Proposed Amendments Regarding Commercial Leases

Proposed Amendments Regarding Commercial Leases

Amendment/Addition to bill for changes in the framework of commercial leases

By an amendment submitted by the Greek Government a few days ago to the Greek Parliament, considerable changes are introduced in the legal framework governing commercial leases and Presidential Decree 34/1995 (“P.D.”) is amended accordingly.

In particular, and subject to said amendment being voted as introduced:

  • Commercial leases entered into after the bill is enacted will have a minimum  mandatory term of three (3) years instead of twelve (12), as they did until now.
  • Leases that have been or will be entered into until the date before the new Law is enacted will still have a minimum mandatory term of 12 years.
  • The P.D. provided a 4-year automatic extension of the lease if the lessor did not file an action for the recovery of the leased property within nine (9) months as of the expiration of the lease; said provision is abolished.
    In order for the lessee to be able to proceed to an early termination of the commercial lease, at least two (2) years must have lapsed from its entry into force (instead of one (1) year provided by article 17 of law 3853/2010), the termination will become effective in six (6) months (instead of three under article 17 of law 3853/2010) and the compensation payable to the lessor will be four (4) monthly rents (instead of one (1) under article 17 of law 3853/2010). Therefore, lessees who intend to proceed to an early termination according to article 43 of Presidential Decree 34/1995 on commercial leases should be aware of the foregoing serious aggravation of the conditions on which they will be able to exercise their foregoing right.
  • Compensation payable to the lessee for termination for reasons of own use are stipulated to 8 monthly rents (from 16 payable until now) and for reasons of construction to 6 monthly rents (from 12 payable until now) Following a Court judgment, monthly rents payable as compensation for own use may be increased up to 15 (from 30, as applicable until now) and those payable for reasons of construction may be increased up to 9 (from 18).

 

If you require any further information or assistance concerning the above, please contact:

Nikos Christoforidis at n.christoforidisatzeya.com