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Payment of rent in good faith to a non-beneficiary after sale of the lease or inheritance

When the owner and lessor of a property proceeds with its alienation (sale or transfer), the person who acquires it is automatically and completely subrogated into the legal relationship of the lease. However, the lessee may be unaware of the alienation and continue to pay rent to the previous owner with whom they concluded the lease, even though the former is no longer the lessor and creditor of the rent payment claim. If the payment is not deemed valid, the obligation to pay rent has not been extinguished, and the burden of reclaiming the paid amounts, as well as the risk of insolvency of the original lessor, falls upon the lessee, who paid a non-entitled party. Otherwise, the corresponding burden and risk fall upon the new acquirer. Similar issues arise in the case of a real property legacy (bequest) involving a leased property, or in the case of multiple heirs where one is installed in the leased property as a specific part. Who bears the risk arising from the payment of rent to a non-entitled party, being unaware of the actual succession or legacy transfer?

The following is the full study as published in the legal journal Chronicles of Private Law

Published paper

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Reduction of remuneration for improper performance

The right to reduce consideration due to defective performance is regulated in the Greek Civil Code (GCC), or in special laws outside the GCC, fragmentedly, i.e., for specific types of contracts. The buyer in a sale, the lessee in a lease, and the employer in a contract for work have the right to reduce their consideration if the sold item, the leased property, or the work exhibits actual defects. In contrast, the GCC does not provide a general right to reduce the owed consideration for defective performance in all reciprocal contracts. Thus, for a large portion of contracts concluded on a daily basis, the creditor who receives defective performance is ultimately limited to a claim for damages, which often does not arise at all in the absence of loss. In such cases, the creditor effectively pays for a performance inferior to that agreed upon. The issue arises in a characteristic way in contracts for the provision of independent services, when the level of services provided is lower than that agreed upon, but the creditor has suffered no loss as a result. In the present study, it is proposed that the law be further developed to recognize a general right to reduce owed consideration due to defective performance for all reciprocal contracts, including contracts for the provision of independent services. This right is dispositive, independent of the debtor’s fault and of any loss suffered by the creditor. It aims to restore the equivalence of performance and consideration disturbed by defective performance and is founded by analogy both on the specifically regulated cases of reduction and on the (partial) release of the creditor from the obligation to provide consideration in cases of partial impossibility of performance.

The following is the full study as published in the legal journal Civil Law Applications

Published paper

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Article 907 of the Civil Code - Purpose and function

Article 907 of the Civil Code constitutes a "misunderstood" provision, which has been criticized as few in the civil code. Nevertheless, the analysis of its purpose and function highlights its key role in preventing transactions which are contrary to public policy in addition to the equally key provision of Article 178 of the Civil Code. Both deny the protection of the legal order in transactions which are contrary to public policy (either during the preparation, article 178 of the Civil Code, or during their reversal, article 907 of the Civil Code) and thus expose the parties to increased property risks, which tend to act as a deterrent to the conduct of said transactions. In particular, article 907 of the Civil Code makes transactions which are contrary to public policy risky for the parties involved and especially for the one who pre-delivers, as this provision prohibits the reversal of such transactions in case their purpose is not achieved.

The study is a developed version of a presentation of the same name presented by the author to the Association of Urbanists at the meeting of 24.11.2022.

It was published in the journal EfADPolD, issue 2/2023 (p. 150) and you can find it at the following link.

EFAPOLD 2023, 150 – 907 AK, concept and content

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Provision of security interest on restricted shares pursuant to Article 43 of Law 4548/2018

The present study examines the question of whether the restrictions on the transfer of shares set by the articles of association of a limited company pursuant to Article 43 of Law 4548/2018 also cover the provision of security over the shares in the form of either a pledge or a security (trust) transfer. If the answer is in the affirmative, the owner of the restricted shares may not create security over them without first complying with the conditions laid down by the articles of association for the transfer of the shares; if he does so, the security will be void.

The question is initially examined in relation to the pledge, both of the civil code and of the decree of 17.7/13.8.1923 and of Law 3301/2004, and subsequently in relation to the fiduciary (ex-insurance) transfer. The question is examined specifically with reference to the SA, but the considerations listed are basically also applied to the corresponding limitations set by the statutes of other types of limited liability companies.

The study rejects the prevailing opinion that the creation of a pledge is captured by the statute's restrictions on the transfer of shares and argues that the creation of a pledge is essentially free. It is similarly argued that a security transfer is permitted even without compliance with the terms of the articles of association of the SA, as long as the transfer is either entered in the register of the company's shareholders after the secured debt has become due and payable or has been subject to the condition that the debt will become due and payable.

To download the study (in Greek) in pdf click here.

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