automatically to the owner of the land. The holder of the hereditary building right is entitled to compensation.

Greece

A can grant B a lease of the property (Civil Code, arts. 574 ff.). Greek law draws a distinction between ordinary leases and leases of agricultural land or other fruit-bearing property. Unless otherwise regulated, the provisions on ordinary leases apply mutatis mutandis to agricultural leases (Civil Code, art. 620). As stipulated in the Law on Residential Leases (1703/1987 art. 1, § 3), the lease of residential property is regulated by the terms of the contract and the ordinary provisions on the lease of property (Civil Code, arts. 574–618), unless otherwise provided in the Law on Residential Leases. An ordinary lease is a contract by which the landlord undertakes to provide the tenant with the use of a property against payment of the agreed rent. A lease concluded for a fixed term terminates upon the expiration of such term without any formality. If the property is leased as a primary residence, the term of the lease cannot be fewer than three years. An agreement shortening the said term can be entered into only after at least six months have elapsed from the beginning of the contract and the agreement must be notarially executed (Law on Residential Leases 1703/1987 art. 2, § 1, as replaced by Law 2235/1994 art. 1, § 5). A lease for an indefinite period of time requires notice on the part of either of the parties to bring it to an end (Civil Code, art. 608). A lease concluded for a period of more than thirty years or for the lifetime of the landlord or the tenant is also terminable by notice of either party after the lapse of thirty years (Civil Code, art. 610). Where a residence is leased as a family home with the knowledge of the landlord, the landlord is not allowed to terminate the lease without notifying the spouse of the tenant on the same terms as required for the tenant (Civil Code, art. 612A).

Writing is not strictly required for the constitution of the lease.86 However, a lease of immovable property for a period of more than nine years must be notarially executed and transcribed in the Mortgage Register for the lease to be effective against third parties (Civil Code, arts. 618 and 1208).87 The vast majority of residential leases are based on standard form contracts prepared by homeowners’

86Filios, Obligations, p. 197; AP 1331/1976; NoV (1977), p. 931.

87Filios, Obligations, pp. 271–2.

associations. The aim of these contracts is to deviate as far as legally permissible from the rules of the Civil Code favouring tenants. Lease contracts are also drafted in writing to facilitate proof and for tax purposes since Greek tax legislation requires the presentation and deposit of a copy of the lease contract to the relevant tax authorities.

The Greek Civil Code distinguishes between two kinds of agricultural leases depending on whether the agreed rent is payable in money (Civil Code, arts. 619–40) or in natura, which is a share in the produce of the farm (Civil Code, arts. 641–7). In the first instance, the lease must be for a minimum of four years (Civil Code, arts. 619 ff.). If the lease is concluded for a shorter term, it will nevertheless remain valid for four years (Civil Code, art. 634). In the second instance, the crop-sharing contract allows the tenant to exploit the land against payment of a share of the produce. If not specified in the contract, the share is determined in accordance with local custom (Civil Code, art. 641). If such a lease has been concluded for the lifetime of the tenant-farmer or for a term exceeding ten years, the tenant-farmer shall have the right, after the lapse of ten years, to terminate the lease at the end of the harvest period after giving one year’s notice. Any agreement to the contrary is not valid (Civil Code, art. 646).

A can grant B a usufruct (Επικαρπία, Epikarpia) over the property/farm (Civil Code, arts. 1142 ff.). Usufruct is a personal servitude which allows the holder to use and enjoy the fruits of the property of another without impairing the substance thereof. The contract creating a usufruct over immovable property must be executed in a notarial deed and must be transcribed in the conveyance records (as opposed to the mortgage records) in the Land Register (Civil Code, arts. 1143, 1033 and 1192).88 The usufruct is extinguished with the death of the usufructuary or after a shorter term if so agreed. The usufruct constituted for the benefit of a legal entity is extinguished when that entity is dissolved (Civil Code, art. 1167).

A can grant B the personal servitude of habitation (Οίκηση, Oikissi) whereby the holder obtains the real and exclusive right to reside in a building belonging to another or to use a part thereof as a residence (Civil Code, arts. 1183 ff.) together with his/her family and the domestic personnel which corresponds to his/her social position (Civil Code, art. 1184). The right of habitation expires upon the death of the beneficiary (Civil Code, art. 1185). The general provisions governing the usufruct of

88The Greek legal system provides for the publicity of real rights on immovables. Thus conveyance records, mortgage records, books of claims and attachments are all kept, in the Conveyance and Mortgage Registers (art. 1 of Legislative Decree 4201/1961).

immovables apply by analogy to habitation, in so far as they are compatible with the nature of habitation (Civil Code, art. 1187).

