Contract of sale and in rem agreement
Greek law distinguishes between the obligatory contract of sale (the obligation transaction) and the in rem agreement concerning the transfer of ownership (the disposition transaction). However, the parallel to the German abstraction principle ends there: under Greek law, ownership of real estate cannot be transferred independently of the existence or validity of the obligation transaction.
The validity of the disposition transaction necessarily depends on the existence of a valid underlying obligation (the legal basis for acquiring title), such as a valid contract of sale or gift.
The contract is concluded by offer and acceptance. In this context, the general rules on the validity of legal transactions and declarations of intent must be observed and examined separately in each case—particularly issues of legal capacity and representation. It must also be verified that the seller is entitled to dispose of the property.
Another particular feature of Greek law is that good-faith acquisition of real estate is not (yet) possible.
As in German law, both the obligation transaction (usually the sale contract) and the conveyance must be notarized. In practice, both are recorded in the same notarial instrument. Failure to observe the notarial form renders the contract incurably void. In such cases, neither the obligatory nor the in rem transaction is valid, and even registration in the land registry cannot cure this nullity.
Consequently, in cases involving a disposition by a non-entitled person, different prerequisites for claims apply than under German law—representing another significant distinction in legal consequences.
After notarization, the instrument (comprising the obligatory and in rem agreements) must be registered in the Land Registry or Cadastre. Ownership passes upon registration. Thus, ownership transfer occurs only with the registration of the notarized agreement; the registry entry is constitutive.
Registration is usually carried out by the buyer’s lawyer, but may also be performed by any third party demonstrating a legitimate interest. Registration is not subject to any statutory deadline.
Transfer subject to a resolutive condition
Regardless of the agreed purchase price, the tax authorities set so‑called objective values for all properties and use them as minimum values for taxation. In the past, objective values sometimes differed considerably from market values, with objective values significantly lower. Objective values have since been adjusted closer to actual property values.
If the notarized purchase price exceeds the objective value, the higher price is used for taxation; if it is below the objective value, taxation is based on the objective value. In Greek practice, it is common to make the transfer of ownership subject to the resolutive condition of purchase‑price payment. The contract is nevertheless entered in the land register without reservation. Upon payment of the full price, a notarial discharge statement is recorded and then entered in the land register.
Preliminary agreement and mortgage
In many real estate transactions, the contract cannot be concluded immediately—for example, if financing approval is pending or special administrative permits must be obtained—while both parties seek certainty that the contract will be executed. In such situations, the question arises: how can the buyer’s claim to the transfer of ownership be secured?
1. Preliminary Contracts
A preliminary contract is particularly suitable in these cases. By signing a preliminary contract, the parties undertake to conclude the final sale contract at a future date, usually upon the occurrence of specified conditions, with the contract content already defined.
Because preliminary contracts are subject to the same formal requirements as final contracts, a preliminary contract for land must be notarized. Typically, the contract provides for a down payment to be made to the seller upon signing.
To address a party’s refusal to sign after the conditions are met, notarial preliminary contracts often include a self-contracting clause, allowing the compliant party to complete the contract unilaterally. This mechanism avoids the need for judicial enforcement to compel the seller’s declaration of intent.
Additional protections, such as contractual penalties, are also common. These penalties are usually agreed upon for culpable non-performance, and it is customary to provide for immediate submission to enforcement.
Down payments can also be secured through the registration of a pre‑notation of mortgage (pro‑hypotheke), a mechanism commonly used by banks in connection with lending.
Private written agreements between the parties are also possible; however, they lack the legal effects of notarial agreements. Because of the lack of form, such agreements are void and cannot provide the enforcement mechanisms described above. Private agreements create only personal obligations, allowing for potential damages claims, but do not secure the buyer’s claim to acquire the property. For example, a preliminary contract cannot prevent the seller from selling to a third party; in such cases, the agreed legal consequences (e.g., contractual penalties) would apply.
2. Mortgages
Another instrument to secure the buyer’s claim is the creation of a mortgage. The Greek mortgage is roughly equivalent to the German Sicherungshypothek (book mortgage). A land charge (Grundschuld) does not exist under Greek law.
Creating a mortgage requires a title and registration in the Land Registry. The title may arise from:
- A unilateral notarial declaration of the owner,
- A notarial contract, or
- A court judgment.
Once the title is obtained, the mortgage is entered in the mortgage book, and various costs apply. Upon maturity of the claim, the mortgagee may enforce against the encumbered property. Mortgages are attractive because the mortgagee has priority over personal and subordinate in rem creditors. Once the enforcement clause is affixed, the mortgage deed constitutes an enforceable title. Nevertheless, mortgages are relatively uncommon in practice, partly due to cost.
3. Pre‑notation of Mortgage
The Greek pre‑notation of mortgage under Article 1274 of the Civil Code must be distinguished from both mortgages and the German pre‑notation.
In German law, the pre‑notation (Section 883 BGB) secures a claim to grant or cancel a right, giving an in rem effect.
In Greek law, the pre‑notation functions more like a rank reservation or conditional mortgage. It must also be entered in the mortgage book, but its basis is a court order issued in interim proceedings, either by agreement between debtor and creditor or through enforcement proceedings.
The key distinction: unlike in German law, the Greek pre‑notation does not secure a claim to a change in rights. Consequently, it cannot secure the buyer’s claim to transfer of ownership.
Usucapion
Because many plots, particularly in rural areas, are still not registered in the Land Registry, and owners have not formalized their rights through a notarial act and subsequent registration, proof of ownership can often be problematic—for example, in inheritance matters or resales.
In such cases, usucapion (acquisitive prescription) frequently applies, potentially leading retroactively to lawful ownership if the statutory requirements are met. Once a valid title arises through usucapion, it can subsequently be entered in the Land Registry.
Further information on usucapion is available upon request.
No mandatory counsel at notarization of the sale contract
Under Greek law, there is no mandatory requirement to be represented by a lawyer for the conclusion of a land sale contract.
Nevertheless, a party may choose to be represented by a lawyer and not be personally present at the notarization—a particularly important option for non-resident parties. This requires only a special power of attorney, which can be granted before a notary public in the country of residence or at the nearest Greek consulate.
We can prepare the relevant power-of-attorney documents and coordinate directly with the notarizing authority. It is important to note that Greek notaries do not accept general powers of attorney for these transactions; a special power tailored to Greek requirements is therefore essential.
Broker’s right to attend at contract signing
If a broker was involved in the transaction, the broker’s fee becomes due upon signing of both the obligatory contract and the in rem agreement. The contract typically records the broker’s role in facilitating the transaction.
If a broker arranged the conclusion of the contract, they are entitled to attend the notarization and to receive a certified copy of the agreement on the transfer of ownership.
(As of March 2023. All information provided without guarantee.)