The currently thriving property market in Crete is
young. A lot of builders, property developers, estate agents are jumping
on the bandwagon and it is undeniable that some of them are only
in it to make a quick buck. Consequently, it is easy to find a number
of horror stories and shattered dreams on the internet, in
the press, some British TV programmes or through the grapevine.
Let's keep it all in perspective: there have been and still are
cowboys 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. And there is a lot of competition in the Cretan
property business which forces all to offer better and more reliable
service. So things are looking up.
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. A lawyer will make sure of this. In general it
is OK to use the estate agent's lawyer because no lawyer would risk
his reputation (and job) by ripping you off.
Also see the additional note
on property titles at the bottom of this page
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 honestly, 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, 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
or a new project supervised by a good developer.
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 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. I was only pointing out the potential problems
that it could create.
- 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. Of course, you can
resell and given the current price trends you will probably not
make a loss but is it worth the time and energy?
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