? Basic legal advice.
By Christos ILIOPOULOS*
It’s been decades during which real estate property prices in Greece have been steadily increasing. Purchasing property in Greece was almost a safe bet for almost time immemorial. Especially since the property boom of 1998 onwards, when Greek banks started offering loans and mortgages to a relative “virgin” Greek mortgage - finance market, values in many areas have skyrocketed.
That until 2010. When the crisis hit hard in Greece, property values first stopped rising. And then, for the last two or three years, they have started their steady, albeit controlled, decline.
Until a couple of years ago foreign prospective buyers may have thought that the properties they liked in Greece were a bit overvalued. Now this is history. Property prices have declined, in some cases dramatically, to such an extent that many think that now is the opportunity to buy.
If you are among those contemplating purchasing property in Greece, here is some basic advice on the process from A to Z.
First, one has to locate the property he is interested into. This can be done either by personally searching the market and using every bit of information one has on properties, locations, prices, yearly yields etc. or by appointing one or more real estate brokers to find the property with the characteristics one desires.
It must be noted that when you sell or buy property in Greece, you can appoint more than one estate agent to offer you opportunities for a deal. Usually, you are not bound by exclusivity terms and you have the option to take or to decline any offer provided by the agent, even if it meets your initial requirements. If you decide to take the deal, you will have to pay a maximum 2% on the sale price to the agent, who found the deal for you.
Once you have spotted the property you want, and you have agreed on the price, you need to retain a lawyer, who will work only for you. It is advisable that especially if you are a foreigner, not familiar with Greek law and practice, the lawyer should be of your absolute choice and trust.
Retaining an attorney, who comes as a referral from the estate agent or even from the seller’s or developer’s side, may not be a good idea. It is vital that your lawyer protects solely your interests and is not even acquainted with the other party. Many foreigners have purchased real estate property in Greece in the past, not exactly knowing that the lawyer who represented them on the purchase should have been of their absolute choice and trust, and there have been cases where the complications that followed could have been avoided if there was a better understanding between foreign buyers and their Greek attorney.
Once the attorney working for the buyer has become familiar with his/her clients’ desires and instructions, allowing for a client – attorney understanding and confidentiality to be established, the attorney for the buyer will contact the seller’s attorney and the agent, to request copies of the deeds/titles of the property to be sold. The most crucial part of the purchase is to check the titles and confirm that the property is free of any legal burden, lien or other liabilities.
The title check takes place at the local cadaster or land registry, where the property is located. The examination of the good standing of the titles of the property to be purchased takes place on the spot at the local land registry by the buyer’s attorney and it is the most crucial part of the purchase. Only lawyers are allowed to make such title searches and only the buyer’s attorney will have the final say (and the final responsibility) for the purchase to go ahead or not, at least as far as the buyer is concerned.
Once the title search has produced the result that the property is of sound legal standing, or once the necessary adjustments in the titles have been done by the seller (modifications of his titles, deletion of old and forgotten liens etc.), the notary public will start drafting the deed of sale. The notary public is chosen and paid by the buyer. The attorney for the buyer and the attorney for the seller advise the notary public on the drafting of the deed of sale.
The seller and the buyer will execute the deed of sale at the notary’s office, in the presence of their respective attorneys. Each side (seller and buyer) can execute the deed either in person (by physically being present at the notary’s office and signing the deed), or by proxy. Their proxy can be their attorney, a friend or a relative, who must be of their utmost trust.
The foreign buyer must always remember that the funds to be used for the purchase of the property must be wired from the buyer’s bank account abroad to the buyer’s bank account in Greece. If the foreign buyer has funds in a Greek bank, the buyer must have either declared the funds as income in his past Greek tax returns, or must be able to prove that he/she wired the funds in the past years from a bank outside of Greece to a Greek bank.
The final important matter that any foreign buyer of property in Greece must be aware of is that the purchase of the real estate property has not taken place, even after it has been executed by the two parties at the notary’s office, until the deed is properly registered with the local land registry, in the buyer’s name. This usually happens within a few days of the deed’s execution.
*Christos ILIOPOULOS, attorney at
the Supreme Court
of Greece, LL.M.