Real estate agents in Greece : the best approach for investors

Buying in Greece by investing in real estate as a foreigner exposes the buyer to the risk of spoiling a transaction through poor provision of services.

What are the steps to make to protect your investment? This article is written for those who are not familiar with the basic rules of the profession, and for those who want to test their knowledge of the market rules.

To invest well, it is imperative to be careful with the following points:

1. Is this real estate agent being a real estate agent?
2. As a client, what expectations I am entitled to wait as a provision of services from a real estate agent?
3. What sanctions are available if a real estate agent does not fulfill his/her duties?

Conditions and requirements you may proceed with a real estate agency in Greece

A legal framework for real estate brokers is defined in Articles 197 – 204 of Law 4072/2012 (Official Gazette A 86 / 11.04.2012) and 703 – 707 of the Civil Code. This framework expresses that a « real estate agent » is defined as an individual or a corporate entity who provides real estate brokerage services and sets the conditions for the exercise of the profession.

A real estate agent is the holder of a license that he is obliged to hold in the exercise of his profession. This license officially registers the agent with the Chamber of Commerce and the General Registry of Commerce (GEMI). The holder of a license must have met specific requirements for providing real estate brokerage services.

The following conditions must be complied to obtain a license in order to be legal and to work under control:

1. To be a Greek citizen or a citizen of a European Union Member State or a European Economic Area (EEA) Member State. A third country national is required to have a permit to stay and work in Greece or a residence permit to carry out an independent economic activity.
2. Not to have been convicted of a felony or misdemeanor for the offenses of theft, embezzlement, fraud, misappropriation of funds, forgery or misuse of stamps, infidelity, perjury, fraudulent bankruptcy, fraud on creditors, usury, issuance of an uncovered check, or any of the monetary crimes.
3. Not have been subject to a full or partial judicial guardianship, deprivation or subsidiary judicial guardianship (CC 1666-1688).
4. Have a high school diploma or equivalent foreign school.

These requirements are cumulative, and in other words, collaborating with an “agent” without license could mean that he/she works in Greece illegally, might has been convicted in the past for any felony or crime, doesn’t have the sufficient education to practice, and whose consent has been revoked by court order. Hence the reason for requiring the agent to present you with his license.

If the agent works as a freelancer, the broker is obliged to answer your request and to provide you with such a proof, by their self. If he/she is employed by a company, the person in charge of the company is the one who must provide you with the necessary document (manager, agency director).

What a real estate agent is compel to provide

Brokerage fees are freely negotiable and are not subject to legal thresholds. However, the general rule is that for real estate transactions, the contracting parties pay the broker 2% each. If the buyers or sellers are more than one person, then the amount of the brokerage fee is allocated to each, based on the percentage of his or her co-ownership of the property.

In exchange for which, the real estate broker must:

1. To inform their principals and potential counterparties, prior to the conclusion of the main contract, of the properties of the order property, as well as of any factual defects in it, of which they have evident knowledge. This step is decisive in the process, upstream, it will drive the success of your lawyer’s handover, in your best interests;
2. To inform their principals before the conclusion of the brokerage contract of any case of transaction, in which there is a double order (order of the other party) or another personal or financial interest of the latter is involved, in addition to the agreed remuneration;
3. To protect the professional secrecy and not to disclose to third parties the personal and financial data of their principals, beyond what is necessary for the conclusion of the contract, without prejudice to the provisions of the Law 3691/2008;
4. To make you sign a document that commits you either exclusively or partially, depending on your oral agreement. This document is written either in his/her own name or in the name of the company, it is dated and countersigned, and its content is fully translated because you must understand it. If you have signed a document that is not translated, or that does not contain any legal information, it is de facto considered null and void by the judge.
5. To this, it is important to specify that the professional is held to an obligation of loyalty, i.e., to inform in the pre-contract phase of the specificities to the intervening parties of the property to the purchase/sale to the legal representatives, the lawyer(s). Communicating the elements that bring the two parties together are the qualities of a good agent willing to facilitate a transaction.

Furthermore, an agent may not charge lawyers a commission in a transaction, nor may a lawyer charge additional fees to the party he or she is not representing, which qualifies as fraud. Likewise, an agent may not solicit a commission from any of the parties involved for an act that does not concern his direct professional involvement, neither for a null contract, nor an expired contract after six (6) months.

If you wish to test the quality of the agent’s service, but above all, to secure your transaction, it is imperative that the notary in charge of your file inserts in the contract of purchase the name and surname of the agent, his contact details (and even mentions the company that employs him if this is the case). If the agent refuses or tries to substitute this information with another person or company, it means that he does not meet the conditions of practice of the profession (as stipulated above) and that you expose yourself to be the object of a fraud, with all the consequences that this implies on your purchase.

In any event, there are penalties for not fulfilling the broker’s obligations.

Violation of the broker’s obligations

For the violation of the broker’s obligations, set forth in the above law, criminal and civil penalties are provided. In particular, anyone who acts as a real estate broker or presents himself as a broker in civil contracts without fulfilling the legal requirements and without being registered with the GEMI, is punished by a prison sentence of six (6) months to two (2) years or a fine of five thousand (5,000) to thirty thousand (30,000) euros or both penalties.

In parallel, if your agent is allowed to practice his profession, the disciplinary sanctions that can be imposed by the disciplinary board of GEMI are :

• A written reprimand;
• A fine of two thousand (2,000) euros to ten thousand (10,000) euros;
• A temporary deprivation of the right to practice the profession for a maximum period of one (1) year;
• An imposition of a fine and temporary deprivation of the right to practice the profession;
• A permanent deprivation of the right to practice the profession if the above-mentioned criminal offenses have been convicted.

What to pay attention at first

For your own sake, the most logical reason takes precedence: a real estate broker is a person you can call by his first and last name. Most of the time, he/she delivers a business card or any professional website with practical and legal mentions. He/she is not substitute of an architect, an engineer, a bank officer, a worker or a municipal officer… and even less a lawyer.

This article will follow up on an another one, covering the grey zone of the real estate market. It will clarify what an honest and competent lawyer is required to provide as a provision of services, and it will aim to mitigate the consequences of cancellation of real estate contracts by interference or fraud by agents exercising the profession illegally in Greece.

Emilie LE BON
Jurist in International Law & Economics
Theodorou Law Office & Associates
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