The "Odyssey" of the Building Factor Transfer & the Right to Compensation of M.S.D. Title Holders

The institution of building factor transfer (M.S.D.) is undoubtedly the most troubled institution of Urban Planning Law in our country, since for four decades its operation has not even been achieved despite the occasional attempts of the legislator that have remained ineffective to date. It is recalled first of all that the M.S.D. constitutes a type of compensation for owners, whose properties are affected by environmental regulations (e.g. listed properties) or urban planning content (properties subject to zoning), with the consequence that an obligation to compensate arises on the part of the State. Historically, the first attempt to regulate the institution of the M.S.D. was attempted with the provisions of Law 880/1979. However, with the decisions of the Plenary of the Council of State No. 1071-3/1994, these provisions were deemed unconstitutional because they allowed the transfer of the building coefficient to areas that had not been previously designated as such. This was followed by the issuance of Law 2300/1995, with the provisions of which an attempt was made to regulate the institution from the outset. However, with the Council of State No. 6070/1996, these provisions were also deemed unconstitutional, insofar as they concerned in particular the properties subject to street development. A revision of the 2001 Constitution addressed this issue and, subsequently, Law 3044/2002 was issued, which attempted to regulate the institution of building coefficient transfer from the outset, while the transitional provisions of Article 7 thereof concerned the titles that had been issued under the previously applicable above-mentioned regimes. However, by Decision 2366/2007 of the Plenary of the Council of State, the basic provisions of this law were also deemed unconstitutional. Another attempt by the common legislator to resolve the problem and activate the institution was attempted with the issuance of Law 4495/2017. However, these provisions were never activated either, since the regulatory acts provided for therein, which were necessary for their implementation, were not issued. Finally, they were replaced by Law 4759/2020, which seeks, once again, the comprehensive regulation of the M.S.D. institution. However, even to this day (July 2026) the Administration has not issued, as it should have, despite the passage of a reasonable period of time since the issuance of the law (Law 4759/2020), the regulatory acts, which are provided for in this law and are necessary for the activation of the nominal M.S.D. titles, and, most importantly, it has not issued the envisaged presidential decree that will regulate the matters related to the said titles, nor the also envisaged J.Y.A. for the creation and operation of the Digital Land Bank, through which the transfer of the building factor will be carried out, and in particular, the procedures for carrying out the M.S.D. will be provided for, the method and procedure for operating the Digital Land Bank, the method of calculating the land values ​​of the properties, the electronic process of matching the offer properties to the properties receiving the building factor, any fee and other fees, the parties liable for payment and the beneficiaries who collect them, the process of payment/deposit of the value of the transferred building factor by the accepting building factor and its disbursement to the offering building factor, the payment/deposit deadline, after the expiry of which the building factor transfer process is cancelled, the printed and electronic recording of the completion of the of building coefficient transfer and the relevant title that can be transferred to the mortgage registries and registered in the country's land registers, etc. Furthermore, the law provided for in article 78 par. 2 sub. b of the Joint Ministerial Law, which will specify the method and conditions for registering building coefficient transfer titles, which have been issued under laws 880/1979 (A` 58), 2300/1995 (A` 69) and 3044/2002 (A` 197) and will determine the time of commencement of operation of the Digital Land Bank, has not yet been issued.

The result of the Administration's failure to activate the provisions of Law 4759/2020 is the inability to activate the M.S.D. titles that have been issued based on previous laws and the perpetuation of the hostage-taking of the holders of these titles, a fact that directly violates their right to property [cf. Ap. Papakonstantinou, Article 17 of the Constitution, in the collective work: Sp. Vlachopoulos/X. Kontiadis/G. Tasopoulos, Constitution, Interpretation by Article, ed. Nomiki Bibliothiki, 2024, p. 318 ff., by the same, The institution of forced expropriation and the protection of property after the 2001 revision, in the collective work: Center for European Constitutional Law, Themistocles and Dimitris Tsatsos Foundation, X. Kontiadis (ed.), Five years after the 2001 constitutional revision, ed. Ant. N. Sakkoulas 2006, p. 385 ff.], while at the same time the fair balance guaranteed by the principle of sustainable development is also overturned [cf. Ap. Papakonstantinou, The constitutional principle of sustainable development. Regulatory content and jurisprudential applications, 2024 ed. Law Library (Academy of Athens Award 2023), by the same, Constitutional protection of the environment and economic development: From conflict to harmonization of the goods at stake, Public Law and Administrative Law Review 2018, pp. 687 ff., by the same, The environmental Constitution: Contemporary aspects, Environment and Law 2011, pp. 436 ff., by the same, Social democracy and social rule of law according to the Constitution of 1975/1986/2001, 2006 ed. Ant. N. Sakkoulas, p. 1163 ff., ibid., Sustainability and sustainable development as constitutional principles: Interpretative, regulatory and jurisprudential aspects of the environmental Constitution, Environment and Law 2007, p. 536 ff., ibid., The constitutional principle of sustainable development of island regions, in the collective work: G. Tsaltas ed., Sustainability and Environment. The island space in the 21st century, 2005, p. 157 ff., ibid., Ecological constitutionalism and sustainable development: The example of island regions, Review of Public Law and Administrative Law, vol. 3/2005, p. 465 ff., ibid., Judicial activism and the Constitution. The example of the environmental jurisprudence of the Council of State, Environment and Law 2006, p. 222 ff., ibid., The principle of sustainable development, Review of Administrative Law and Public Law 2002, p. 580 ff., ibid., Article 24 of the Constitution as a field of legal-political tension in the recent jurisprudence of the Council of State, Law and Nature 1997, p. 573 ff.].

For this reason, a claim for compensation by the holders of these M.S.D. titles is based directly on the Constitution and the ECHR, which can only be pursued by bringing an action against the State [see Ap. Papakonstantinou, Transfer of Building Factor and Protection of Property: The History of an Institutional Adventure (from Law 880/1979 to Administrative Law 3216/2022), Environment and Law, vol. 1/2024, pp. 62 et seq.]. A series of decisions by administrative courts have already been issued that vindicate the holders of the M.S.D. titles and oblige the State to pay them as compensation the (current) objective value of the surfaces to which these titles relate. Our Law Firm is proud of the court decisions that concern its cases and vindicate the holders of the M.S.D. titles (see, for example, the Supreme Court of Justice 1587/2024, the Athens Administrative Court of Appeal 2012/2026, 1137/2025, 3786/2022, 1110/2021, the Athens Administrative Court of First Instance 10162/2024, etc.).

The Administration has not proven capable, over time, of activating the institution of the M.S.D. The recent “pilot” operation of the digital land bank, in which M.S.D. titles may be registered, certainly does not constitute the beginning of the procedures for their activation, nor does it establish an obligation or even an expectation of their holders that they will be activated, nor does it ensure, at the very least, their rights. The long-term inaction and regressions of the Administration on this issue largely predetermine the further perpetuation rather than the resolution of the problem, forcing the -hostage- holders of these titles to file lawsuits to secure their claims. However, caution is required from the latter, given that the risk of their claims becoming statute-barred is already looming. This is a major problem that undoubtedly undermines the rule of law and, in any case, does not correspond to modern constitutional requirements for the protection of property.