Real Estate Blog

Proving the building capacity of your plot - Try a compromise agreement before court

18 Mar 2020

Legal, by Broosco Team

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Selling your plot often stumbles upon the question of its integrity and build-ability when of course the main urban rule defining a plot's building capacity (basically 4000 s.m. surface plus other parameters) cannot be applied.So, before putting your property up for sale, it would be wise to consult your engineer and your attorney who will lead you to the safest and most effective way to prove the build-ability of your plot.

The local urban planning service is the competent authority that will firstly indicate to your engineer the way of dealing with this issue and in particular with regard to the urban planning service of the Municipality of Chania, Crete, the document that is generally suggested by them in order to ensure the construct-ability of a plot, in case the time of its creation as derives from the property deeds doesn't comply with the urban legislation, is a compromise agreement signed before court.

To be more specific, a compromise or settlement agreement is a document signed before court by the property owner and a third person (usually a neighbour or a relative) contesting the owner's property rights but finally recognising his ownership on the plot, therefore its a mutual agreement confirmed by court, equal to a court decision.

The settlement agreement which is brought before court is accompanied by an updated topographic plan, includes a thorough description of the property in question and necessarily defines the time of the creation of the property, insisting on the argument that it exists as it is since the time of its creation (surface, location, orientation, non-forest character, boundaries etc.).

In practical terms it's a court decision equal to a property deed, since it identifies a person as the owner of a property, proving the time of the creation of this property and the fact that it hasn't changed since then.

The process leading to a settlement agreement requires:

  • your lawyer's and engineer's advice
  • the elaboration of a topographic survey
  • drafting the compromise agreement
  • signing the compromise agreement before the competent local court, presenting the topographical plan, the property tax certificate of the last five years and the tax document proving the tax estimation of the property
  • submitting a tax return at Chania tax office accompanied by an official copy of the settlement agreement and paying the relevant tax (3.09% on the tax value of the property)
  • registration of the settlement agreement at the competent land registry office.

Summarising, the compromise agreement is a legal acknowledgement of your ownership on your land, assisting you to prove the time of its creation and to ensure its building capacity. Before attempting this, however, since the urban planning office in Chania, generally asks for specific certificates and official copies from the land registry books kept in the relevant land registry offices, it's better your attorney carries out a thorough land registry search before drafting the compromise document, so that its content is not incompatible with the information kept in the land registry archives.

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