TENLAW 3RD WORKSHOPTARRAGONA, SPAIN

18-19 JUNE 2013

Country Presentation onGreece

Thomas KonistisAttorney-at-Law LL.M (Athens Bar)

Team Leader: Professor Elena BargelliFaculty of Political Sciences

University of Pisa, Italy.

Greek Social Housing Policy(1/3)

At present, absolute absence of any kind of aggregated and cohesive social housing policy.

Law no 2963/1954 was the only state initiative towards the formation of a socially sensitive housing policy. It enacted the constitution of ‘Labor Housing Organization’ (in Greek: «Οργανισμός Εργατικής Κατοικίας», abbreviated as ‘O.E.K.’).

O.E.K’s policy comprised loans for the purchase of a house with subsidized interest rates, subsidization of rents to low income families and housing of sensitive social groups.

Greek Social Housing Policy (2/3)

Law no 4046/2012 abolished O.EK, and all the obligations already undertaken of the latter were transferred to a Temporary Administrative Committee, explicitly deprived of the right to plan and implement any new social housing schemes.

The preamble of L. 4046/2012 reads: “First, as a prior action, we will enact legislation to close small earmarked funds engaged in non-priority social expenditures (O.E.K.)…”.

Conclusion: Housing policy is confronted as a non-priority social expenditure and that any housing scheme existed, is abrogated as a direct effect of the economic crisis.

Greek Social Housing Policy (3/3)

The only social housing possibilities that can be found lie within initiatives of charitable trusts or certain municipality services.

However, only a very small part of the population can benefit therefrom (e.g. The municipality of Athens houses 160 people, while the Athenian population amounts to 3.089.698 inhabitants).

Therefore, such initiatives cannot be characterized as any form of social housing plan.

Property of Housing(1/3)

Real Property Right of Ownership. It affords the owner all powers over the thing, while precluding any infringement of any third party thereon without the owner’s consent (art. 1000 GCC).

Most preferred type of housing tenure. 71,72 % of Greek households inhabit owned houses.

Home ownership is also regarded as a socially superior housing tenure, due to the ‘security’ afforded to the owner and the welfare status that is symbolizes.

Property of Housing(2/3)

Financing through own savings, inheritance and mortgaged based loans.

Mixed work contract: Very common way of financing home ownership. The owner of a plot of land assigns the contractor with the construction of a condominium, with the latter’s own expenses. In return, the contractor gets the majority of rights over the land, which respectively correspond to a number of dwellings.

Condominiums: Regulated as a special type of ownership known as ‘horizontal ownership’. Defined as the distinct ownership of a floor or of an apartment, combined with co-ownership on the land on which the condominium is built.

Property of Housing(3/3)

Severe taxation over home ownership is introduced as an effect of the economic crisis.

Apart from the taxes that already existed (Immovable Property Transfer Tax etc.) VAT in a rate of 23 % is imposed on new built dwellings. Result: Dramatic decrease of the national construction activity.

Moreover, Law 4021/2011 introduced further taxation known as ‘Temporary Special Tax of Electricity Supplied Surfaces’, which is collected on a two-month basis through the electricity supplier bill. Said tax is imposed only to the owner of the dwelling, the tenant being provided with the right to lawfully set off above tax with the monthly rent due.

Private Rental Market(1/2)

Rental tenure presumes the conclusion of a tenancy contract, according to which the landlord undertakes the obligation to yield to the tenant the use of a thing for as long as the tenancy contract lasts and pay the landlord the agreed rent (art. 574 GCC).

Greek Law does not provide for any distinction between rental tenures with and without a public task, basically due to the absence of cohesive national social housing policy.

Rental tenure is socially regarded as an inferior housing tenure, due to the feeling of living in someone else’s property.

Private Rental Market(2/2)

Less popular tenure type, compared to home ownership, as 19,8 % of Greek population inhabit rented homes.

Tax reliefs: Despite the fact that tenant cannot deduct the paid rent premiums from his taxable income, however, paid rents can be deducted from the total tax imposed in a rate of 10% of the taxable income and under the condition that the deducted tax will not exceed the amount of 1.000 €.

Housing Quality and Supply Sufficiency (1/2)

Housing quality is depicted in the following chart:

Housing quality and supply sufficiency (2/2)

According to official data, the total of available dwellings reports to the number of 5.476.162 dwellings, while the number of households was found to 3.654.568 and the total population 10.964.020.

Conclusion: In Greece, the supply of available dwellings for residential purposes is sufficient, while their quality appears more than satisfactory.

General Aspects of Greek Private Tenancy Law (1/2)

Regulated by the provisions of art. 574-618 of the Greek Civil Code (GCC), as well as of Laws 1703/1987 and 2235/1994.

Law 2235/1994 completely liberalized private tenancy law.

There exist no provisions concerning any mandatory limits, and the content of the contract is subject to the parties’ free will.

The only ex lege restriction still in force concerns the minimum duration of the contract, provided that the dwelling is used for residential purposes; the contract is valid for three years, even if the parties have contractually agreed a shorter duration.

General Aspects of Greek Private Tenancy Law (2/2)

However the provisions of art. 288 (dictating the principle of good faith in the execution of the obligations) and 388 GCC (in case of exceptional change to the circumstances on which the parties had been based in order to conclude the contract), can be invoked in order to judicially modify the contract.

Recent jurisprudence has accepted that the impact of the international economic crisis to Greek economy can be considered as an exceptional change to the circumstances on which the parties had been based in order to conclude a lease agreement.