Paying A Deposit for Property In Greece

Paying A Deposit for Property In Greece By Christos ILIOPOULOS* 2 April 2022 Greeks who live outside of Greece and foreign citizens search and locate real estate properties in Greece, in order to acquire them. Once their offer is accepted and an agreement with the seller or real estate agent on the price and the main terms of the transaction is struck, they are usually asked by the seller to pay a deposit, in order to secure the property. In Greece the terms deposit and down payment could be used interchangeably and they basically mean the upfront payment of a small part of the total price of the property as a gesture of good faith to the seller. The payment of a deposit shows that the buyer is serious and committed to buying the house, flat or plot. At that moment, if not earlier, the buyer must retain an attorney in Greece in order to receive advice on how the buyer’s rights will be safeguarded. The title search and investigation of the real estate property in question is the most significant matter of the transaction, from the point of view of the buyer. To this end, the interested buyer will request from the seller, through his/her attorney, copies of the deeds, contracts, titles, building permits and possibly survey maps of plots or lands, in order to verify the identity of the property and the absence of legal burdens, liens, mortgages and pending litigation affecting the asset to be bought. The seller at that point will most likely request from the buyer a deposit, in order to verify the buyer’s determination to buy the specific property and to take the property out of the market. The deposit is paid while a pre-contract is signed by seller and buyer or by their attorneys. The pre-contract in most cases is a private agreement, stating the basics of the transaction, the identity and main characteristics of the property, the price which the buyer will pay, the time and form of payment and what happens if either of the parties has a change of heart and does not finalize the transaction. The pre-contract will usually state that the buyer is paying the specific amount of money as a deposit and if the buyer changes his mind, without any reason and without having found a legal problem on the property, the buyer will lose the deposit. In other words, the deposit will be retained by the seller, as a result of the unjustified change of heart of the buyer. On the other hand, if the transaction is not finalized due to an unjustified refusal by the seller to follow through with the sale, the buyer is entitled to get back the deposit he has paid. If the pre-contract is signed not in the form of a mere private agreement, but at a notary’s office, with the stamp and legal value of a notarized deed by a notary public in Greece, the buyer who has paid a deposit only to see the seller change his mind without any legal justification, can claim the return of the deposit in double. Notarized pre-contracts are the exception in the real estate market in Greece, but they are not unusual if the property in question is worth a lot, or if the buyer wants to pay a rather large deposit, or when the main closing deal can be signed only after the seller sorts out several legal problems with the property but both parties want to secure that the transaction will actually take place even in the course of several months down the road. A notarized pre-contract could include a term allowing the buyer to sign the main deed of the acquisition of the property on his own, without the signature of the seller, if the terms of the pre-contract have been satisfied by the buyer and the seller does not fulfill his obligation to sign the sale deed. In any case, the prospective buyer of a real estate property in Greece must inarguably retain legal counsel, who is not professionally related to the seller, in order to get advice for all the crucial aspects of the transaction, including the payment of a deposit and its consequences. *Christos ILIOPOULOS, attorney at the Supreme Court of Greece , LL.M. www.greekadvocate.eu e-mail: bm-bioxoi@otenet.gr