Unapproved renovations can be a costly mistake
Following changes to the "Golden Visa" program, the Greek real estate market has seen a surge in new properties, including ground-floor apartments converted from former commercial spaces. However, while exploring the market, we’ve noticed that many of these renovations remain unapproved, making it impossible to finalize purchase agreements.
Acquiring a spacious unit in central Athens is achievable, though such investments are not accessible to everyone. As a result, the market has seen a rise in smaller apartments, carved out of larger properties through renovations. These units are more affordable and have strong rental potential. The caveat? Not all sellers take the necessary steps to legalize the newly divided property.
A divided property is originally a single unit—such as a building or plot of land—that has been officially split into several independent parts. Each part is assigned its own legal status and cadastral number, allowing the owners to sell, rent, or pass on each segment individually.
Many properties, especially in popular areas, have been divided without proper legal documentation. This can lead to significant consequences for the owners, particularly when trying to sell. Discrepancies between the actual size of the property and its official documentation often come to light during the transaction process. Additionally, owners face legal risks, including fines, orders to correct violations, or, in extreme cases, the loss of the property altogether. Athens authorities have already begun demolishing illegal constructions.
1. Check Ownership Documents
Ask the seller for the title deed or an extract from the Greek National Cadastre (Εθνικό Κτηματολόγιο) for the specific unit. These documents should outline the unique characteristics of the property, confirming its status as an independent entity.
2. Examine Cadastral Information
Each independent unit must have its own unique cadastral number. Cross-check this number with the cadastral registry or request an official extract to ensure the property's renovations are legal.
Note: Many properties in Greece are not registered in the national cadastre. Approximately 3.3 million plots (22% of the total) remain unregistered. In 2023, a law was passed requiring property owners to register their real estate by the end of November 2024, or risk forfeiture to the state.
3. Review Technical Documentation
Inspect the technical passport or floor plan. These should clearly detail the boundaries and total area of the unit you intend to purchase.
4. Confirm the Address
Each independent property must have a unique postal address or unit number. The absence of an individual address may indicate that the property has not been officially divided.
5. Consult a Lawyer or Realtor
Legal and real estate professionals can verify the property’s legal status and confirm whether it qualifies as an independent real estate unit.
When purchasing a divided property, it is crucial to ensure all legal procedures have been followed and that the property is properly registered as an independent unit with the relevant authorities. This diligence will help avoid potential ownership disputes or legal issues in the future.
There are two approaches to dividing real estate: official and informal. Each comes with its own characteristics, advantages, and risks, significantly impacting the real estate market.
Official documentation involves fully legalizing the property division. The owner obtains all necessary permits and registers the new units in the cadastral system. This approach requires time and resources, as it includes coordination with local authorities, fees for engineers and lawyers, and potential fines for past violations.
Advantages:
Disadvantages:
Informal division involves physically splitting a property into multiple parts while leaving it unchanged in official records. For example, a building might be divided into several apartments rented out, yet in the cadastre, it remains registered as a single entity.
Advantages:
Disadvantages:
Official property division is an investment in long-term stability, while the informal approach remains a short-term solution for those willing to take risks to save money. At Renty, we prioritize transparency and ensure full legalization of all properties we work with.
1. Simplified Selling Process
A legalized property aligns with both factual and legal documentation, making it clean and attractive to buyers. These properties are easier to sell, and banks are more willing to provide mortgage financing for their purchase.
2. Legal Security
Owning legalized units guarantees the protection of property rights. This eliminates risks of legal disputes, invalidated transactions, or loss of ownership.
3. Expanded Usage Opportunities
Legalized properties can participate in government support programs, be eligible for credit and insurance products, and attract more investors. This transforms them into valuable financial assets.
4. Freedom from Administrative Penalties
Owners of legalized properties are free from the risks of fines or orders to rectify violations. Full legal compliance provides peace of mind and confidence in the future.
Legal properties are easier to sell or rent out as they meet all regulatory requirements and ensure legal protection. Banks are more inclined to issue loans for such assets, and participation in government programs combined with freedom from penalties makes them even more appealing. For long-term success, legalization offers security for your investment and the freedom to manage it without concerns.
If you’re looking for stability and confidence in your property investment, opting for legalization is the path to long-term peace of mind.
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