Q&A – guide to legalizing thousands of unauthorized buildings

The two-year extension of the deadline expiring on October 8 for the regularization of unauthorized buildings, with a parallel reduction in fines and an increase in repayment installments to 80, is provided for in the new bill of the Ministry of Environment and Energy (YPE) on unauthorized buildings.

The amendments to the draft law provide, among other things, for the simplification of building procedures, the acceleration of urban planning projects, and the creation of a series of new institutions, such as the Built Environment Observatory in each regional unit and the implementation of the Building Identity, which will record the characteristics of every built surface in the country.

At the same time, with the new law, owners will no longer have to wait for the licensing process to be completed before they can start building. They will be able to start as soon as they are sure of the completeness and the required distances, by submitting the study electronically, and will automatically receive a building permit number so that they can build. See, with examples, what the new law means in practice and which cases it concerns:

What changes does the draft law on illegal buildings bring about?

More installments and significant reductions in fines for those who rush to comply with the new regulation in the first year, as well as for vulnerable and economically disadvantaged groups, but also a “freeze” on installment payments for 1-2 years for the long-term unemployed and over-indebted, is provided for in the new draft law on construction, which includes the regularization of unauthorized buildings and was submitted for public consultation until September 22 by the Ministry of Environment. Specifically, the draft law, which is the last chance to regularize unauthorized buildings, halves the fees for inclusion in the scheme, except for the high category relating to properties over 5,000 square meters, while stipulating that fines will be paid in 80 installments instead of the 60 under the existing regulation, which is valid until October 8.

What are the dimensions of the issue of illegal construction in our country?

It is estimated that out of a total of 7.5 million buildings in the country, approximately 2 million have minor or major irregularities, with 1 million of these having been subject to previous regulations. For this reason, the bill promotes the creation of a Built Environment Observatory in each Regional Unit, through which all construction will be monitored. At the same time, there are plans to create an electronic urban planning platform in each municipality, which will include city plans, implementation acts, etc. All data will be available to citizens in real time. The single special fine for those who wish to regularize their unauthorized buildings is calculated based on the area multiplied by the zone price in the area of the property according to the objective values multiplied by a coefficient of 15% and by special coefficients specified in the draft law in its annex. In the event of late payment of the monthly installment, the unpaid amount of the installment is increased by 1% for each month of delay.

To which categories of the population do the discounts apply?

Significant discounts are being introduced for specific categories of the population, along with a “freeze on installment payments for the first two years.” More specifically: – Individuals with a disability rating of 80% or higher and persons who are taxed on an individual income of up to €40,000 or a family income of up to €60,000 pay 15% of the fine. – Persons with a disability of 67% or more and persons who are taxed on an individual income of up to €18,000 or a family income of up to €24,000 pay 20% of the fine. – Repatriated expatriates pay 20% of the fine. The same applies to permanent residents of Thrace and their properties in Thrace. – Children of those falling into the previous category pay 50% of the fine. – Large families with an individual income of up to €40,000 or a family income of up to €80,000 pay 20% of the fine for their main residence. If it is their secondary residence, provided that it is no larger than 80 square meters, they pay half the fine. – Families with three children and an individual income of up to €25,000 or a family income of up to €40,000 pay 30% of the fine. – The long-term unemployed pay 30% of the fine and, at the same time, their instalments are suspended for the first two years.

What is the amount of the fines and how are they calculated now?

The new regulation favors those who rush to comply with it by reducing the fine by 20% if compliance occurs by February 8, 2017, and by 10% if it occurs between February 9, 2017, and August 8, 2017. On the other hand, for those who join between August 9, 2017, and February 8, 2018, the fine increases by 10%, and by 20% for those who declare their unauthorized construction after February 9, 2018. An increased fine will also be paid by owners of unauthorized buildings that are identified by the Built Environment Observatory without having come forward on their own. The increase will be 20% and in the case of environmentally sensitive areas it will reach 40%. A 20% discount is provided for in the case of a one-off payment of the fine and 30% in the case of payment of 10% of the fine. A 50% reduction in the fine is also provided for in cases of construction in areas of cultural heritage protection or in listed buildings, provided that the adaptation work is completed. Reductions in the fine are also provided for if the building is structurally reinforced, specifically by 30% in areas of low seismic risk, 50% in areas of seismic risk category 2, and 60% in areas of high seismicity, such as the Ionian Islands. The draft law allows for the legalization of buildings constructed before 1983 for €500 in settlements with fewer than 500 inhabitants. The fine calculation coefficient is reduced from 0.80 to 0.60 for buildings completed between 1983 and 1993, while the fine payable by owners of unauthorized buildings located in areas covered by the plan will be reduced by 40%.

What does the transfer of the coefficient of construction mean?

