Several regions in Greece are still in the process of completing their transition from ‘old system title’ to the modern Land Registry System. What does this mean for purchasers of real estate?
In a nutshell, “old system title” of property and the organisation of depositing contracts in a public record was regulated in the 1940’s. Along with contracts, other information such as mortgages, encumbrances, liens etc were also required to be registered.
As part of the due diligence process, prior to concluding property transactions, a lawyer would conduct a title search of the property usually going back 20 years. Even then, title was not guaranteed and land could be subject to ownership claims by third parties. In some cases squatters could obtain rights of ownership after 20 years with no previous title at all, subject to certain conditions.
The new modern Land Registry system rectifies these deficiencies by objectively plotting the boundaries of the land, assigning a unique property identifier for each plot and the state guaranteeing the integrity and ownership of the plot.
This transition process from old to new system tile commenced way back in 1998 and despite pressure from the EU to complete the transition, it is still continuing. Recently another local law was passed that extended certain deadlines of completion to 31 December 2021. Some regions in Greece, (like half of Santorini island) have yet to commence the transition - this is expected to commence in June 2021.
But why is this relevant to you?
Because there are many instances where data (such as registered mortgages, encumbrances, caveats etc) have not been successfully transferred from the old title system to the Land Registry. eg if you are buying Property in Greece now the Land Registry Certificate may appear to show that the property is free from mortgages, encumbrances etc but in fact the property may be heavily mortgaged as per registration under old system title!
In fact, we have come across many cases where data has not been transferred or transferred incorrectly. One may argue that the state bears responsibility for errors and will come to your rescue but the reality is that the burden of due diligence rests with the buyer and rectification usually implies lengthy and costly court proceedings.
So when conducting your due diligence, in addition to the notarial fees and stamp duty, it is highly recommended to hire an experienced independent legal expert. The benefits far outweigh the costs, giving you the time to fully enjoy your new Greek home, hassle free.