SUBLET OF REAL ESTATE IN GREECE: COMMON LEGAL RISKS
- Jun 19
- 3 min read
Subletting of Real Estate in Greece is a widespread practice, especially in the commercial and tourist rental sector. In a sublease, the tenant transfers the property or a part thereof to a third party without being the owner. Although such practice may be economically beneficial, subletting involves significant legal risks, particularly where the terms of the law and the main lease agreement are not complied with.
1. Prohibition of Subletting Under the Lease Agreement
One of the most common risks is an express prohibition of subletting in the lease agreement. In such cases, any subletting without the consent of the landlord (property owner) is deemed unlawful.
Example: A tenant of commercial premises subleases part of the space to a third company, despite a clear contractual prohibition of subletting. The landlord is entitled to terminate the agreement and seek eviction of both the tenant and the subtenant.
2. Subletting for a Period Exceeding the Term of the Main Lease
A legal risk also arises where the tenant agrees with a subtenant on a sublease term exceeding the term of the main lease with the property owner.
In such case, the sublease cannot have legal effect beyond the term of the main lease. Upon expiration or termination of the main lease, the sublease is automatically terminated, even if a longer term was agreed.
Example: A tenant leases commercial premises for three (3) years and subleases them to a third party for five (5) years. Upon expiry of the three-year main lease, the subtenant must vacate the premises, despite the five-year agreement, and may only seek compensation from the tenant.
3. Liability of the Original Tenant Towards the Landlord
Even where subletting is permitted, the original tenant remains fully liable to the landlord for payment of rent and for the use of the property in accordance with the terms of the main lease.
4. Risk of Termination of the Main Lease
Termination or expiration of the main lease automatically results in termination of the sublease agreement.
Example: In case of termination of the lease due to rent arrears by the tenant, the subtenant is obliged to vacate the premises and has no right to claim against the property owner.
5. Absence of a Written Sublease Agreement
The absence of a written sublease agreement is one of the most serious practical and legal risks in Greece. Where subletting is conducted orally or informally, it creates significant uncertainty regarding key terms of the arrangement and greatly increases the risk of disputes and litigation.
In particular, without a written agreement it is impossible to clearly determine the exact duration of the sublease and the conditions for its termination or renewal, the amount of rent, the method and timing of payment, obligations regarding maintenance and repairs, permitted use of the property by the subtenant, and any penalties or compensation claims in case of breach.
Subletting may be a useful tool for efficient use of leased property, but it requires particular caution. Careful review of the lease agreement, compliance with legal procedures, and written documentation of terms are necessary measures to avoid serious legal risks. Consultation with a lawyer before concluding any agreement will help prevent future disputes and financial losses.
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