Greece: Real Estate and Construction

Navigating property transfers when debts to the Greek State prevent obtaining a tax clearance certificate presents significant challenges. This article examines the court-authorised private sale mechanism under Article 998(6) of the Greek Code of Civil Procedure, which enables property transfers while limiting the State's recovery to 25% of the purchase price, and explores how this procedure is reshaping real estate transactions in Greece.

Greek courts are increasingly ruling that real estate acquisitions at auction by REO companies affiliated with loan servicers constitute an unlawful circumvention of statutory prohibitions. Recent judgments from the Western Macedonia Court of Appeal and Athens Court of First Instance have found that these arrangements allow servicers to maintain economic control while formally separating legal entities, depriving debtors of fair settlement opportunities and enabling below-market acquisitions.

Greece's Parliament has passed sweeping amendments to the out-of-court debt workout mechanism, fundamentally altering the balance of power between debtors and servicers.