In order to definitively exempt them from demolition, attempts are being made to activate the possibility of transferring building coefficients, while at the same time, efforts will be made to resolve the problem of many building cooperatives, whose members had purchased plots of land at a time when construction was permitted, but which was subsequently abolished, leaving them ‘hostage’ ever since. In parallel with the activation of the Bank of Building Rights and Common Areas, an attempt will be made to save a number of common areas that are at risk of being built on, as they were expropriated without their owners being compensated, in some cases decades ago. As a result, they have taken legal action and won their cases, leading to many acts of expropriation being overturned. The new draft law on “control and protection of the built environment,” which will be open for public consultation until September 22, describes in detail the procedure to be followed for the transfer of building rights, which essentially gives owners the right to convert the coefficient that could not be used into a title, which they will be able to sell to others exclusively through the Building Rights Bank in order to build more than is permitted. The zones that will accept building coefficients will be determined by Presidential Decree, will be within the same or another municipality of the Regional Unit, and it must be certain that they can “withstand” the transfer of coefficients in terms of urban planning.

How does the building coefficient work in practice?

Essentially, the transfer of a coefficient involves removing it from a burdened property (listed building, etc.) and adding it to a beneficiary property. The process involves the use of a Transfer Coefficient title, and the local urban planning authority is responsible for approving it and issuing a building permit. As for the beneficiary property, in order for the building permit to be issued, the beneficiaries must pay an amount equal to 4% of the objective value of the added building coefficient to the Green Fund and 1% to the Built Environment Observatory. Fifty percent of the amount paid to the Green Fund is returned to the municipality where the beneficiary property is located and is used exclusively for the construction of projects to upgrade the area.

Are there examples that make the costs more understandable?

Given the specific circumstances of each case, there are a number of estimates as to the amount that the owner will be required to pay to legalize their property. Specifically, for example:

Within a plan, property with building permit, main and only residence exceeding 50 sq.m. and construction date 2005, Zone Price 1000/1150 (new-old). With the old fine, he would pay: €5,175. With the new fine, he will pay: €3,000.
Property within the town plan, with building permit, other residence, exceeding 100 sq.m., year of construction 1990, T.Z. 1300/1600: old fine: €11,520, new fine: €7,020.
Property within the city limits, with building permit, store exceeding 50 sq. m. (loft), construction date 2007, T.Z. 1650/2000: old fine: €4,500, new fine: €2,230.
Property within plan, without building permit, other residence with exceeding 70 sq.m., time of construction 1981, T.Z. 900/1000: old fine: 1,890 euros, new fine: 1,105 euros.
Property outside the plan, without building permit, main and only residence with more than 80 sq.m., time of construction 2006, T.Z. 600/600: old fine: 9,792 euros, new fine: 5,616 euros.
Property outside the plan with pending urban planning study, without building permit, other residence exceeding 120 sq.m., construction time 1998, T.Z. 600/600: old fine: €17,625, new fine: €9,330.
Property outside the plan, in an environmentally sensitive area, without a building permit, services (shop) exceeding 600 sq.m., construction time 2005, T.Z. 600/600: old fine: €110,160, new fine €116,640.

Are there penalties in cases of failure to obtain the engineer’s certification?

The bill introduces heavy fines ranging from €30,000 to €100,000 depending on the value of the unauthorized construction, and for notaries who draw up contracts, brokers who mediate, lawyers who are present at the drafting of contracts, registrars, or heads of land registry offices who transcribe them in the absence of an engineer’s certificate. Corresponding fines are also provided for engineers who have issued inaccurate certificates, while the imposition of a temporary or permanent ban on practicing their profession by the competent disciplinary bodies of the body to which they belong is also specified.

What applies to inheritance and transfers?

The provisions of the draft law make it mandatory to obtain an engineer’s certificate in order to complete any legal transaction relating to real estate, even if there is no building on it , imposing an additional cost on those concerned, without exempting even those who accept an inheritance. Specifically, Article 64 of the draft law clearly states that “in any legal transaction during one’s lifetime, including gifts mortis causa, drawn up after the publication of this law and having as its object the transfer or establishment of a real right in real estate, including real estate without buildings, a solemn declaration by the owner and an engineer’s certificate shall be attached.”

An engineer’s certificate will also be required for any sale, parental gift, declaration of acceptance of inheritance or bequest, provided that it transfers to the heir or legatee the property of the inheritance or a real right over it, including undeveloped land.

What does “Building Identity” mean and when will it come into effect?

The draft law also establishes building identification, which must be completed within the next five years for all residential buildings, within three years for public buildings, and within eight years for all other types of buildings. The building identity will be a file containing all the relevant information (approved building permit, additions, energy performance certificates, and any changes), and will now also include a structural vulnerability report on its stability. An engineer will be responsible for preparing the reports, while the files for residential buildings will have to be rechecked by an engineer every seven years. The draft law stipulates fines of up to €20,000 for false information and suspension of the engineer’s professional license, without however mentioning the cost to be borne by the owner.