The storm of reactions for the rental ceiling continues

of Eleni Botas

The storm of reactions from real estate investors continues to what has been announced by the Minister of Development Adonis Georgiadis for the introduction of a special provision, which will set a maximum of 3% in the allowed increase of professional leases for the whole of 2022, with retroactive effect from January 1 of this year.

Although Mr. Georgiadis was forced after the strong reactions, to exclude from the ceiling measure the Real Estate Investment Companies (AEEAP), nevertheless the noise does not say to stop.

Real estate investors talk about the wrong measure, about serving trade union interests, without taking into account the dozens of problems that will arise as private agreements that contain different clauses, will accept different interpretations.

In a new post, Giannis Perrotis, CEO of Atria Property Services, emphasizes that its selective application to all investors except AEEAP, many of whom are institutional and others are smaller and very small investors – there are about 1 million of them in Greece – proves that the Ministry really has no idea what it is doing.

As it typically states:

“Yesterday I wrote how harmful it is for investors to impose a retroactive ceiling of 3% on the adjustment of professional rents.

Today and after the first reactions, the Ministry of Development hastened to inform that the measure will not be applied in the case of AEEAP, ie to a specific legal form of investors regardless of the data of their employees, clarifying without even meaning that the measure was taken to strengthen small business.

Not only was the measure catastrophic but its selective application to all investors except GNIs, many of whom are institutional and others smaller and very small investors – there are about 1 million of them in Greece – proves that the Ministry really has no idea what does.

Who will explain to them that the AEEAP may have small tenants who may need support, but the other investors may also have large tenants, probably financially strong who will be unfairly favored?

Who will explain to them that they should not interfere in private contracts because this undermines the rule of law and the constitutionality that should be observed as the apple of the eye?

Who will explain to them that such measures do enormous damage to investor confidence in the country and the country needs investor confidence when it still owes 200% of GDP in addition to private debt?

Who will explain to them that by discreetly treating some (investors) who are not, however, the affected (tenants) do not achieve their goal?

The real solution is to support only those who risk closing down from rising energy costs, let alone rents. If they are many let them be given a temporary boost until they adjust.

I do not understand why in order to save some tenants who may not need it and why the owners of the properties where they are housed should lose respectively because this was decided by the Minister of Development and which owners may be financially weaker:

Interference with contracts must be abolished. “If the government wants to help tenants with problems, let it do so by subsidizing them, not by dismantling the market it has to protect.”