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Rent a Property at Greece

Thinking of Renting Your Property in Greece? Want to hold onto that fa mily apartment but you’re concerned about oversight? As absentee land owners there are positive and negative aspects to renting out your property in Greece. The biggest plus is the ability to hold onto family land, for sentimental or financial reasons, and in m any cases realize positive cash flow. The negatives can be the obvious difficu lty in managing a pr operty and its tenants when residing abroad. In addition, certai n circumstances may require legal intervention, such as an eviction, and the sl ow moving Greek judicial system can make removing a tenant a difficult and lengthy proce ss. As many landowners only visit their properties once a year it may make financial sense this day and age to rent out that unit or that lot of agricultural land and let the property work for you. In Greece, the standard lease for a non-co mmercial property is three years. The standard lease for commercial property is 12 years. As an owner you should be prepared for your property to be occupied fo r at least that amount of time. While a lease can be created for a shorter period of time, the laws of Gr eece will protect the tenants’ rights for the full th ree/twelve year duration. Renting a finished condominiu m (owned apartment) in Greece In the Greek market, units are rented for the most part empty, unfurnished and often without major appliances. So when an individual/family moves into the condominium all of their belongings are moved into the unit as well. When renting to foreign individuals, often fully furnished apartments are desired, but foreign rent ers make up a very small percentage of the Greek rental market. Deciding in advance which market you wish to rent to can cut down on moving and st orage expenses in the long run. Similar to many countries it is customary to put down a first and a last month security deposit at the time the lease is signed. The security deposit is returned at the end of the rental period if the unit is returned in good condition. In Greece, one copy of the lease is then filed with the tax office by the landowner, while a second copy is filed with the tax office by the tenant themselves. At year end, the property ow ner is required to list the amount of rents collected ( E2 tax form) in his annual income tax filing (declara tion). The tenant will declare on their own annual tax filing (declaration) the rents they paid out. Owners are taxed once a year on their rental income and it is usually not a sizable amount. For example on a 70 sq . meter apartment (approximately 754 sq . ft ), if the annual rental income is below 9,500 euro the tax will be 5%, over 9,500 in rental income the tax percentage increases. Property Management In the renting of units there are all sorts of issues that confront the property owner: finding a tenant that will rent the unit, colle cting the rents, upkeep of the unit, making sure annual rent increases agreed upon at lease signing are bei ng deposited, paying taxes and, legal action to remove a tenant if necessary. In Greece, the concept of property management as a separate business is rare. Attorneys often step into the role of overseer acting as the agent between the tenant and the owner. Often through a legal agreement, an attorney will take on the role of agent for the property owner. As an agent/property manager , the lawyer would: publicize to find tenants and fill the unit; ov ersee the rental agreements; veri fy the collection of the rents and see that all the bills and necessary steps ar e met to rent the unit. In addition, if any problems arise such as late rents, remo val or tax questions, then the attorney-agent can act in a timely manner to address the issues. In Greece, rents are usually paid directly into a bank account of the landowner. A common way to carry this out so that the a ttorney is able to monitor the deposits is for a joint account to be opened holding the nam es of the landowner and the attorney. Another way is a Power of Attorney that enables the attorney-agent to request monthly statements issued by the bank, to be able to oversee that rents are deposited in a timely manner and if necessary, with the owner’s permission, withdraw funds to pay for maintenance or additional common expenses required by the apartment building in excess of monthly expenses. The attorney chosen to act as agent should have a property law background to address any issues that may arise such as tax issues on behalf of the landowner, and if need be, eviction proceedings. Usually the attorney receives his fees (for overseeing- not for court procedures and fees that may be necessary and are charged se parately) once a year, receiving a percentage of the annual total of collected rents (a set per centage agreed upon in advance to manage the property). The tenants themselves pay the utility bills on the unit in addition to the preset rent. They are also required to pay the common expenses ( Kinokrista ) which are the building maintenance expenses. Kinokrista encompasses all multi unit building expenses outside of the unit, such as: el ectricity, water, heat and if there is a doorperson living in the building, their wages. Fo r example, my building just converted its heat from oil to natural gas. The additi onal expenses for the conversion, over and above what the common expenses usually ar e, would not be charged to the tenant but to the landowner directly. In this case your agent can step in and make payments on these fees. Likewise if there is a major bu ilding renovation, such as painting outside the unit, or a new elevator in an older buildin g, these costs would be the responsibility of the owner. Removing a Tenant The Greek legal system on many fronts is slow. The Law is protectionist towards tenants. It used to be even har der to remove a tenant fr om a property, often taking more that a year, sometimes two, in the courts to evict. Though currently the procedures and processes are quicker, (remember quicker is a relati ve term), therefore to evict, one should expect from four to ei ght months at least depending on the area of Greece in which the petition is filed. The prefectures that are cover ed by the Courts of Athens usually take about 8 months to carry out an eviction. In addition to the time frame are the expenses, both legal and administrative which are inherent in an eviction process. The most common grounds for an evic tion is the non payment of rent or lease expiration. Renting Agricultural Land Leases can also be made on agricultural land permitting the renter to enter and: pick olives, graze sheep, harvest fruit trees, vineyards etc. The true benefit to an agricultural lease is not the rent, which may be calculated by harvest or by year, but that it documents the ownership rights of the landowner. Theref ore, if ever an issue of trespass was to arise, the lease stands as testament that the ow ner claims all his ownership rights and has not abandoned or neglect ed his property. Even if the rent is a block of cheese per year, the written agr eement between parties declares who owns the land. There are procedures and processes when r enting your property in Greece. As a landowner make sure you understand the im plications to you and your property, and weigh the benefits and costs of renting out your property. As always, your titles and taxes need to be up to date when considering w hether to rent your property. Renting is a viable way to help hold onto your herit age here in Greece, keep it maintained properly and also generate some income beyond the necessary expenses.