ARENCORES decodes the complexity of Greece’s property law provisions and property declaration -regulation procedures. This article, part of an informative collection, outlines illegal structures and defines the necessary procedures to establish property legality and understand better the necessary property declaration procedures.
A GUIDE TO THE GREEK PROPERTY LAW
As an engineer who has been educated and currently lives in Greece, I am regularly approached by property owners and real estate investors so as to describe how to deal with the changes in the Greek property laws, codes, taxes and regulations. As the owner and operator of the real estate services firm, ARENCORES and founder of the Architecture and Engineering Consultancy Services firm ARENCOS, I provide consultancy to clients all over the world from design to construction and property management, as well as navigation to Greece’s new property laws. This article, defines what constitutes an illegal property, the penalties associated, property declaration procedures, and how to establish your property legality. Will payment of property tax or rates suffice in legalizing a structure’s irregularities? The answer is NO. The following information provided is significantly important, should you wish your property to be compliant to the late Building Legality Laws.
WHAT IS AN ILLEGAL STRUCTURE?
The term “illegal structure” as per the Greek statute, refers to all structures and constructions that were built without planning permission from the Town planning authorities such as the construction of a storage room, garage, conservatory or outbuilding not included in the building permit’s approved architectural drawings and diagrams. The term “unauthorized use” refers to the use of a space that is inconsistent with the purpose that was initially declared in the approved plans of the building permit; for example a space defined as an underground storage in the building permit is unauthorized to be used as a house. Both an illegal structure or unauthorized space use ought to be legalized in respect to the Greek building law provisions.
As of September 21, 2011, the owner of any property (building or land) is responsible for the property legality and is obliged to proceed to the irregularity declaration, if any, and provide the “ Legality Certificate” in order to transfer ownership.
This standard is intended to provide legal and planning security for the parties involved in the property transactions and it basically states the “as-built status” of structures.
The irregularity declaration procedure includes review of the following:
Apparently, property owners in Greece should realize that there is a critical gap on what has actually been constructed in comparison to what has been declared on building permits, certifications and Deeds!
Common paradigm of irregularities (illegal properties) include any closed space areas, extensions to existing buildings as well as enclosed balconies, deck, patio, terrace verandas, car parks, attics and basements or garages converted into living space, all without having been reported in the building permit plans. Owners with illegally converted basements and cellars may face civil and criminal penalties and this is because occupants of illegal structures face potential dangers such as carbon monoxide poisoning, insufficient light and ventilation and inadequate egress in the event of a fire incident. Landscape structures such as, pergolas, fences, rainwater tanks and fixed barbecues, outdoor fireplace, swimming pools and shade canopies all built without permits are also considered as irregularities and should therefore be legalized.
LEGALIZATION DURING THE GRACE PERIOD
While the compliance requirements have not changed significantly, the penalty enforcement risk has increased dramatically. The irregularity legalization Law 4178/2013 pertains to all illegal building works or unauthorized use of a space carried out between the year 1955 and only until 28/07/2011. According to the law all such cases must be declared within 18 months of the date since the law came into force (08/08/2013) and thus property owners could take advantage of this grace period for compliance. The law force was initially until the 8th of February 2016, but has now been extended until the 8th of October 2016.
During the compliance plan grace period property owners are advised to conduct an on-site “legality inspection” for their property, even if they are not considering to transfer their property. Appoint a certified expert from ARENCORES to do an on-site inspection to confirm if your property and the associated structures are in compliance with the specific building and planning permits. Do have in mind that only certified architects and engineers, registered members of the Technical Chamber of Greece can manage, complete and issue the Declaration and the Legality Certificate. In the event of limitations in collecting the procedure’s required documentation (building permits and plans, ownership deeds and contracts of purchase, land registry certificates) a member of ARENCORES can obtain the certified copies on your behalf from the Property Registration Authority, the Town-planning and the Municipality in which your property is registered.
PROPERTY DECLARATION AND IRREGULARITIES
The legalizing law also introduces an important condition: that no property can be sold or transferred without a legality certificate from an engineer, confirming the accuracy of the plans.
The property legalizing declaration involves the irregularity declaration and the fine payment for the irregular structures. The fine is estimated in respect to the size, age etc. of the illegal constructions. The irregular structures’ penalty may be paid in monthly installments or in full with a 20% discount. There is also an option to pay 30% of the total fine and receive a 10% discount in the rest of the fine due.
The was of payment are summarized below:
- pay in full and receive a 20% discount on the total fine;
- pay 30% deposit and receive a 10% discount in the rest of the amount due which is paid in monthly installments; or
- pay interest-free monthly or six-month installments
CAN I AVOID MY PROPERTY LEGALIZATION?
The Declaration and Legality Certificate for your property is indispensable should you wish to sell, rent or transfer your assets to family members. The Notary will request for the certificate as this is obligatory to be attached in all property transfer contracts.
Owners and potential buyers who proceed with a sale or transfer without the legality certificate could face a fine of 30,000 up to 100,000 euros and a six-month prison sentence. This is certainly not another practice from the Greek Government to collect property taxes from homeowners.
The prospective intelligent type of building certification (Electronic Building ID Code) electronic platform will entirely modify the Greek real estate market as we know it today. Through this platform, all information will be monitored and electronically interconnected to public bodies engaged with property ownership such as the Ministry of Finance, the Hellenic Cadastre (Ktimatologio) and the Public Power Corporation. This of course requires that all buildings comply with their legally issued permits, or have been legalized.
I would strongly suggest the building irregularity declaration within the grace period of Law 4178/13 as its further extension, after the expiration date of 8/8/2016 may as well be limited by the Government.
For more information on property declaration and the related property taxation system you can download ARENCORES Guide.