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Italian Real Estate Agency Services.

Who Is liable for Legal And Technical Checks on Property in Italy?

The first step in purchasing a home in Italy is to look for properties that you Italian Real Estate Agency Serviceslike and it can be useful to get the  support of a licensed real estate agent.

The main task of the real estate agent is to facilitate the real estate transaction by informing both parties, the seller and the buyer, of details which may be relevant.

However, it must be noted that Italian real estate agents are not required to undertake any technical or legal searches (due diligence) related to the property. Clearly this lack of due diligence could impact either the transaction itself or, further down the line, during your ownership or if you want to sell the property.

Real estate agents in Italy are required to disclose information based on the principles of a professional duty of care. This implies an obligation to provide information on any known circumstances, or issues that potential buyers should know about. To impart incorrect or non-verified information to an interested party is illegal.

A specific case involving the duty of care of an estate agency duty occurred at the Milan Court of Appeal in 2012: ruling no. 307 filed on 27th  January 2012.

A real estate agency was sued by clients on the grounds that the agent had failed to  provide relevant information on adverse encumbrances on a property the clients wished to purchase.

The clients sued the real estate agent to obtain a refund of the commission they had paid to the agency amounting to Euro 6,000. The clients maintained that the real estate agency had been derelict in their duty of care by not communicating the existence of two mortgage transcriptions on the property they were purchasing. The court dismissed the case.

In support of their decision, the Court specified that legal searches were not part of the ordinary real estate agent’s task, that is to say, investigations of a technical-legal nature, such as land registry and mortgage searches on the property do not form part of a real estate agent’s remit.

Although Article 1759 of the Italian Civil Code requires real estate agents to notify parties of all known circumstances concerning the real estate transaction, there was no evidence in this case, that the real estate agent had, at the time of the reservation offer or during the drafting of the preliminary deed of sale, any knowledge of the encumbrances on the property in question. The real estate agency maintained that they had only become aware of the mortgage transcriptions after one of the clients told them. They had learned about the encumbrances from the Notary Public at the signing of the deed of sale.

The court therefore ruled that the real estate agency had not wilfully omitted to advise the clients about the adverse encumbrances, and as such, responsibility could not be attributed to the real estate agent.

Pursuant to Article 1176 of the Italian Civil Code, the execution of technical and legal searches related to a property is not part of the agent’s professional duty of care. Estate agents are neither required by law, nor qualified, to conduct in-depth due diligence.  Anything pertaining to the legal and technical due diligence of Italian property purchases needs to be handled by legal and technical professionals.

While the support of a real estate agent facilitates the process in terms of your search for an Italian property, when it comes to making sure your purchase of an Italian property is secure, the technical and legal aspects of due diligence must be handled by experienced lawyers and surveyors.

When buying or selling a property at home, most people wouldn’t dream of entering into a transaction without the assistance of qualified professionals. Yet in Italy, many foreign buyers decide not to instruct professionals and instead rely on an estate agent to handle it.

The reality is that undertaking a property transaction in Italy is one of the most complex and expensive transactions that you will may ever make. In addition, there are the complications of a, perhaps unfamiliar, foreign language with lots of legal jargon, a completely different legal system, tax and administrative procedures.

Essentially, in order to avoid any problems and before you sign any paperwork, the need for an experienced, independent lawyer is far greater for an overseas transaction than when buying property at home.

De Tullio Law firm is specialised in cross-border residential and commercial property transactions in Italy. We would always recommend that before signing any paperwork with an estate agent you seek independent legal advice.

Get in touch if you feel unsure about anything property-related and need advice: