Social Compensation
"Social consideration is the contract with the object of the partnership of General Government bodies, as defined in paragraph b of paragraph 1 of article 14 of Law 4270/2014 (A' 143), with private contractors, in which the contractor builds at his own expense, a building on undeveloped property of the organization and his consideration consists of the exploitation of the property for a certain period of time with the parallel obligation to lease part of it to beneficiaries for a predetermined rent. The selection of the contractor is made after public an invitation sent by the entity that owns the property. After the end of the exploitation period, the contractor is obliged to hand over the property to the owner entity.
The social compensation contract may also concern structured properties. In this case the scope of the contract also includes the demolition of the buildings, which is performed at the contractor's expense.
Beneficiary tenants in social compensation programs are selected by the entity that owns the property, based on objective social criteria, and in particular their income, marital status and age of the beneficiaries' children.
In buildings erected following a social compensation contract, it is permitted to enter into lease contracts with an option to purchase the horizontal property (rent to own) from the beneficiaries. This contract, in which the entity that owns the property also participates, includes the type of notarial document and is only valid after it has been transferred to the relevant Mortgage Registry or registered with the relevant Land Office.
Contracts of par. 4 are may be concluded for real estate of General Government bodies, as defined in par. b of section 1 of article 14 of Law 4270/2014, in addition to those erected following a social compensation contract."
The maximum time of exploitation of the property by the contractor is determined in the relevant invitation after a study which documents the time required to recover the construction costs and the reasonable contracting profit.
The percentage of horizontal properties that are leased to beneficiaries corresponds to a percentage between thirty percent (30%) and sixty percent (60%) of the total co-ownership.
The call for the selection of the contractor describes at least the following:
a) the undeveloped property, any existing buildings located within it, and the characteristics of the building to be erected on it, which with its surrounding area, meets the access conditions for people with disabilities,
b) the horizontal properties that will be established and their permitted uses,
c) the criteria for participation and selection of the contractor,
d) the main terms of the lease agreements between the contractor and the beneficiaries, except for the rent.
invitation may also describe the way of determination of the rent for the residences that are compulsorily rented to beneficiaries.
The criteria for selecting the contractor may include:
a) the shortest period of exploitation of the property,
b) the lease of more residences to beneficiaries,
c) the amount of the rent for the residences rented out to beneficiaries, if this has not been specified in the invitation, in accordance with par. 2,
δ) d) any combination of the above.
- Social compensation contracts are considered concession contracts of Law 4413/2016 (A' 148). The provisions of Law 4413/2016 apply to the selection of a contractor, the preparation and execution of the contract and to any other issue not covered by the provisions of this law. As regards pre-trial protection and judicial protection at the stage preceding the conclusion of the contract, the Book IV of Law 4412/2016 (A' 147) shall apply.
