Commercial lease agreement

1. Introduction

Entering into a commercial lease agreement constitutes a key milestone for any business, as it directly affects its operation and long-term planning, while at the same time representing a significant investment decision for the property owner.

With the legislative framework having evolved and the 2026 regulations affecting, among other things, rent increases, a clear understanding of the rights and obligations of both parties is essential. In practice, however, the key to the smooth development of any professional lease lies in a clear and well-structured relationship between tenant and landlord, founded on explicit terms and proper communication from the outset.

2. Legal framework

Commercial leases are governed by Article 13 of Law 4242/2014 (Government Gazette 50 A’/28.02.2014), which substantially liberalised new commercial leases of shops, offices, warehouses and other professional premises throughout Greece.

At the same time, the twelve-year statutory protection was maintained for leases concluded prior to 1 March 2014. However, as we move into 2026, very few, if any, such legacy leases remain, significantly limiting the practical relevance of this regime for the future of the market (noting that the former automatic four-year extension no longer applies).

For new leases, the private lease agreement signed by the contracting parties plays a decisive role, while the electronic declaration of the lease through the AADE platform has a purely declaratory nature and does not substitute the content of the agreement. The law applies only supplementarily, where no specific agreement between the parties exists.

3. Procedure for entering into a professional lease

According to established case law, and in particular Supreme Court decision 749/2014, professional leases do not require notarization or registration, even when their duration exceeds nine (9) years. In practice, a private agreement is fully sufficient and binding, provided it bears a certified date, which is now mandatorily ensured through the electronic submission of lease details to the AADE, thereby enhancing the tenant’s legal security.

As a result, the tenant is not at risk of eviction after the ninth year by a future purchaser, donee or heir of the property, except in the specific case of acquisition through auction, where under certain conditions the new owner may terminate the lease (pursuant to Article 1009 of the Code of Civil Procedure).

The execution of a professional lease should always be carried out with the assistance of a lawyer. In parallel, a full legal and technical due diligence of the property is essential, in order to ensure that it is suitable for the agreed use and free from legal or planning issues. Equally important is the financial due diligence of the tenant, so as to avoid future complications and ensure the smooth continuation of the lease.

Checklist before signing:

4. Lease and leased premises

The lease has a single and unified character and concerns the property as delivered and accepted by the tenant. For this reason, the lease agreement must clearly and comprehensively describe what exactly is included in the leased premises, while in most cases floor plans, diagrams or other technical documents are attached and form an integral part of the agreement.

Upon taking possession of the premises, the tenant declares that the property has been inspected and is accepted as fully suitable and entirely satisfactory for the intended use. This declaration presupposes that all necessary legal, technical and operational checks have been carried out, as analyzed in a separate article regarding pre-signing due diligence.

Any subsequent challenge to the condition of the premises is invalid, except in cases of latent defects that could not have been identified during the inspection.

5. Use of the leased premises

The leased premises shall be used by the tenant exclusively for the purpose specified in the lease agreement and declared at the time of execution. The tenant shall configure the property according to the needs of its business activity and bears responsibility for its lawful and proper use.

The issuance of all required operating licenses and approvals constitutes the tenant’s obligation. The landlord bears no additional obligations in relation to the operation of the business, beyond providing any documents, certificates or information necessary for the completion of the relevant procedures.

Indicatively, licensing may require a fire safety certificate with passive and active fire protection plans, an electrician’s certificate, where applicable, a contract with a safety technician, an environmental permit and an operating license. The Energy Performance Certificate (EPC), where required, constitutes an obligation of the landlord.

6. Lease duration – expiry and termination

The duration of a professional lease is, in principle, freely agreed by the contracting parties. If a term longer than three years is agreed, it is binding on both parties. If a shorter term is agreed or no specific duration is provided, the statutory minimum three-year term applies, binding both landlord and tenant.

In practice, business leases are structured to provide flexibility. Typically, either a three-year lease with a unilateral renewal option in favor of the tenant is agreed, or longer-term leases (e.g. six or nine years) accompanied by a specific early termination right at a predefined point in time.

In both cases, the relevant right is exercised by written notice to the landlord within an agreed timeframe, thereby achieving a balance between stability for the owner and flexibility for the tenant.

The lease may be terminated by written agreement of the parties, subsequent to the original lease and evidenced by a document of certified date.

If the lease becomes indefinite in duration, either party may terminate it by written notice, with termination taking effect three (3) months after notification, without compensation.

Tacit renewal occurs when, after the expiry of a lease, the tenant continues to use the property and the landlord is aware but does not object. In such cases, the lease continues without a fixed term, leaving the tenant exposed, as the landlord may terminate it at any time.

For this reason, in serious professional leases, tacit renewal is rarely chosen. Instead, renewal or termination is almost always expressly regulated in writing.