The usufruct and the right of habitation are often established in the context of inter vivos transactions between elderly people and their children in order to avoid or reduce inheritance tax. Under such an arrangement, the parents would convey their property to their children and would in return be granted a usufruct or a right of habitation over the property.

A can grant B a limited personal servitude with regard to a residence or a farm. Such servitude would grant the holder the right to use the property in a certain way (Civil Code, art. 1188). As the content of the servitude can also be the content of a praedial servitude (Civil Code, art. 1188, para. 2), A can, for instance, grant B the right to use a certain road on the farm, to water and to let his/her cattle graze, or to cut wood on his/her farm (Civil Code, art. 1188, para. 2 in combination with Civil Code, art. 1120). In case of doubt, the extent of the limited personal servitude will be determined with regard to the personal needs of the holder (Civil Code, art. 1189).89

With the exception of L 3741/1929, which remains in force after the introduction of the Civil Code and which recognises exclusive ownership in an apartment or a floor, and co-ownership in all common parts of a block of flats, and LD 1024/1971, which recognises exclusive ownership in one or more individual buildings (or part thereof) built on common property, and co-ownership in all common parts, there is no mechanism in Greek Law similar to superÞcies because of the general rule that the landowner owns all component parts of the land, including particular structures and buildings that are permanently attached to the land (Civil Code, arts. 953 and 954).90

89The holder may be considered to be entitled to construct a building on the land encumbered with a usufruct, provided that the present economic purpose of the property is preserved (Civil Code, art. 1148). In such a case the ownership of the building is regulated by Civil Code, art. 955, § 1, sent. 2 (read with Civil Code, art. 953 e contrario), which provides that buildings and other structures erected on the ground by the holder of a real right are susceptible to real rights separate from those on the land (Karasis, in Georgiades and Stathopoulos, GCC, Collective Analysis, art. 1148, no. 10 (86); Dimakou, in Georgiades and Stathopoulos, GCC, Collective Analysis, art. 955, nos. 26 ff. (65–6)).

90The only exception to this rule is the one introduced by Civil Code, art. 955, which expressly provides that things attached to the ground for temporary purposes, though firmly fixed, as well as buildings constructed by a holder of a real right (e.g., a usufructuary), do not become component parts insusceptible of separate real rights.

A can grant B a loan for use (Χρησιδάνειο, Chrissidaneio) of the property (Civil Code, arts. 810 ff.). Loan for use is a gratuitous contract whereby a person hands over property to another for his/her use, subject to an obligation on the part of the holder to return the property when the contract expires. Writing is not required,91 but delivery of the property is essential for the completion of a loan for use. A loan for use may be for a definite term. However, if no term has been fixed, the borrower must return the property after having used it, or when the time period in which he/she could have made use of the property has passed (Civil Code, art. 816). The position of the holder is very precarious as the lender may, where the lender himself/herself is in urgent and unforeseen need of the property, where the holder uses the property in a manner contrary to the contractual conditions, where the holder causes the property to deteriorate, or where the holder has unlawfully given the use of the property to another, reclaim the property even before it is due (Civil Code, art. 817).

Hungary

Hungarian law recognises time-limited rights in land that are in rem and in personam. The time-limited rights in rem are usufruct (haszone«lvezet) and the right of use (haszna«lat), which are regulated by the Hungarian Civil Code (Civil Code, §§ 157–65). The time-limited rights in personam are leases in general and loans for use (haszonko¬lcso¬n). Leases include residential leases (laka«sbe«rlet), which are partly governed by special legislation (Law on the Lease of Flats and Non-residential Premises and on Certain Provisions Relating to their Alienation, hereafter Law on Residential Lease) and income-producing leases (leases for profit, haszonbe«rlet), which in turn include leases of agricultural property (termoýfo¬ld haszonbe«rlete), which are also governed by special legislation (Law on Lease of Agricultural Land).

The Hungarian Civil Code (Civil Code, §§ 423–33) contains provisions concerning the lease of residential and non-residential premises (laka«s- be«rlet) in general, which is further mainly regulated in special legislation (Civil Code, § 434; Law on Residential Lease). It also contains provisions concerning the income-producing lease (lease for profit) (Civil Code,

91Filios, Obligations, p. 358; AP 672/2008; EllDni (2006), p. 1096; AP 463/2004; EllDni (2004), p. 1686; AP 170/2003; EllDni (2003), p. 137; Athens Court of Appeal, 10753/1991, no. V 1992, 574.

