April 2021

Athens Court of Appeal Decision on Landlord's Compensation

The Athens Court of Appeal issued decision No. 1394/2021, which upheld the original court decision on the basis of which the amount of 500,000 euros was claimed as compensation for non-performance of an ancillary obligation in a lease contract. Specifically, our client company concluded a lease agreement with a leasing company managing food stores, while the latter also undertook the obligation to carry out completion work on the lease. For reasons of the lessee's business policy, the shop in question has never been used and the completion work has never been started. The lessor therefore terminated the lease contract on the grounds of the lessee's breach of that obligation and brought an action for damages. The Court of Appeal accepted what the Court of First Instance had accepted, namely that the leasing company had an obligation, together with the payment of the rent, to complete the lease in accordance with certain specifications. It therefore awarded damages of EUR 500 000, since technical reports and tenders from construction companies had already been submitted at the time of the hearing of the case in order to determine the exact cost of the completion. The judgment states in particular: ''It is clear from the foregoing that under the terms of the aforementioned lease agreement, the defendant assumed the additional contractual obligation, ancillary to the main lease agreement, to carry out the remaining work for the completion of the leased commercial premises at its own exclusive expense, which it was not entitled to recover from the plaintiff for any reason and on any legal basis. [...] From all the above facts, it has therefore been established that until the expiry of the lease, which took place with the termination of the lease by the plaintiff, the defendant, although under the terms Ea, Eb and Eg of the lease contract at issue from 3-12-2010, was obliged to carry out the works to complete the leasehold property, nevertheless failed to do so. As a result of the defendant's failure to fulfil the above contractual obligation, the plaintiff has suffered pecuniary loss consisting of the expense it will have to incur in carrying out the works of completion of its shop and its transformation into a mixed food shop which were not carried out by the defendant and which, according to the disputed lease contract, concerned...'.