Tenant or Landlord?
FAQ's on Renting of Real Estate Property in Greece
Author: Alexandra Adamidou, LLM, Attorney at Law, Associate at EGNA E.G. Navridis & Associates Law Firm
A property lease contract constitutes an agreement between the landlord and the tenant under which the landlord undertakes to grant the use of property (leasehold) to the tenant and to keep the property in suitable condition for its agreed use and, the tenant to pay the rent in full during the contracted period ( currency) of the property lease.
Property lease is governed by the provisions of the Civil Code while specific arrangements are provided for the commercial lease contracts and, the property leased by the State for the accommodation of public administration services.
The property lease contract is an informal document. It may also be oral or to be silently compiled since the law does not require document compliance. A written contract is imposed on leases where one of the parties is a legal public entity. In leases with an agreed duration of more than nine years, in order, any new landlord to be committed to the tenant bounded by the lease may be concluded with a notarized document, which is entered in the property public registry.
In business practice, the drafting of a private lease contract has prevailed (rental contract) between the parties in order to define their obligations and responsibilities (e.g. the rental contract specifies the additional charges born by the tenant, how many rentals will be paid as a deposit) as well as a proof of the existing relationship. The lease, in any case, must be reported electronically to the Internal Revenue Service for tax reasons.
The rent is paid by the tenant usually on a monthly basis and is defined in monetary terms, it may also be defined in compensation in kind or services. The rent, as well as, the payment date is freely agreed upon by the parties. The rent may be readjusted, based on an agreement by the parties every year, while in the commercial leases an annual adjustment is defined by law. The rent may also be readjusted by a court decision.
The contracting parties may bring an action before the civil courts asking for a rent readjustment, since, because of permanent unforeseen events and situations, a substantial increase or decrease of the rent value of the leasehold makes under the present circumstances the payment of the same rent to be contrary to good faith and business ethics. Change of conditions may include the substantial increase or decrease of the rent value of the leasehold and of another adjacent similar property, the currency devaluation, the economic crisis or, for several reasons, the increase/decrease of property demand and, other cases.
The parties may, with no restriction, agree on a time period for the property lease. In certain cases the minimum duration of the contract is defined by law. Regarding house lease, the minimum time period for the lease is three (3) years.
The duration of the commercial leases is basically agreed upon, with no restrictions, by the parties. However, for lease contracts after 28.02.2014, the law defines a minimum duration of three years. If the agreed time period is more than three years, the longer period applies. If though a shorter than three years or no specific period is agreed, then the three-year duration is applied which commits both parties. However, the minimum duration of the commercial leases entered into force before 28.02.2014 is defined by law to twelve years.
An extension of the duration of the lease may take place before the end time of the lease, either explicitly, with the agreement of the contracting parties, or silently, with the tenant to remain in the leasehold after the agreed time period of the lease. The law defines that the lease concluded for a definite time period is considered that has been renewed for an indefinite period if after the end time of the lease the tenant continues to use the leasehold and the landlord is aware of this and does not oppose it.
During the conclusion of a property lease contract, it has prevailed in the market practice the tenant to pay a certain amount to the landlord which is called ‘deposit’, which normally is equivalent of several months rental. Actually, this is a security and, more specifically, constitutes a down payment against a future tenant’s debt which may remain outstanding and, in that case, will be covered by this amount.
In case the tenant delays in total or partially the rent payment the landlord has the right to terminate the lease. In this case, the lease terminates after a period of one month, except if during this period, the tenant pays the overdue rents along with interest and expenses.
In the case of rent payment delay, there is a possibility that the landlord may ask for the rent payment without the termination of the lease. The tenant on its part, in order to avoid the eviction, may pay the rental up to the court trial. The latter is not the case if the tenant delays the rent payment for a second time.
The financial distress of the tenant does not constitute a valid reason for not paying the rent. Therefore, in case of a rent payment delay, even for a short period, the tenant risks eviction. More than that, in case of a delay of the rent payment, the landlord may ask from the competent court the issuance of an eviction order, if has notify the tenant with a extrajudicial notice – invitation to pay the overdue rents and, a period of fifteen days has been elapsed from the serving of this invitation to the tenant. Rent payment within the period stated above precludes the issuance of an eviction order, only if the tenant is delinquent for the first time. In any other case or if the overdue rents are not paid during the above stated period, an eviction order is issued and served to the tenant which is enforceable twenty days after the serving. In the eviction order a rent repayment order including overdue rents, property expenditures, charges and utility bills, may be added.
