And how we can help
Building a house in Greece is a significant investment. Yet many clients enter into agreements with contractors without having sufficiently defined the price, technical specifications, responsibilities and deadlines before construction begins.
In our experience, many construction disputes do not arise because of one major event. They develop gradually because important matters were left unclear at the beginning of the project.
Below are five of the most common pitfalls clients should consider before assigning the construction of their property to a contractor.
1. Not Clarifying Whether VAT Is Included in the Price
One of the most important financial questions is also one that clients frequently overlook:
Does the agreed construction price include VAT?
The standard VAT rate in Greece is 24%. On a substantial construction project, this can make an enormous difference to the final cost.
For example, if a contractor quotes €300,000 and VAT of 24% must subsequently be added, the additional cost is €72,000.
Before signing, the contract should therefore clearly specify whether each quoted amount is inclusive or exclusive of VAT, how invoices will be issued and which amounts the client will ultimately be responsible for paying.
This should never be something the client discovers after construction has started.
2. Starting Construction Without Detailed Implementation Plans
Architectural plans and the plans required for the building permit are not necessarily sufficient for the practical execution of a house.
Detailed implementation plans should be prepared before the relevant stages of construction, particularly for:
- electrical installations, sockets, switches and lighting points;
- water and plumbing installations;
- drainage;
- air-conditioning and heating;
- positioning of internal and external units;
- technical and plant equipment; and
- routes for pipes, cables and other services.
Without detailed plans, too many decisions are left to be made during construction.
This frequently results in delays, changes and misunderstandings. It can also create disputes about whether particular works were included in the contractor’s original price or constitute additional works for which the client must pay extra.
The more that is decided, documented and priced before construction begins, the less room there is for disagreement later.
3. Failing to Specify Exactly What Materials and Works Are Included
A construction contract should not simply provide that a contractor will deliver a “completed house” for an agreed price.
What exactly constitutes a completed house?
The contract and its schedules should define, as precisely as reasonably possible, both the works included in the agreed price and the materials and specifications that will be used.
Depending on the project, this may include waterproofing and insulation systems, windows and doors, flooring, sanitary ware, electrical installations, kitchen specifications, heating and cooling equipment, painting systems, external works and landscaping.
Where specific products or standards have been agreed, the manufacturer, product range, technical specification or agreed budget should be recorded.
This is important not only for controlling costs but also for protecting the expected quality of the finished property.
Without sufficiently detailed specifications, the client may believe that a particular product or standard of finish is included while the contractor has priced for something entirely different.
A detailed contract substantially reduces the possibility of unexpected additional costs, misunderstandings and disputes over the quality or specification of materials.
4. Not Having Independent Representation and Supervision on Site
Another common mistake is relying entirely on the contractor to supervise and financially control the project.
The contractor is responsible for delivering the works, but the client should also have someone independently protecting the client’s interests.
For substantial projects, independent oversight can include monitoring the progress and quality of the works, checking that agreed materials and specifications are being followed, reviewing quotations for additional works, comparing costs and keeping track of the financial development of the project.
This becomes particularly important when changes, additional works or unforeseen problems arise.
Our office can undertake this role on behalf of clients, working alongside the relevant engineers and other professionals, reviewing quotations and expenditure, monitoring contractual compliance and helping clients maintain proper documentary and financial control throughout the project.
This service can be particularly valuable for clients who live outside Greece and cannot regularly attend the construction site themselves.
5. Failing to Agree Clear Completion Deadlines and Consequences for Delay
One of the most common sources of disappointment in construction projects is delay.
A contractor may initially provide an approximate completion date, but an informal estimate is very different from a properly agreed contractual deadline.
The construction contract should establish a realistic programme, important milestones and a clear completion date.
It should also specify what happens if those deadlines are not met.
Where appropriate, the contract can provide for agreed financial consequences or penalties in the event of unjustified delay, while also defining the circumstances in which a legitimate extension of time may be permitted.
Without clear contractual provisions, completion dates can gradually move further and further into the future, leaving the client with limited practical leverage and potentially facing additional accommodation, financing or other costs.
A Construction Contract Should Prevent Problems, Not Simply Deal With Them Afterwards
A properly drafted construction contract cannot eliminate every difficulty that may arise during a building project.
It can, however, significantly reduce uncertainty by establishing from the beginning what is being built, what materials will be used, what is included in the price, how additional works will be approved and charged, when the project must be completed and what happens if either party fails to comply with the agreement.
Our office undertakes the drafting and negotiation of construction contracts in Greece, with particular attention to the practical realities of construction rather than treating the agreement simply as a standard legal document.
Our Experience in Construction and Property
Our approach is informed not only by legal practice but also by substantial first-hand experience in construction and property development.
The lead lawyer of our office has personally developed three houses and undertaken the renovation of a further five personal and family properties. This practical involvement provides first-hand understanding of the realities of construction projects — from appointing contractors and comparing quotations to selecting materials, controlling costs, dealing with variations and resolving problems arising during the works.
The lead lawyer also has extensive experience in property and construction litigation and has successfully represented clients in disputes with contractors, achieving successful outcomes in all such cases handled to date.
This combination of legal expertise, litigation experience and first-hand construction experience enables our office to anticipate many of the problems that can arise during a building project and to prepare construction contracts designed to address those risks before works begin.
For clients undertaking a construction project in Greece, careful planning and a properly drafted agreement at the beginning can prevent considerably more expensive problems later.
The objective is simple: agree the details before the first disagreement arises.