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PRACTICAL INFO

Leasing property in Greece

For Residential Use

According to the provisions of the Greek Civil Code, lease agreements for residential use bear no significant restrictions. Both parties are free to negotiate the terms and conditions of the lease agreement. The only restriction imposed is a minimum term of three years, which is mandatory. This practically means that, unless three years have passed, the lessee may not terminate the agreement, otherwise the lessor is entitled to compensation. The rent is freely determined by the parties, however its annual increase is usually set based on the annual inflation rate as defined by the Bank of Greece plus 1-2%. In most cases, the lessee pays, upon signing of the agreement, the lessor an amount equal to two monthly rents, as a guarantee for the proper execution of the agreement.
Upon signing of the contract and within one month, the lessor should authorize and deposit a copy of the lease agreement in the local Tax Authority.


For Commercial Use

Commercial lease is regulated by the provisions of the Presidential Decree 34/1995 as well as certain provisions of the Civil Code. However, a number of commercial leases do not fall under the PD 34/1995, for example lease agreements inherently of short duration, lease of public buildings and areas etc.
Upon signing of the contract and within one month, the lessor should authorize and deposit a copy of the lease agreement in the local Tax Authority.

- The rent is freely determined by the parties in good faith. The annual increase, if any, is usually set based on the annual inflation rate as set by the Bank of Greece plus 1-2%.

- According to Presidential Decree 34/1995, all lease agreements for commercial use have a mandatory minimum term of 12 years. If the lessee remains in the lease even after the 12 years period has expired and the lessor does not file a petition against him for the evacuation of the lease within 9 months from the expiration of the 12 years period, the agreement is by law renewed for 4 additional years.
The parties may determine a shorter term for the lease, less than 12 years, provided that after their initial agreement, they enter a new written agreement amending the lease term to the period desirable by both parties.

- Lease agreements are indicatively terminated:

  1. Upon expiration of the 12 years period or the 16 years period, in case the lease has been renewed as described above.
  2. Upon expiration of the term agreed by the parties.
  3. If the lessor wishes to personally use the lease. In that case, the law sets certain conditions, among which are: a) The lease term agreed by the parties or a minimum period of three years - if the compulsory 12 years period is in effect - should have elapsed and b) the lessee is entitled to compensation up to 16 monthly rents.
  4. If the lessor wishes to build in the leased property, provided that he complies in full with the provisions of the Presidential Decree.
  5. If the lessor wishes to make residential use of the leased property, provided that he complies in full with the provisions of the Presidential Decree.
  6. The lessee is entitled to terminate the agreement, even before the 12 years minimum term has expired, under the following conditions:
    - At least two years of the lease term have elapsed.
    - The lessee notifies in writing the lessor for the up coming termination 6 months in advance.
    - The lessee pays the lessor a compensation for the early termination of the agreement, equal to 4 monthly rents.
  7. In case any of the parties (the lessor and the lessee) breaches the terms and conditions of the lease agreement.



The above text is merely a short summary pointing out the basic issues of the Greek Civil Law with respect to leasing property. Under no circumstances, should it be regarded as legal advice. Prior to any property acquisition, please seek the professional guidance of an attorney.


 
 
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