The tenant against whom the eviction order has been issued has the right to bring opposition to the order served, from the competent court within a period of fifteen working days after the service date. The tenant by bringing opposition to the eviction order may ask the court the suspension of the order’s enforcement until the final decision on the opposition.
The landlord may terminate the lease contract for reasons pertaining to the misuse of the leasehold by the tenant. Specifically, the landlord has the right to terminate the lease contract and to seek compensation, if the tenant, despite the landlord’s protestation, which constitutes a prerequisite for establishing a complaint, does not use the leasehold properly or treats the leasehold against the agreed use, as well as, in case that does not observe the proper behavior toward the other tenants. If the tenant after the landlord’s protestation complies and discontinues the misuse in a reasonable time period, the court will reject the landlord’s request for eviction.
The landlord is obliged to release the leasehold in the same condition for the agreed use, as well as, to maintain the leasehold in a proper manner for the agreed use during the entire duration of the lease, and is obliged to remove the actual defects when they exist and restore any damages.
If at the time of the leasehold delivery to the tenant, the leasehold bears a defect which prevents partially or totally the agreed use (real defect), or during the lease period such a defect appears, the tenant has the right for reduction or nonpayment of the rent.
A real defect is also considered the prevention of the leasehold use by measures imposed by an administrative authority, or by public law restrictions if in this case the agreed use of the leasehold is actually prevented.
On the contrary, if despite the existence of a real defect, the tenant is using the leasehold seamlessly, according to the agreed use, the tenant is not released from the obligation to pay the agreed rent.
The tenant has the right to terminate the agreement if the leasehold has not been delivered on time.
If the agreed duration of the lease is included in the lease contract, the tenant may not leave before the end of this period, otherwise, the tenant is obliged to pay the agreed rent, even if for its own reasons is unable to comply or does not want to use the leasehold. Eventually, if the tenant abandons the leasehold before the end of the agreed period without a legal or contractual right, the lease is not terminated and the tenant is obliged to pay the rent for the entire period until the end of the lease, even if the tenant does not use the leasehold for its own reasons. In any case, the tenant still owes the rents until the leasehold is leased again, while has the right to subtract from the rent everything that the landlord benefited from a different use of the leasehold, or fraudulently failed to benefit.
The tenant has the responsibility to deliver the leasehold to the same condition it was received. In case that the leasehold is delivered to the landlord with damages, which are not due to the agreed use, the landlord has the right to ask for compensation. In order to demand such compensation the landlord should invoke the lease contract, the damage caused and the amount of damage. This right of the landlord for compensation lapses after a six month period starting from the assumption of the leasehold by the tenant.
As mentioned above, the tenant has the obligation to deliver the leasehold in the same condition it was received. Among others, the leasehold must be delivered empty along with its annexes and appurtenances. If the tenant fails to comply with this obligation and does not remove the movable things brought in, has the responsibility to repair any damage which will be caused to the landlord from the delay of their removal, due to fact that the landlord will be unable to deliver the leasehold free for further use. The tenant is not responsible for compensation if the leasehold has been delivered to the landlord and the presence of the tenants’ belongings does not make unusable the leasehold premises, allowing actually the possibility for the use of the leasehold by the landlord. The tenant has the right to collect its belongings within a six month period from the delivery of the leasehold to the landlord, otherwise loses this right.
Foreign Embassies staff, International employees living temporarily in Greece to work, can make use of the Diplomatic clause in their rental agreements. It is a clause giving them the right to terminate, without any penalty whatsoever, the lease agreement in case their working agreement is terminated or they are reassigned in another place outside the current Prefecture. Unless otherwise stated in the lease agreement, this clause can take effect after the first 12 months of the lease.
Yes, he can. He can rent the property after he has purchased it in order to make a profit out of it.
Whilst every care has been taken to assure that the information contained in this document is accurate, this article is intended for informational purposes only; it is not intended to impart legal advice; readers are advised to seek independent legal advice prior to acting on any statements contained herein. The information contained in this page is in no way a substitute for the Law, which is binding only in the original Greek legislative text.