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Rent disputes in Greece: What happens when the rent is not paid?

Due to the ongoing financial crisis, disputes among landlords and tenants that regard property and real estate matters in Greece about the non-payment of rents are among the most commonly faced court disputes today. Quite often the owner of leased property, despite all possible efforts made by the tenant to pay the rent, is ultimately faced with a situation where he is required to seek the payment of rent and the eviction of the tenant through the Greek court system. In such cases, he has the following options to choose from:  (a) to issue a court order for the payment of rents and the eviction of the tenant or (b) to file a suit against the tenant.

In this article we will outline the basic features of these procedures as well as the rights of all parties involved.

A.Court Order for the Payment of Rents and the Eviction of the Tenant

What are the rights of the landlord?

The procedure for the issuance of a court order (“Court Order”) for the payment of rents and the eviction of the tenant is a rather quick procedure in which no court hearing is required. The Court Order is not a decision of a court that is issued after a hearing of the parties involved, but instead it is an order of the Judge of the competent court of the area where the leased property is located.

The Court Order is usually issued within twenty days. It is also particularly important to note that the payment of utility bills can be added to this order, provided that the landlord has a written receipt of their payment.

The requirements for the issuance of a Court Order for the payment of rents and the eviction of the tenant are the following:

  • Delays in the payment of the rent
  • Written lease agreement or similar document
  • An out-of-court notice from the landlord to the tenant which has to be served at least fifteen days prior to the application for the issuance of the Court Order.

By means of this out-of-court notice, the tenant is summoned to pay the rents due and / or any other expenses such as utility bills. It should be noted that if the tenant pays his debts within this time period, the Court Order cannot be issued, unless it can be proven that there is a repeated delay of non-payment of rents. According to the relevant case law of the courts, such delay exists when there is a delay in payment of rents on at least two different occasions and the owner has contested these delays,   even if he has not proceeded with court proceedings against the tenant. Furthermore, according to recent case law of the Supreme Court, the financial difficulty of the tenant is not considered as being a reasonable justification for the non-payment of rents.

It should also be noted that there is no longer any obligation to submit to the Court a certificate that the rents of the last two years have been declared in the tax return. It is also not required to produce an ENFIA certificate for the payment of property tax of the leased property in order to issue this Court Order.
The Court Order is enforceable after a twenty day period after its notification by a bailiff to the tenant. Therefore, twenty days after its notification, the landlord may proceed with the eviction of the tenant with the assistance of the bailiff. If the tenant has left any of his belongings in the leased property and after they have been duly registered by the bailiff, the landlord has the obligation to keep them for a period of six months.

What are the rights of the tenant?

In the event that a Court Order has been served to the tenant, the tenant has the right within fifteen working days to file an appeal against it. During this time period, the tenant cannot be evicted from the property.  The grounds of opposition that the tenant has in this case can regard the procedural issues that pertain to the issuance of the order or to other issues that regard the validity of the claim itself, such as proving that essentially there were no rents due.

However, the filing of an appeal against a payment order does not suspend the execution of the Court Order. In order to do achieve this, the tenant must file for a suspension hearing and request an interim injunction. The Court will grant the suspension of the execution of the Court Order if it is considers that it will be overturned by the appeal.  In this case and upon the request of the tenant, enforcement of the Court Order shall be suspended until the court decides upon the appeal.

B. The filing of a lawsuit against the tenant

What are the rights of the landlord?

Quite often, the requirements for the filing of a Court Order are not met, for example, when the lease cannot be proven by written agreement. In these cases, the only other option left for the landlord, is to file a lawsuit against the tenant in order for a decision of the court to be issued.  Contrary to the Court Order, this procedure can be time-consuming as well as costly since it requires a hearing before the Courts. It also should be noted that the hearings of such lawsuits are usually set within a few months of the filing of the law suit and the decision of the Court can then take months to be issued.

What are the rights of the tenant?

As we mentioned above, in the case that a tenant is served with such a lawsuit, the tenant should be aware that this court procedure will require a considerable period of time for the decision to be issued. Until such decision is issued, the tenant is not required by law to abandon the leased property. In the proceedings that will take place, the tenant will be required to prove that that the lawsuit was filed on unsubstantial grounds, i.e. the rents have been duly paid.  When the decision is issued, the tenant retains the right to file an appeal against this decision which can furthermore add to the delays of this procedure.

Finally, it should also be noted that after the cancellation of the possibility to assign uncollected rents to the Greek State (in order avoid their taxation) and under certain conditions, the amounts from uncollected rents are not assumed as being taxable income for the landlord, if up until the deadline for submission of the annual income tax statement a Court Order has been issued or a claim has been filed against the tenant.

Based on the above, it can be concluded that whenever an owner of leased property is faced with a situation where a tenant delays or does not pay the rent, he could initially consider the possibility of reaching an out-of-court settlement with the tenant. In the case that this is not possible, the pros and cons of the above court procedures must be assessed in order to decide upon the most appropriate procedure to be followed.

 

Newsletter-Summer 2017

In the Summer issue of our newsletter we examine the following legal issues as well as others that are of a common interest:

  • What are the requirements in order to obtain Greek citizenship?
  • What types of divorce are there in Greece?
  • What is the process when buying property in Greece?
  • What is a Greek “silent company”?

Newsletter Summer 2017