A regulatory framework for apartments in residential buildings used for short-term rentals through platforms such as Airbnb is being prepared for the first time by the Ministry of Justice, alongside provisions designed to facilitate property development deals when there are multiple co-owners, as well as the division of properties held in undivided co-ownership.

The basic principle of the legislation currently being drafted is that “51% of the apartment building decides,” as the responsible ministers, Giorgos Floridis and Ioannis Bougas, believe that a minority should not be able to block the wishes of the majority.

The legislation is being drafted by a 13-member committee of highly regarded legal experts that is already meeting, with the aim of codifying the 1,030 pieces of legislation that have governed property ownership in Greece in relation to condominium ownership for nearly a century.

At the same time, the committee will address issues that did not exist 97 years ago, when co-ownership was first legislated in Greece. The ministry’s goal is for the bill to be passed in early 2027.

Short-term rentals

With regard to short-term rentals, in Greece’s major cities, the overwhelming majority of properties rented in this way are apartments in residential buildings. In Athens, for example, out of 16,500 active listings, more than 95% are such apartments. The same percentage is recorded in Thessaloniki, while it falls to 80%–85% in other regional cities.

Disputes between owners who do not rent their apartments on a short-term basis and those who do are numerous, and some have ended up in court, where decisions have generally favored owner-occupiers.

Some members of the committee believe that if a building’s regulations do not explicitly permit short-term rentals, they should be prohibited. However, such a rule would inevitably raise the question of how an owner could make productive use of their property.

As a notary told Proto Thema, an owner of a renovated 80-square-meter apartment in Kallithea might earn €700 per month through a long-term lease, but could earn as much as €2,300–€2,500 through a short-term rental.

Under the government’s plans, short-term rentals in apartment buildings would be permitted only if at least 51% of the total ownership interests approve them.

Government officials note, however, that additional restrictions and regulations will also apply. Similar restrictions are already in force in parts of central Athens and Thessaloniki, which are considered saturated in terms of short-term rentals.

Officials stress, however, that there cannot be a blanket ban, as this could raise questions concerning the economic freedom of property owners who rent their properties in this way. It is also worth noting that last year, Airbnb-style rentals generated nearly €1 billion in revenue for the state.

Market experts estimate that, particularly in central Athens, 50%–60% of apartments offered for short-term rental are controlled by large property-management companies operating between 10 and 100 such apartments. At least 500 buildings have reportedly been purchased, in some cases entirely, by such entities, which are seeking in this way to overcome opposition from owner-occupiers.

Property development deals

Although last year’s Council of State ruling that overturned the bonuses provided under the new Building Code reduced the scale of property development deals, such arrangements remain common and continue to create problems when the property being considered by a developer has multiple co-owners.

Under current law, owners must secure 65% approval at their general meeting for a development deal to proceed. This is not always easy, particularly when there are many co-owners, meaning those opposed can block the project or even pressure the majority for a larger share of the proceeds.

Under the reform of co-ownership legislation, the 51% rule will also apply to property development deals, in an effort to prevent such situations.

Undivided co-ownership

Having multiple co-owners with undivided interests in a property is extremely common in Greece. The procedure for resolving such ownership arrangements so that properties can be used or sold is extremely time-consuming and expensive.

As a result, there are buildings—even in central Athens and Thessaloniki—that are left to deteriorate.

Under current law, people involved in such inheritance-related cases can file a partition lawsuit, asking the court to determine the specific share of the property belonging to each heir according to their ownership percentage, after which the property can be auctioned and each party can receive the share to which they are entitled.

However, these cases require a lengthy court process.

In the immediate future, a system of judicial mediation is expected to be introduced for such cases, with the aim of reducing both the time required and legal costs. In each case, the judicial mediator will invite the interested parties and explore whether they can reach an agreement, potentially involving the purchase of one party’s share by another, before a partition lawsuit is filed.

Building fees and repairs

The committee’s work to codify real-estate legislation is also expected to address everyday problems in apartment buildings.

A special procedure will be introduced for the collection of common building expenses, including the possibility of obtaining a payment order. The creation of a reserve fund will also become mandatory, as will insurance coverage for the apartment building.

There will be special expedited procedures for collecting unpaid common expenses from owners or tenants who fail to pay them. Building managers—whether they are individual owners or professional property-management companies—will have greater powers, but also greater responsibilities.

At the same time, necessary repairs and energy-efficiency upgrades to buildings that are currently blocked by a lack of quorum or the voting thresholds required at residents’ meetings will be made easier to carry out.

Under the current rules, a 65% majority is required for issues involving repairs, maintenance or energy upgrades to proceed. In these cases, the 51% rule will apply instead, preventing owners who do not wish to contribute to the maintenance of the building from creating artificial obstacles.

Dividing individual floor apartments

One of the significant new provisions expected to be introduced will allow, regardless of whether the building’s regulations prohibit it, the division or merging of apartments within residential buildings (horizontal properties).

The aim is to make large apartments more usable and help address housing shortages in major cities.

For example, a 250-square-meter floor apartment could potentially be divided into two 125-square-meter apartments.

The owner of such a large apartment would therefore be able to divide it into two units, use one as their own residence, and rent out or sell the other—something that is not currently permitted.

Photos: EUROKINISSI