§§452–61), the differentia speciÞca of which relates to income-producing property, including agricultural land, which in turn is governed by a special law (Law on Lease of Agricultural Land).

Under an ordinary contract of lease, the landlord is obliged to transfer the use of the property to the tenant on a temporary basis in return for the payment of rent. The landlord warrants that the object of the lease will be suitable for the use stipulated in the contract for the period stipulated therein, and that no third person has rights related to the property that could disturb or exclude the tenant’s use (Civil Code,

§§423–4).

The tenant must use the property in a proper manner and in accordance with the provisions of the contract and is liable for loss caused by improper use (Civil Code, § 425(1)). The tenant usually must pay a deposit in advance and the rent on a regular basis. If the tenant fails to pay the rent, the landlord may terminate the contract with immediate effect, provided there was a written demand for the payment of rent which contains a warning in regard to the consequences of the failure to pay and which affords the tenant an appropriate period of grace. Rent cannot, however, be claimed for the period during which the tenant could not use the property due to a cause beyond his/her control.

The lease terminates upon expiry of the term stipulated, upon the emergence of circumstances provided for in the contract or if the leased property is destroyed (Civil Code, § 430). A lease for a fixed term cannot be terminated early unless there is a material breach of contract by the tenant.92 The lease for an indefinite period of time93 can be terminated with fifteen days’ notice. However, in the case of a residential lease, the landlord cannot terminate the contract with less than three months’ notice,94 while the tenant may terminate the contract with fifteen days’ notice at the end of the month (Law on Residential Lease, § 26). The law accords greater protection to the tenant of residential property owned by the state and regional government bodies.95

92The landlord can terminate the contract with immediate effect where the tenant uses the property in an improper manner or contrary to the stipulations of the contract or if the tenant does not pay the rent despite a request by the owner with the attendant grace period (Civil Code, §§ 425(2)(c)) and 428(2)).

93A lease for a fixed term converts into a lease for an indefinite time if after the expiry of the fixed term the tenant keeps on using the object of the lease without objection by the owner within fifteen days (Civil Code, § 431(2)).

94Law on Residential Lease, § 26(5).

95Until privatising the majority of these flats, it was a well-settled practice to ‘sell’ these ‘rights of lease’ as if they were rights in rem as the tenants were afforded protection

After the termination of the lease, the tenant must return the property to the landlord. In the case of land, the tenant is not allowed to retain possession of the property for claims against the landlord arising from the lease. In case of unlawful retention, the tenant is liable for all loss resulting from the retention. The tenant can remove, at his/her own cost and without impairing the property, improvements erected on the property (Civil Code, § 432(2)–(4)).

The leases of income-producing property and agricultural property (farmland) are treated as special types of leases. Under an incomeproducing lease, the tenant is entitled to use the property and collect its fruits for a period of time, in return for payment of rent which may be in cash or in kind. The general rules on lease apply to issues not governed by the provisions of the Civil Code on income-producing leases. Special legislation, which contains additional rules and provisions that derogate from the general rules concerning lease, applies to a lease of agricultural land (Law on Lease of Agricultural Land). There are, in principle, no formal requirements for the constitution of an income-producing lease (lease for profit). However, a lease of agricultural land must be reduced to writing.

The tenant can only use the property and collect its fruits according to the rules of normal management of the property. The tenant of agricultural property must cultivate the property in a proper manner and take care to maintain its productivity.

The rent is to be paid periodically or at the end of the term of the lease. If, in a given year, the property yields less than two-thirds of the average harvest, the tenant can claim an equitable reduction or waiver of the rent. The landlord must be notified of the claim prior to the gathering of the harvest. Reduction of the rent or its waiver cannot be claimed for previous years. The landlord has a lien on the fruits of the property and on the tenant’s assets brought onto the property for outstanding rent.

An income-producing lease established for a fixed term can only be terminated in extraordinary circumstances that justify termination

resembling the status of an owner. If the owner of the residential property is the state or local government, the landlord can only terminate the contract on the basis of the grounds specified by the Law on Residential Lease where (a) the tenant does not pay the rent despite the grace period granted by the landlord, (b) he/she does not perform any other significant obligations undertaken in the contract, (c) the tenant or his/her cohabitant does not obey the norms of peaceful coexistence or they behave disgracefully, (d) the tenant or his/her cohabitant impairs or use improperly the common premises, or (e) the landlord offers a substitute flat, in exchange for the one concerned (Law on Residential Lease, §§ 24(1))and 26(6)). Special rules apply to leases of flats owned by local governments (Law on Residential Lease, § 26(7)).

