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Τhe real estate agency contract, according to recent Law 4072/2012

Iason Skouzos - TaxLaw > Practice Areas  > Real Estate  > Τhe real estate agency contract, according to recent Law 4072/2012

Τhe real estate agency contract, according to recent Law 4072/2012

In Greece, the real estate agency contract is governed by the combined provisions of Articles 703-707 of the Civil Code, and the provisions of recent Law 4072/2012, which came into as of its publication in the Government Gazette, on 11.04.2012 (Volume A ’86/2012).

A real estate agent is defined by article 197 of Law 4072/2012 as the person or the legal entity who provides real estate agency services. Real estate agency service is the suggestion of an opportunity or the mediation for contracts relating to property and especially for contracts of sale, exchange, lease, leasing, establishment of easements etc.

The conditions for the vocational practice of a real estate agent are provided in Article 198:

a) to be a Greek citizen or a citizen of a member state of the European Union (EU) or a member state of the European Economic Area (EEA). The citizen of a third country is required to have a residence permit and work permit in Greece or residence permit for independent economic activity, according to the provisions of L.3386/2005.

b) not to have been convicted of a felony or misdemeanor for the offenses of theft, embezzlement, fraud, embezzlement in office, forgery, infidelity, perjury, fraudulent bankruptcy, fraudulent lenders, usury, of issuing bounced checks or for any of the crimes on the currency.

c) not to have been submitted to total or partial, custodial guardianship or curatorship under Articles 1666-1688 of the Greek Civil Code.

d ) to have a high school certificate or of a Greek or an equivalent foreign high school.

As far as corporations are concerned, the above conditions that must be fulfilled at least by one person who is their legal representative. In addition, the law provides that in order for a corporation to provide real estate services, this must be included in its statutory scope of activities. If the corporation operates various branches, the conditions of article 198 above must be fulfilled by the director of each branch.

Estate agents who operate officially in another Member State of the EU or a Member State of the EEA, who wish to operate in Greece through a branch, agency or other type of establishment must produce a certificate issued by the registry or other competent authority of the country where they operate.

The new law also provides that the real estate agency contract must be drawn up in writing. The exchange of signed letters and faxes, as well as e-mails between the parties is sufficient for the fulfillment of this condition.

The contract must include the personal/company data of the contracting parties , the subject matter of the transaction , as well as the amount or percentage of the real estate agent’s fee. The latter is freely negotiable and is not subject to statutory minimum. The contract must also mention whether the real estate agent may act for both contracting parties in the transaction, e.g. the buyer and the seller. If, despite the relative lack of such reference, the real estate contracts also with the other party, then the client is entitled to seek the reduction of the agreed fee or to demand the return of the already paid fee.

As far as the duration of the real estate contract is concerned, the law stipulates that, unless designated otherwise by the parties, it is 12-months, with a unilateral right of the principal to a 6 month extension. If the duration of the contract is longer than the above definition, any of the parties may terminate the contract without any penalty, after the completion of one (1) year, but the results of the termination come into effect after ​​three (3) months.

The law also regulates the exclusive real estate agency contract, in which the principal does not have the right to instruct another real estate agent for the same transaction, nor to act in his own account, for as long as the exclusive contract is valid. The exclusive agency contract may not be longer than 8 months, with an option of the principal to extend it for 4 months. If the real estate transaction takes place during the exclusive real estate agency’s contractual agreement, it is legally presumed that the contract has been concluded because of the mediation of the exclusive real estate agent. If the real estate transaction is concluded within 3 months from the end of the exclusive real estate agency’s agreement and, in the meantime, the principal appointed another real estate agent, then the exclusive real estate agent’s fee is due only if it is proved that the conclusion of the contract is a result of his efforts.

Regarding the protection of the real estate agent for the services provided, the law provides that the principal is obliged to notify the real estate agent for the drafting of the main contract at least one (1) day before signature, otherwise he may be liable to compensate the real estate agent for any damage that has been caused, due to the delayed announcement.

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