A pardon of sorts for illegal home space
Athens News, 10 July 2009

A new bill tabled in parliament on July 2 is an attempt to clean up the mess of widespread housing fraud in which semi-open spaces - such as terraces, balconies and parking spaces - have been illegally enclosed to create more indoor living space.

Under the law, now in effect, transgressors may declare their unauthorised enclosures to town authorities and pay a one-off levy equal to 10 percent of the area’s objective, officially sanctioned value.

This would ostensibly ensure that the homeowner would not be forced to tear down the unlicensed wall, or pay additional fines.

Governing New Democracy says its express intention in fielding the legislation is not to legitimise the perpetual construction of illicitly enclosed spaces, but the temporary rectification of a legal quagmire in which buyers and sellers of such properties are held hostage by the prevailing semi-legality of their assets.

"The homeowners will receive a verification note from the town-planning office confirming that they have paid the amount due and that the space may continue to be used for the same purpose as before," Yiorgos Souflias, minister of environment, town planning and public works, said on July 2.

"But this document will not state that the alteration of the [formerly] semi-open space is entirely legitimate or exempt from demolition because that would mean legalisation of future transgressions," Souflias added during a press briefing.

The new legislation is, therefore, a one-off settlement for past offences rather than a permanent pre-emptive measure against the future flouting of real-estate laws.

This goes to show that the principal aim of the measure is to fill the public coffers with upwards of 2 billion euros in much needed revenue by wooing culprits to declare their crime and preserve its structural results.

However, the upshot to this situation is the widely held conviction that only the naive and faint-hearted are prone to abide by the law, while the rest are free to thrive in the country’s burgeoning black economy.

Some legal experts, including the chairman of the Greek Notary Publics' Union, Kostas Vlachakis, have argued that precisely because the new law is akin to selective and temporary semi-legitimisation, the rationale of the measure should be dismissed by the courts as unconstitutional. The new law could be challenged, for the same reason, at the Council of State, the country’s highest administrative court.

Not so, Souflias said in a clarifying statement on July 7.

"The Council of State deals with administrative actions of the state against the citizens," the minister said. "This has nothing to do with the new legislation."

Previous governments, vying for fiscal revenue, have effectively allowed hundreds of thousands of unlicensed buildings (called afthaireta - which literally means arbitrary, but in practical terms means illegal) to dodge the law through successive redrawing of town limits.

The same can of worms may now be opening for the countless houses and apartment blocks with illegally enclosed spaces.

As it may turn out, more people may be willing to take their chances with the law than actually abide by it. According to the president of the Panhellenic Homeowners' Association, Stratos Paradias, this suggests that the revenue the government hopes to generate from the quasi-legalised, enclosed spaces by the end of 2010 may fall well short of expectations.

An obvious solution would be to explicitly incorporate semi-open spaces into the official building coefficient for new housing plans so as to eliminate the financial incentive to have them enclosed illegally. But this would require a drastic revision of real-estate legislation which no affected interest group would be willing to accept.

The practice of shutting off areas originally designated in a licensed housing plan as "semi-open space" is no less illegal and environmentally hazardous than building a house on territory officially uncharted for housing.

For an estimated 1.5 million Greek homeowners who have resorted to this blatant breach of building regulations, the gain of an additional 10 to 14m2 of indoor floor space must be weighed against the risk of being caught by housing inspectors, or reported to the authorities by an envious neighbour or another flat owner in the same apartment block.

In case of capture, the homeowner who flouted the law would have to pay heavy fines and arrears of public utility charges as well as to tear down the illicit extra wall or window panel that enclosed the formerly semi-open area indoors.

The new law in a nutshell

• All new applications for a building licence must ensure that semi-open spaces do not exceed 15 percent of the official building coefficient - which limits the size of the building, based on the size of the plot - for the location of the house; are evenly distributed on each floor; and their dimensions should be at least 2.5m in width and smaller or equal to 1.80m in depth.

• It is allowed to continue using an indoor space which includes transformed semi-open areas built before 2 July 2009 if an application is submitted to the local town-planning office, and the prescribed levy is fully paid by the applicant. The levy should equal 10 percent of the objective value of the enclosed space. The full amount is payable, either in full or three equal instalments, by the end of 2010.

• All enclosed car parks above ground level are incorporated into the corresponding building coefficient. Open car parks with roofing above ground level are not incorporated into the building coefficient. Basement ceilings are not permitted exceed a height of 0.80m above ground level.

• Eligible for settlement under the above terms are all above-ground and underground closed spaces whose actual use has arbitrarily changed, if this change of use is not forbidden in the region where the building is located.

Some questions and answers

Does paying the levy on semi-open spaces bar third parties from suing the owner?
This is true of vindictive neighbours. But a co-owner of a different flat in the same apartment block may still file a lawsuit to render illegal any change of use in the property of the whole building. In this case, the plaintiff can also request that the court orders the immediate demolition of the illegal structure even if the accused homeowner has paid the builder for it.

Can the ministry of environment, town planning and public works carry out inspections on such a scale as to effectively enforce the new law?
While the ministry is warning homeowners of door-to-door inspections starting in the autumn, thousands of civil engineers will have to be hired by the ministry to carry out the inspections. This is highly unlikely. On the other hand, the Greek Technical Chamber has calculated the annual cost of effective inspections to enforce all real-estate regulations at around 18 million euros. This means that a decade of strict legality in the real-estate market would cost the equivalent of one-tenth of the revenue which the government expects to take in from the settlement of illegally enclosed spaces by 2010.

How is the environment affected by the new law?
Building coefficients are there to protect the environment as well as the landscape of a region from a forest of huge boxes made of glass and cement. In practice, the new law effectively legalises the 20 percent increase of the building coefficient in a given area.