7. Financial terms of the lease

The rent is subject to free negotiation between the parties, who expressly declare it fair, reasonable and reflective of both market conditions and the actual rental value of the property.

Rent adjustment is usually agreed on an annual basis and is typically linked to changes in the Consumer Price Index, often increased by one additional percentage point. In longer-term and higher-value leases, safeguard mechanisms with minimum and maximum adjustment limits are commonly included.

It is noted that Law 5255/2026 (Article 59 para. 1) extended until 31.12.2026 the 3% cap as the maximum annual rent increase for commercial leases.

The tenant bears in full either stamp duty (currently 3.6%) or VAT (currently 24%), depending on the agreement and nature of the lease, as well as any existing or future taxes, fees or charges imposed by law on tenants. The tenant also bears utility costs, common expenses and general operating costs.

Income tax on rental income and ENFIA property tax, as well as any tax or levy replacing them or imposed in the future and linked to property ownership, are borne exclusively by the landlord.

Upon execution of the lease, a security deposit is paid to the landlord, typically equal to two monthly rents, as security for compliance with the lease terms. The deposit is not offset against rent upon termination unless expressly agreed otherwise.

8. Repair and maintenance of the premises

In professional leases, renovations are generally undertaken by the tenant, who adapts the space to the needs of its business. The tenant may, without the landlord’s consent, carry out internal or external non-structural modifications, provided they do not affect the structure, stability or general safety of the property.

Works relating to structural elements or core infrastructure, such as load-bearing elements or heating and cooling systems, are generally the responsibility of the landlord, unless otherwise agreed.

The tenant is responsible for proper use and maintenance within the scope of ordinary use. Structural defects or issues relating to the overall condition of the property remain the landlord’s responsibility.

Permanent improvements typically remain for the benefit of the property upon lease expiry, without compensation to the tenant, unless reinstatement is expressly agreed.

9. Insurance of the leased premises

Insurance of the leased premises constitutes a basic measure of prudence for every landlord. From the commencement of the lease, the property should be insured at least against fire and flood, while earthquake cover may be agreed separately. Such insurance protects the value of the property and may entitle the landlord to an ENFIA discount where applicable.

At the same time, the tenant is required, at its own expense and for the entire duration of the lease, to maintain insurance covering the premises, as well as its contents (equipment, goods, installations), and to hold third-party liability insurance for its activity.

In all cases, the tenant bears responsibility for any damage or incident arising within its sphere of influence from the use of the premises or its business activity.

10. Other obligations

The tenant must maintain the premises in good condition of cleanliness and hygiene and ensure safe daily operation in accordance with its activity and applicable law.

The storage or use of dangerous, flammable or explosive materials is prohibited unless directly related to the declared business activity and permitted under the relevant licenses.

The tenant must allow the landlord access to the premises for inspection, at agreed times and frequency, following reasonable notice.

During the final month prior to lease expiry, the tenant must allow visits by prospective new tenants, in coordination with the landlord and without unjustifiably disrupting business operations.

11. Subleasing

In professional leases, subleasing is typically permitted under conditions, particularly where it involves group companies or companies in which the tenant participates. In logistics, warehousing or 3PL leases, subleasing is often accepted due to the nature of the activity.

Subtenants are usually bound by the core terms of the main lease, except for those governing the tenant–subtenant relationship (e.g. duration or rent). The tenant remains fully liable to the landlord for compliance with the lease.

In all other cases, subleasing or granting use to third parties is prohibited without prior written consent.

12. Assignment – transfer

As a rule, assignment or transfer of lease rights by the tenant is prohibited unless expressly agreed. Exceptions may apply for transfers to affiliated companies.

Assignment by the landlord to third parties is also prohibited without the tenant’s consent. In practice, assignments to banks or financial institutions are common, provided they are expressly provided for.

Both parties must notify each other in writing of any assignee, pledge or third-party user prior to such action.

13. Termination of the lease

The lease may be terminated by either party in the event of breach of contractual terms.

The tenant may retain the right of termination without penalty, subject to the landlord’s consent, where despite reasonable efforts it is not possible to obtain or maintain the required operating license through no fault of the tenant.

Professional leases often include a waiver by the landlord of the right of owner-occupation, where permitted by law, in order to ensure lease stability.

In cases of tenant breach leading to termination, the security deposit is typically forfeited as a contractual penalty.

14. Conclusion

Signing a professional lease in 2026 is not a mere formality but a strategic decision affecting business viability and investment security. The modern framework offers flexibility but requires careful attention to detail—from rent caps and insurance coverage to subleasing and technical specifications.

Prevention remains key: through due diligence and a well-structured private agreement, the parties ensure a stable relationship that allows both parties to focus on growth with confidence.