Buying a property in Italy may be your first experience with the Italian legal system

Investing in Italian real estate requires long-term planning. It should be an exciting process. However, it can be stressful if things go awry. Unfortunately, foreign property purchasers in Italy often throw caution to the wind and do things that they would never dream of doing when buying a property at home. If you’ve ever bought a property at home, you probably didn’t opt for DIY conveyancing. You most likely instructed a lawyer to manage all the legalities on your behalf. Italian property law is complex, probably unfamiliar to you. It raises special issues of practice not present in other transactions and jurisdictions. An Italian property lawyer is a qualified legal specialist, experienced at dealing with these problems.

Italian property purchases proceed through three stages. Each stage has legal and financial implications

Firstly, in a typical Italian home purchase, the buyer enters into a brokerage contract with a real estate agent. This is usually in writing. Acting as an intermediary, the estate agent conducts negotiations with the vendor. The buyer and vendor then conclude a formal reservation offer. This is usually time-limited. Often a vendor agrees to remove the property from the market for a period of two weeks. A buyer pays a first deposit and conducts preliminary due diligence.

Secondly, assuming the buyer and seller agree to continue the process, they enter into a preliminary contract and agree a completion date. The buyer pays another deposit at this point. Between signing and completion of the sale, the buyer has a further opportunity to conduct more in depth due diligence. By law, it is the buyer’s responsibility to check the legalities. As a minimum, due diligence at this stage should include checking ownership through title deeds. Also, searches pertaining to  property plans and planning permission.

In the third and final stage, all parties to the transaction sign the deed of sale. On behalf of the Italian State, a notary public draws up this deed, oversees signing and exchange of the outstanding purchase price. The notary also collects purchase tax and registers the transfer of ownership.

Mistakes when buying a property in Italy can become costly, time-consuming and heartbreaking

We often meet people who find themselves in trouble because they didn’t seek legal advice when they bought their Italian property. It is not uncommon to discover after the purchase that an Italian property is wholly or partially illegal. On top of this, many legally built properties in Italy harbour significant liabilities that are not compliant with the law.

Mistakes when buying a property in Italy can become costly, time-consuming and heartbreaking to rectify. Issues have the potential to derail plans for a new life or impact the saleability of Italian investments later on.

The best way to protect yourself against problems is to engage a specialist Italian property lawyer

This will ensure you stay safe when buying an Italian property. In addition, it often saves time and money. An Italian property lawyer will be able advise and guide you through the whole journey.

During the first stage for example. A buyer may sign a brokerage agreement with a real estate agent that does not deal with a number of legal problems. In the absence of an agreement to the contrary, the buyer may therefore become liable to pay a brokerage commission even if a sale does not take place. If a buyer uses multiple estate agents, they may find themselves paying more than one brokerage commission.

In addition to explaining the ramifications of estate agency contracts, a lawyer can manage negotiations on your behalf. On the one hand with the estate agent regarding their fees and on the other hand, terms and conditions. For instance, what happens if the vendor withdraws the property from the market, or can’t deliver a title to sell the property?

A lawyer can also advise on issues such as tax implications of a cross-­border transaction.

The preliminary contract is the single most important document in the transaction

Estate agents often use standard forms for preliminary contracts. Although standard printed forms are useful, it can be helpful to consult a lawyer for explanation and clarification. You may need to make changes or add conditions to the form to reflect your personal circumstances.

The preliminary contract should also contain conditions of your purchase.

– Existing alterations, additions, extensions. Are they legal?

– If you plan to change the property, can you do this lawfully?

– Do you need a survey?
What happens if the survey finds termites, asbestos, radon, or lead-­based paint or  hazardous waste on the land?

– What are the legal consequences if completion is delayed? And, what happens to the deposits in this case? This question raises related questions: Who holds the deposits? The vendor, the estate agent, a lawyer or a notary?

Again, it is important to remember that pre-printed contract forms are generally inadequate to incorporate conditions to which your purchase may be subject.

The onus is on the buyer to conduct thorough due diligence

An Italian property lawyer can execute a title search, explain the title and determine whether the legal description is correct and whether there are problems with co-­owners or previous owners. A lawyer can also check for mortgages and debts on the property. In addition, a lawyer can check municipal records and land registers for property plans.

It is vital to check that the plans match the property footprint and that the whole property has planning permission. A certificate of habitability is also important.

An Italian property lawyer can explain the effect of any easements and agreements or restrictions imposed by a prior owner, and whether there are any legal restrictions which will impair your ability to sell the property later on.

The title search does not tell the buyer anything about existing and prospective plans in the area. Having your own Italian legal advisor will enable you to obtain this type of information more accurately, thoroughly and easily than trying to do it yourself.

Signing the deed of sale is the most important event in the purchase and sale transaction

When you purchase a property in Italy you must do so through a notary. A notary is a government official. Their main tasks are to ensure that all documents are genuine, draw up the deed of sale and collect tax and fees.

Although the role of notary is to ensure that the transaction meets all legal requirements, this does not mean that the notary is acting on the buyer’s behalf to ensure the buyer gets the best deal. Furthermore, contrary to what many people believe, the notary cannot guarantee the absence of legal issues such as illegal work and features (abusivi). While a notary will check planning permission for example, a notary will not make a site inspection of the property to ensure the absence of illegal work. An Italian property lawyer will work on your behalf to guarantee that your property conforms to Italian building legislation and regulations.

Having your own Italian property lawyer is helpful in explaining the nature, amount, and fairness of closing costs. A lawyer can assure that the deed of sale is correct and explain it to the buyer. The notary will in fact require the presence of a translator at closing if buyers are not fluent Italian speakers. So having an Italian lawyer who speaks your language makes sense. A buyer benefits not only from translation ability, but also legal know-how and expertise.

Those present at the closing often include the buyer/s and seller/s, their respective lawyers, and the real estate agent. There may be last minute disputes about delivering possession and personal property or the adjustment of various costs. If you are the only person there without a lawyer, your rights may be at risk.

Choose your own Italian property lawyer

Perhaps the most important reason to have your own lawyer is conflicting interests of the parties. Throughout the process, the buyer’s and seller’s interests can be at odds with each other, and even with those of professionals involved in the sale. The estate agent generally serves the seller. Both seller and estate agent want to see the deal go through, since that is how they will make money.

It may seem cost effective to use the services of a solicitor recommended by an agent or the seller. However, to avoid any conflict of interest, you should choose your own lawyer to act in your interests and your interests only.

Finally …

At De Tullio Law Firm, we specialise in property law. We have decades of experience advising clients on buying property in Italy. Our team of solicitors, associates and professionals combine international legal experience and knowledge with local know-how. We pride ourselves on our personal service so that you can make your plans a reality without any hidden surprises.

Let us guide and protect you through the whole process of buying an Italian property, as well as advise you on issues such as how owning property in Italy will impact your tax affairs and inheritance plans and other important issues that you should think about to safeguard your family assets long term.

We can also help you with Italian residence and other paperwork if you plan to live in Italy. If you are unable to reach Italy in person, we can act on your behalf by organising a power of attorney for you.

Get in touch.

 

For more information about the Italian property purchasing process, you might like to read our guide.  We also have a range of useful property-buying info videos.