When considering foreign investment, people should completely avoid Greek property investments unless they have a lawyer recommended by another foreign buyer. Every summer hundreds of foreigners travel to Greece to take advantage of property investment opportunities only to experience a corrupt system that allows conmen to thrive. According to widespread reports, foreigners are literally exposed to gangs of lawyers, civil engineers, and local government officials who collude to rip off investors through extortion, price fixing, and dynamic pricing. The government cannot help because corruption is rife there so it will not protect human rights or enforce professional ethics. It is not surprising that Greece is the only European country that failed to recover from the recession of 2009.
New leaders will likely fail to bring change:
The country has a new prime minister Kyriakos Mitsotakis. Euromaniacs would love to see this as a rejection of populism – but Mitsotakis will certainly fail to bring Greece into the 1st world. 3rd. World practices such as smoking in public, inequality between men and women – and a general lack of ethics in business, represents the order of the day. Ironically, in the only European country where military service is mandatory for men alone – the island of Corfu, a mafia hotbed, celebrates the first-ever female mayor, Meropi Ydraiou. These leaders will need to do much more than to deliver change: they would need to change a culture itself. Greeks generally see their right to smoke as their culture.
Reports say Corfu and Mykonos islands’ lawyers and civil engineers are the worst but Athens is slightly better. Potential investors are asked to pay extra legal and building fees that were not agreed before. One foreigner was asked to pay a deposit of 2,000 euros to a foreign bank and refused and the real estate agent disappeared. Later the buyer discovered that the amount was actually the agent’s commission had the sale gone through. He also found that the agent did not belong to any professional body! Another buyer paid a 10% deposit and was hit with an extra 8,000 euros in taxes owed by the seller which he was told to pay or otherwise wait for some months. On refusing he was told to leave the lawyer’s office – a “third generation family law practice” in Corfu without a refund.
One buyer who was charged extra reported, “The moment I queried the additional sneak charges, they wanted to walk away with me losing everything I paid up to that point – so clearly the only language they understand is that of duress and extortion”.
White-collar Crimes and Corruption Built into the System
The lawyers, civil engineers and building inspectors in Corfu and Mykonos are all close friends who operate as packs. Then there is the price fixing by civil engineering firms, construction companies, notaries and lawyers. Apparently, Corfu is plagued with mafia-style construction management in which extortion is commonplace. Foreign property buyers fall pray to all these practices and there is no recourse.
One British national said recently, “Once I paid my deposit, people changed from being sweet to showing their teeth: first the lawyer attempted to rinse with an additional nine thousand euros in newly discovered fees, then later, after paying the civil engineer his deposit, he changed his tune that the house that he thought was in a fantastic condition, was actually not maintained for years and abruptly changed the prices and scope of the project. When I questioned the engineer, he said that they can simply pack up and leave.
They caused severe damage to the property, but wanted total impunity without claiming responsibility for any losses we suffered as a result of their misconduct. The worse feeling in the world is when you realize that both lawyers and civil engineers – the very people who are supposed to look out for your interest, do exactly the opposite. They are causing irreversible damage to the reputation of their country, thinking that they can continue getting away with sneaky, unethical behaviour”.
Buyers from China, Germany and Israel are also furious at the total lack of ethics shown by the Greek legal and property professionals. An Israeli investor who had an unpleasant experience said,
“I refused an extortionate quote to paint my house and did it myself. The construction company owners who littered the entire hill with illegal buildings, sent their friend from the local planning department to come and harass me for working without a building license. Did that person also visit them when they constructed huge mansions illegally on the hill? This is shameful behaviour that one would never expect in Europe these days.”
Even foreign governments have fallen prey to the extortion trap, indicating that the Greek government is also corrupt. For example, the Chinese government’s Costco trusted Greece with 600 million euros in investment and they are now facing huge losses after the terms were suddenly changed.
Tax Avoidance is Common
The lawyers and civil engineers ask for payment in cash only and do not issue receipts, an obvious effort to avoid declaring income and paying taxes. Many foreign buyers find this practice weird and unacceptable. Here is what one buyer said about this,
“They are not so smart: by writing specifically how much they want each time in an email, sending statements of what was paid by email, Facebook and SMS – and then saying they will walk away without contractual responsibility as the dealings occurred without VAT receipts. These people are seriously harming the economy of Greece – and seriously harming the reputation of Greece as a destination for investment… If a lawyer or civil engineering firm does not have AT LEAST 10 positive reviews on Google maps, from verifiable foreigners – forget it. Don’t touch them”.
The Property Market Faces Oversupply
A huge number of foreclosures are about to hit the market. Banks at one time wanted to sell distressed properties but corrupt notary associations refused to be involved. At another time Europe asked Greece to get rid of toxic loans and the Greek government pledged to do so but the notaries in the Ionian islands boycotted the pledge. Now all those properties will be listed to create an oversupply of properties in a nation that has an aging and declining population. When foreigners stay away from that market, when the population of a country despises migrants, then, realistically – who is going to buy these properties?
Foreign property investors should avoid Greece like the plague. Greece is still in recession and that is a good enough reason to avoid it. Also, foreigners cannot trust a market that is infested with corrupt legal and property professionals, corrupt citizens, and corrupt government officials. With an aging and declining population who is going to rent or buy the oversupply of properties? Investing in Greece is a recipe for disaster.