100 c a s e s t u d i e s

with immediate effect. A general income-producing lease (lease for profit) established for an indefinite period can be terminated with one month’s notice, whereas an income-producing lease of agricultural property can be terminated only with six months’ notice and only at the end of the harvest period. In extraordinary circumstances the lease for profit can be terminated with immediate effect.96

Usufruct is a limited right in rem, in the sense that it draws on rights from the entire spectrum of property rights. The usufructuary is entitled to possess, use and collect the fruits of the property which is owned by another person. The rules of usufruct are to be applied mutatis mutandis to the usufruct of intangible property (for example, intellectual property, rights and receivables) (Civil Code, § 164(1)). During the existence of the usufruct, the nude owner can use the property and collect its fruits only to the extent that the holder of the usufruct does not exercise these rights (Civil Code, § 157(2)). Transfer of title to the property to a new owner does not affect the existence of the usufruct.97

Usufruct can be established for a fixed term but cannot last longer than the lifetime of the usufructuary (Civil Code, § 157(4)). Usufruct may be established by law, court order, administrative decision or contract, but will only be constituted validly upon registration in the Land Register. In the absence of registration, the usufruct can be enforced against the acquirer of the property only if he/she acted in bad faith or acquired the property without consideration (Civil Code, § 158).

Writing is not required for the constitution of a usufruct or a right of use over property. Rights, facts and data can, in principle, however, be entered into the Land Register, but only if they can be proved by a public

96The lease can be terminated with immediate effect if (a) the tenant impairs the property despite the warning of the owner or the property is gravely endangered, (b) the tenant does not cultivate the land concerned despite the warning of the owner or manages the property in a way that seriously endangers the efficiency of the production and productivity of the land, the livestock or the equipment, (c) the tenant does not pay the rent or the taxes within the period prescribed despite a request by the owner. If the tenant does not acknowledge the termination with immediate effect within three days the owner has recourse to the courts for a period of eight days. Where the owner fails to approach the court the termination with immediate effect expires. The claim for termination must be in writing (Civil Code, § 457). The heirs of the tenant can terminate the contract even if the deceased died less than six months before the end of the harvesting period but only thirty days after the deceased estate has been finalised (Civil Code, § 458). In case of an income-producing lease of agricultural property, the land is to be returned in a condition in which production can be continued immediately (Civil Code, § 460).

97Lenkovics, A dologi, p. 233.

deed, for example, a private deed countersigned by an attorney, or one approved by a final administrative or court decision (Law on the Land Register, § 8).98 In theory, this provision concerning the Land Register does not affect the rule that a contract for establishing a usufruct or a right to use does not have to be in writing, since an oral contract can be still registered if it is supported by a deed specified in law. Accordingly, one of the parties to an oral contract may seek a declaratory judgment that the contract came into existence and this judgment can serve as a basis for entering the usufruct or the right of use in the Land Register. Notwithstanding this theoretical possibility, such oral contracts are unknown in practice, since they trigger a very burdensome procedure with a high level of risk in terms of proof.

The usufructuary is obliged to adhere to standards of ordinary management of the property (Civil Code, § 159(1)). He/she is obliged to inform the owner of any threatening danger or actual loss, including the case where a third person interferes with the exercise of his/her rights. Furthermore, the usufructuary is obliged to tolerate any measures taken by the owner to repair or to prevent damage to the property (Civil Code, § 159(3)).

Upon termination of the usufruct, the usufructuary has to return possession of the property to the owner. He/she is liable for any damage to the property unless he/she can prove that he/she managed the property as a reasonable person would. The usufructuary is not obliged to indemnify the owner for the decrease in the value of the property due to normal use. The usufructuary can dispose of assets susceptible of deterioration, equipment and livestock in accordance with the standards of ordinary management. However, he/she has to replace them when the usufruct terminates, and if this is not possible, he/she is obliged to reimburse the owner for their value.

The owner is entitled to control the way in which the usufructuary exercises his/her rights. The owner may demand security after unsuccessfully warning the usufrutary not to act in a particular way, if he/she discovers that the usufructuary is not using the property in a proper manner, impairs the substance of the property or endangers its return after the termination of the usufruct. If the usufructuary does not provide security, the owner can request the court to suspend the exercise of the usufruct

981997 e«vi CXLI to¬rve«ny az ingatlan-nyilva«ntarta«sro« l, § 8 (Law no. CXLI of 1997 on the Land Register); Lenkovics, A dologi, p. 158.