Summary: In cases where an individual or legal entity appropriates or uses public property without having a contractual relationship with the State and consequently derives benefits to the detriment of the State, a Protocol of Compensation Assessment for Unauthorized Use of Public Property is issued by the competent public authority. This act essentially aims to return to the State a financial equivalent, as compensation, from the unauthorized possessor or user of the public property, for the damage caused. In this memorandum, we will outline the key legal aspects of this protocol and proceed with a detailed analysis of the sole legal remedy available to challenge or modify it — the objection — with emphasis on specific legal issues.
1. The Protocol of Compensation Assessment for Unauthorized Use of Public Property
Pursuant to paragraphs 1 and 2 of Article 115 of the Legislative
Decree dated 11/12 November 1929 "on the administration of
public properties", issued under the enabling provision of
Article 2 of Law 2466/1929 and replaced by Article 5 of Law
5895/1933, as subsequently amended and supplemented by Articles 20
of Law 1540/1938, 19 of Law 1919/1939, 2 of Law 1925/1951, and
Article 5 para. 4 of Law 263/1968, a compensation
is determined by the administration in the form of a protocol
against any person who uses or appropriates public property without
a contractual relationship with the State. The compensation
reflects the value of the benefit derived from such unauthorized
use, assessed for the relevant time period based on the judgment of
a "reasonable person".
According to Article 2 of Law 2971/2001, the terms "public
property" also include shorelines and
beaches.
The assessment is unilaterally determined by the administration and functions as a financial consideration for the unauthorized benefit. This measure serves a dual purpose: (a) to deter the continued unauthorized use and (b) to compensate the State for the economic value lost during the period of such use, thereby reinforcing public finances.
The amount is calculated as if a lease contract had been validly concluded, based on the leasing value of the property. Criteria considered include: the type and location of the land (e.g. touristic area), its surface area, the manner of its use (e.g. commercial exploitation), the duration of the use, and whether such use nullified its public/common use status. Also taken into account are comparative elements such as prior lease agreements between the same party and the State, and similar lease agreements in the area (see also Article 16A of Law 2971/2001).
The payable amount is calculated by multiplying the square meters used by the lease value per square meter. For instance, for 500 m² at €20/m², compensation amounts to €10,000. The compensation must be reasonable, and in any event, cannot exceed five years from the commencement of the unauthorized use (see Article 2 of Law 388/1943).
2. The Legal Remedy of Objection as a Means of Defense
According to Article 1(c) of Royal Decree 619/1965, the protocol was originally issued by the competent Tax Authority. Today, it is issued by the Head of the competent Public Property Directorate and served to the person utilizing the property.
The dispute is of private law nature and falls under the jurisdiction of civil courts, pursuant to Article 94(3) of the Greek Constitution. The unauthorized user may file an objection under Article 583 of the Greek Code of Civil Procedure within thirty (30) days from the day following the service of the protocol, before the Single-Member Court of First Instance of the location where the property is situated. The case is heard under interim relief proceedings, as per Articles 686 et seq. of the Code and Article 3(1) and (2) of the Introductory Law to the Code of Civil Procedure.
The scope of the objection is exclusively limited to annulment or modification of the protocol. Issues such as ownership of the public property (if disputed) must be addressed separately, typically via an action (lawsuit) under ordinary proceedings. An objection against a protocol of administrative eviction may also be joined, if such protocol has been served.
Grounds for the objection may be either procedural (formal) or substantive. Formal grounds include lack of competence of the issuing authority, failure to include minimum legal content (e.g., proper property description, attached inspection report), or improper service.
Substantive arguments may concern the status of the property as public, lack of ownership by the State, or whether the objector merely held possession without benefit. Further, the objector may argue that a valid contract exists justifying the use, or that the compensation assessment is incorrect.
3. Specific Issues Regarding the Objection
A. Legal Standing
The only party liable for payment and therefore
entitled to file an objection is the individual or
legal entity that unauthorizedly used the public
property.
In cases of joint or successive unauthorized use
by multiple parties, each of them is jointly and severally
liable, provided the protocol was validly issued against
all of them (see Greek Supreme Court decision Areios Pagos
2131/2007).
The proper defendant is the Greek State, represented by the Minister of Finance, and in practice, by the Head of the competent Public Property Directorate. The Directorate itself does not have legal personality or procedural standing. Thus, if the objection is filed against the Directorate, it will be dismissed as inadmissible. However, the document must still be served upon the Head of the Directorate, otherwise the objection will again be deemed inadmissible.
This was confirmed by the Supreme Court in judgment No. 198/2020:"...when a compensation protocol is issued by the Head of the Public Property Directorate, the objection must be served upon said Head, who exceptionally represents the State in this matter. Service only upon the Minister of Finance is invalid, regardless of any actual harm to the State."
B. Advance Payment of 20% of the Assessed Compensation
Pursuant to Article 3 para. 23a of Law 4092/2012, for
the admissibility of legal remedies against acts of the
Public Property Directorates (e.g., imposition of fines or
compensation), the claimant must, before the first
hearing, submit proof of payment of 20%
of the assessed amount (with a cap of €30,000).
In practice, a declaration is issued by the Directorate, submitted
to the competent Tax Office (DOY), where payment is made. The
claimant then receives a payment certificate for use in court
proceedings.
Failure to meet this requirement results in inadmissibility of the legal remedy. However, if the objection is upheld, the amount is refunded; if rejected, the amount is offset against the total debt.
4. Legal Remedies
Although the decision of the Single-Member Court of First Instance is issued under interim relief proceedings, it definitively resolves the dispute concerning the obligation to pay and the amount of compensation. Initially, case law supported the admissibility of legal remedies (appeals) against such decisions, despite the fact that the original wording of Article 115 para. 2 of the Legislative Decree of 11/12 November 1929 explicitly prohibited the filing of legal remedies.
In particular, according to Supreme Court en banc (Plenary) Decision No. 38/2002: "The prohibition on the exercise of legal remedies, as provided under para. 2 of Article 115 of the above-mentioned Decree, has been effectively abolished, as it introduced a special rule concerning a matter subject to the jurisdiction of the civil courts, and dealt with an issue that is not compatible with the Code of Civil Procedure." The Court continued: "The inadmissibility of legal remedies under Article 699 of the Code of Civil Procedure applies only in cases where the judgment has a truly provisional nature or regulates a temporary matter. It does not apply to judgments which, despite being issued under the interim measures procedure, definitively adjudicate the dispute."
However, with the entry into force of Article 326 para. 3 of Law 4072/2012 (Government Gazette A' 86/11.04.2012), Article 115 para. 2 of the above Decree was amended, and the prohibition of legal remedies was reintroduced. Consequently, Greek case law changed course and now consistently holds that legal remedies (e.g. appeal) are not allowed, ruling further that this restriction does not violate Article 20(1) of the Constitution or Article 6(1) of the ECHR (European Convention on Human Rights) — see e.g. Areios Pagos 231/2023.
5. Conclusion
In the event of service of a Protocol of Compensation Assessment for Unauthorized Use of Public Property, the person against whom the protocol is issued should carefully assess the legal implications, deadlines, and procedural requirements described above, especially if they wish to challenge it through an objection. Timely and correct procedural action is crucial, given the binding effect of the protocol and its enforceability as a title for administrative enforcement under public revenue collection laws.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
