What to watch for when buying property in Crete

The Cretan property market experienced a building boom in the late 1990s and early 2000s with foreign (mostly British) buyers and this attracted quite a few builders, property developers and estate agents who suddenly saw the possibility to make a quick buck at the expense of the buyers. Consequently, it is easy to find a number of horror stories (see at the bottom of this page) and shattered dreams on the internet, in the press, some British TV programmes or through the grapevine.

But let's keep it all in perspective: there have been and still are cowboys and rip-off artists but it should not be too difficult to take the necessary precautions to ensure that you get what you want at the price you expected.
Remember that Crete is a small place and bad news travel fast so anyone who gets accused of bad practices (from bad building quality through to poor customer service or plain rip offs) will not last very long at all.

Still, if you are going to part with a lot of money (not to mention the time and energy it will take to set up your house in Crete) cover yourself by following some or all of the points listed below.

Of course, for all types of properties a clean title and appropriate permits are a must and a lawyer will make sure of this. It is generally best to use an independent lawyer (as opposed to one recommended or working for the seller or estate agent

Buying existing properties

Most properties will be listed with more than one agent so it is wise to look around in order to see if it is offered at a lower price elsewhere. There is no legally fixed commission fee so estate agents can, in principle, charge what they want for the transaction.

Consider having an independent survey done on the property by a civil engineer (there are no surveyors or valuers in Crete). He will not be able to advise you formally on the value of the property but will be able to point out potential problems. Of course, if you then choose not to buy you will loose the fee paid to the surveyor. On the other hand, keep in mind that you might save money on expensive problems. You might also be able to reduce the price because of the problems that have been found (provided no other buyer who is less thorough than you decides to buy).

Get the person doing the survey to compare the existing building to what is stated on the original building permit. It is not uncommon to find discrepancies (additions or alterations that were made after the building permit was issued) and they might render you liable to fines. This is especially important if you are thinking of renting property as holiday lets as they will get inspected by EOT (Greek Tourist Organisation) in order to receive certification.

Buying a new house that is not yet built

A number of developers will sell properties that are not yet built but exist on paper only as projects As a rule, you can be assured that the right titles and permissions will have been obtained. What you need to watch here before parting with your money are the clauses of the contracts (how will payments be spread? is the building time scale stated clearly with eventual penalty clauses should completion be delayed? etc) and you might be well advised to use the services of an independent lawyer to check (and if necessary redraw) the contract.
Possibly more important is to have an idea of the build and service quality that the company you are working with provides. Do they have a reputation for employing good builders and materials? Do they keep the clients informed about the progress of their building? Have there been known problems with the company in the past? Inform yourself, ask around, get some references of former clients. TAKE YOUR TIME! I am not implying that you are entering a shark infested zone, nor am I saying that every rumour is true or dissatisfied customers always have good reasons to complain (clients can have completely unreasonable expectations) but taking a few days to check the credentials (not just the official paperwork) of the company is wise.
Also, ask to see properties that have been built before, talk to the owners. If a company feels secure in the service they are providing they will not hesitate to provide you with references.

Buying land

First and foremost you must check that all the building permits have been obtained or are obtainable (clean title, clearance of the forestry department and sometimes of the archaeological department).It is recommended that you get a document from the planning authorities stating the building regulation for the plot in question (Vevaiosi Artiotitas). This document clarifies how many m2 are allowed and if there are any restrictions
Make sure that you know what the cost of bringing in electricity and water will be. This depends on the location of the land and can be high if it is located outside the village boundaries.
If you are buying land in an undeveloped area try to find out if there are developments planned near you in the future. One sure sign would be if large tracts of land had been recently bought by a company. Also try to picture what your house will look like if the adjacent land is built on. Will you keep your view? Will it affect you in any other way?

Building your own house

There is something appealing about designing the house you want and getting it built. More choices, more control, a certain romantic. But unless you live on Crete or are prepared (and able) to travel often to check the progress of the building I would not recommend it. Things are bound to go wrong at times and need your presence and input. Can you do this when you are living out of the country? If you have an architect in Crete that you can trust 100% and with whom you are able to communicate well this is an option. Otherwise you might be far better off considering buying an existing house.

A note on property titles

Unlike more developed countries, Crete (and Greece as a whole) has not had a land registry in the past. People knew what was belonging to which family and property transactions were mainly done with a handshake. This is changing and a land registry now exists but many properties (or at least land) have not yet been entered. The process will probably take decades to complete. In such cases the property is assumed to belong to the person (or persons) occupying or using the land for the last 20 years and this is a form of title deemed valid. The only snag would be if someone turned up some years down the road with a written title. This is highly unlikely to happen (probably unheard of) but theoretically not impossible.

 

 

A few horror stories

The following is not intended to put you off, only to give you a few examples of some of the mistakes that have been done in the past. They are all easily avoidable.

  • "My friend / cousin / brother-in-law works for the town hall and will sort out the planning permission." No, he will not sort it out and even if he could (which is highly unlikely if there is anything wrong with the plot) why should he bother once the land is sold. Don't ever buy a piece of land on the strength of this statement.
  • Buying without a building permit and finding out later that you are not allowed to build.
  • Even worse, ignoring the above and building a house only to be fined or having to destroy the property (at your own cost) later.
  • Be careful when comparing prices (of the same or similar properties) between different agents: do the prices include the same taxes (such as VAT), national insurance contributions (which are payable when applying for a permit), connection to utitlies? Something that looks cheaper might be more expensive than you thought.
  • Be careful when buying into (generally new) developments with a shared freehold as you also share the responsability for any breaches in planning permission. Let's take an example: you buy a house on a plot where 3 other houses have been built. The total allowed building size is X m². This has been split into 4 times X/4 m² houses. If one of the owners decides to build an (illegal) addition to their property they render all the shareholders liable for the breach in planning permission.
  • It gets even more dangerous if you buy land with others in order to build several properties: should anyone decide to use up the surface allowed on their building you cannot build on the remainder of the land anymore.
    Please note that the above practice of buying a large plot and splitting it up in order to build several small properties instead of one large house is not unusual or illegal. In fact, it is one the best way to reduce costs on a house but there are potential problems that could come with it.
  • Buying a property in Crete without having a clue what Crete is like in other seasons. If you are thinking of living in Crete (as opposed to having a holiday home) live in Crete in rented accommodation for a little while before you decide to buy. It is simply amazing to see how many people are willing to part with large amounts of money (often their life savings) without having taken the trouble to find out if they really want to / should / can afford to live on the island.

 

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Crete photo of the day
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