New rules target illegal mass accommodation in residential properties across Greece

The proposed legislation provides for fines of up to €10,000 for individuals who operate or facilitate the prohibited use of such properties, additional daily penalties for non-compliance, and the possibility of temporary or permanent sealing of premises under specific conditions.

At the heart of the proposed regulation is the systematic rental, subletting or provision of individual beds or sleeping spaces in properties designated for residential use, where the arrangement resembles an organised collective accommodation facility and fails to meet the applicable operating requirements. This concerns the conversion of apartments into informal dormitories, where the property is not necessarily rented as a single residential unit but is instead commercially exploited through the provision of individual sleeping spaces to different occupants.

The initiative is particularly significant for the property market, as it seeks to distinguish lawful residential letting from activities that, according to the ministry, may pose risks to public health and safety, adversely affect living conditions in apartment buildings and distort competition. At the same time, tackling illegal subletting is linked to tax compliance and efforts to curb economic activities operating outside the established regulatory framework.

For the time being, however, the measure remains a draft regulation under consideration. The proposed fines, inspection procedures and penalties do not yet constitute an effective new regulatory regime but form part of the provisions outlined in the proposal prepared, according to information from ministry sources.

What Will Change for the Rental of Sleeping Spaces in Residential Properties?

A key element of the proposed legislation is the prohibition of the systematic rental, subletting or provision, by any means, of individual beds or sleeping spaces in properties designated for residential use.

This wording is significant because the regulation does not focus exclusively on the conventional rental of an apartment to a single tenant or family. Instead, it targets the organised commercial exploitation of individual sleeping spaces where the overall operation of the property resembles a collective accommodation facility or mass-lodging establishment without meeting the required standards.

A bed or sleeping space is defined as any designated facility intended for accommodation or rest. This includes beds, bunk beds, mattresses and other comparable structures. The proposed provision is therefore intended to cover different ways in which a property may be configured, regardless of the specific type of equipment used.

The decisive factor, however, is not simply the presence of multiple beds in an apartment. For a violation to be established, the proposal requires at least three specified criteria to be met cumulatively. These include the provision of sleeping spaces on a per-bed basis, the frequent or periodic turnover of occupants, the payment of direct or indirect consideration, and the configuration or use of the premises in a manner resembling an organised collective accommodation facility.

This approach seeks to distinguish ordinary residential use, even where several people share a property, from a systematic commercial activity characterised by mass accommodation. The presence of these criteria is expected to play a key role in substantiating violations during inspections.

Fines for Operators and, Under Certain Conditions, Property Owners

The proposed regulation provides for different penalties depending on the role played by each party involved in the use of the property. The principal administrative fine amounts to €10,000 and applies to tenants, subtenants, individuals granted use of a property, holders or possessors who exploit, permit or facilitate the prohibited use.

The provision is therefore not limited to the person directly receiving payment for the sleeping spaces. It also covers those who permit or facilitate the activity, provided they fall within the categories specified by the proposed legislation.

A separate provision applies to the landlord. In this case, the proposed fine is €5,000, provided it can be demonstrated that the landlord was aware of the prohibited use and tolerated, facilitated or permitted it. This links the imposition of the penalty to the landlord’s knowledge of and response to the activity in question.

This distinction has financial implications for the rental market, as it seeks to clarify the potential liabilities of the different parties involved in exploiting a property. It also highlights the importance of the property’s actual use, rather than merely the terms of the formal tenancy agreement.

Additional €1,000 Fine for Each Day of Non-Compliance

The proposed framework предусматриes particularly stringent penalties where the prohibited activity continues after the notification of an order to cease operations. In such cases, an additional fine of €1,000 per day would apply until full compliance is achieved.

The daily penalty is intended to provide an additional financial incentive to terminate the activity, on top of the initial administrative fine. If non-compliance continues, the total financial liability could increase substantially, as the daily charge would accumulate alongside the initial penalty.

The draft also provides for stricter treatment of repeat offences. Specifically, the fine would be doubled in the event of a repeated violation, while a second repeat offence would result in the tripling of the maximum fine.

In addition, the property could be sealed in cases of repeated violations. Temporary or permanent sealing may also be imposed alongside administrative penalties and an immediate cessation order where an imminent risk to the public interest is identified and urgent action is required to prevent it.

The provision for sealing premises is among the most stringent enforcement measures under consideration, as it goes beyond financial penalties and could prevent the continued use of the property for the prohibited activity.

Which Properties and Activities Will Be Exempt?

The proposed regulation includes specific exemptions to ensure that illegal forms of residential exploitation are not treated in the same way as lawful hospitality businesses or social welfare facilities.

In particular, properties holding a valid operating licence or having completed the required notification procedure as tourist accommodation establishments would be excluded from the scope of the measure. Short-term rentals conducted in accordance with the applicable legislation would also be exempt.

The exemption for licensed tourist accommodation is crucial, as the objective is not to prohibit organised hospitality or the use of properties for tourism purposes altogether, but to address activities operating without the required authorisations or in breach of the applicable standards.

Similarly, the reference to lawful short-term rentals clarifies that the proposed provision is not intended to be confused with the existing regulatory framework governing that market. Compliance with current legislation would remain the key criterion for exemption.

The proposal would also exclude established institutional facilities, hostels, boarding houses and other premises providing services to homeless people, individuals experiencing addiction, or people accommodated in psychosocial rehabilitation units. These facilities serve a different purpose and operate within established frameworks for social support and accommodation.

Which Authorities Will Carry Out Inspections?

The proposed framework envisages the involvement of several public authorities, reflecting the fact that the issue spans multiple areas of regulatory oversight, including tax compliance, public safety, urban planning legality and the operation of tourist accommodation establishments.

Specifically, the Independent Authority for Public Revenue (AADE), the Financial Police, the Municipal Police, urban planning authorities and the competent services of the Ministry of Tourism are expected to be responsible for conducting inspections and identifying violations.

The involvement of AADE relates to potential tax infringements and the need to scrutinise financial transactions associated with the commercial exploitation of properties. Urban planning authorities and the Ministry of Tourism would address, respectively, issues concerning the lawful use of premises and compliance with operating standards. The police authorities and Municipal Police would form part of the proposed enforcement mechanism.

The involvement of multiple agencies reflects the intention to address the phenomenon as an issue extending beyond landlord-tenant relationships to encompass the legality of property use and its wider impact on apartment buildings and urban areas.

The detailed inspection procedures are expected to be defined at the next stage, establishing how violations will be identified and how the proposed penalties will be enforced in practice.