Force majeure clause in Italian contracts. COVID-19

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Force Majeure: “Act of God”

Does the  COVID-19 pandemic trigger a Force Majeure Clause in Italian Property Sales and Purchasing Contracts?

Also known as an “Act of God”, a Force Majeure clause in contracts is widely known, yet narrowly understood.

In general, a Force Majeure is an event that is beyond the control of either party to a contract. It prevents or hinder the performance of the contract.

Illness is a very unusual reason for causing a Force Majeure in contracts. However, the Coronavirus pandemic is not a common ailment. It has confined entire countries and restricted peoples’ movement and travel.

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Recent disruptions have seen an increased number of calls from clients concerned about their responsibilities and rights regarding Italian property contracts.

A particularly frequent question is whether a Force Majeure clause exonerates vendors and buyers from performing contractual obligations?

What happens to Italian property contracts during Coronavirus restrictions?

Art. 91, 17 March 2020 n. 18 (“Decreto Cura Italia”) legislation deals with the liabilities for non-performance of a contract.

A party to a contract, who fails to perform contractual obligations shall be liable to pay damages unless it can be proved that the non-performance was caused by circumstances resulting from a cause beyond control (i.e. a Force Majeure).

The same law includes containment measures that limit movement, designed to prevent the spread of the Coronavirus disease. Failure to comply with these measures is a criminal offence under Article 650 of the Penal Code.

The issue of containment measures, and the restriction of movement, represent an obstacle in terms of completion of a Deed of Sale. Not only for those who may need to move from one Italian Municipality to another, but above all for people involved in cross-border real estate transactions.

Such containment measures may make it difficult and/or impossible to complete a Deed of Sale with a notary public.

Remedies

Extensions

Parties may be able to negotiate an extension to the contractual time limit for completion of a Deed of Sale.

Non-authenticated private deed

In order to avoid missing a contractual deadline, parties can also complete the Deed of Sale by means of a non-authenticated private deed.

In line with art. 1350 of the Italian Civil Code, parties will need to repeat the transcription and authentication process at an ulterior date. This will be possible once restrictions ease. Failure to have a Deed of Sale authenticated and transcribed later could render the Deed of Sale null and void.

Power of Attorney

By conferring a Limited Power of Attorney,  you can have someone act on your behalf in Italy. If you opt for a Power of Attorney, it is important that you entrust your affairs to a reliable and competent person such as a lawyer. Appointing someone who does not have enough experience or with whom there may be a conflict of interests, is highly inadvisable.

Use a holding account to protect your property payment

Our advice would be that you only use a bonded holding account to protect the balance of your payment for a property sale in Italy. Not just during the pandemic but always.  Known as a, “Deposito Prezzo” in Italian. You can arrange this with a notary public, who will act as guarantor for your transaction.

I am negotiating a Preliminary Contract for a property. Can I get a force majeure clause?

If you are in the process of negotiating the sale or purchase of a property in Italy, you should make sure that you include a “Force Majeure” clause in the Preliminary Contract. The clause should take into account a wide range of events. Not only natural disasters and catastrophic events but also disease epidemics and pandemics.

Finally …

If you are buying a property and need legal advice because of the pandemic, our legal professionals are here to provide help and guidance.

Please contact De Tullio Law Firm at the following email address info@detulliolawfirm.com

You may also be interested in our article about conferring a Power of Attorney. You may also like our info videos.

Italian Real Estate Agency Services

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An Italian real estate agency’s role is to connect vendors with buyers

The first step in purchasing a home in Italy is to look for properties that you like. For this, services of a licensed Italian real estate agency provide invaluable support.

An Italian real estate agency will facilitate property transactions. The agency will provide relevant information to buyers and vendors. However, Italian real estate agencies have no legal obligation to undertake searches of a technical or legal nature (due diligence).

Clearly, a lack of due diligence could in the first instance impact the transaction itself. Further down the line, if you didn’t conduct due diligence prior to buying, you might run into issues. You may discover the property lacks of full or partial planning permission or that renovations do not conform with building regulations. Crucially, a lack of due diligence may effect the future saleability of your property.

Italian real estate agencies in Italy are of course required to disclose information based on the principles of a professional duty of care. This implies an obligation to provide information on any circumstances or issues that potential buyers should know about. Imparting incorrect or false information to an interested party is illegal.

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Italian real estate agencies have a duty of care

In 2012, the  Milan Court of Appeal heard a case regarding an estate agency’s duty of care: ruling no. 307 filed on 27th  January 2012.

Clients of a real estate agency took them to court 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 for a refund of the €6,000 commission fee they had paid to the agency. They argued that the real estate agency had been derelict in their duty of care. The clients claimed that the real estate agency should have communicated the existence of two mortgage transcriptions on the property. They maintained they would not have signed a reservation offer or a preliminary contract had they known. Signing the latter triggered the commission payment to the real estate agent.

The court dismissed the case.

The onus is on potential buyers to conduct pre-purchase due diligence

In support of the court decision, the judge stated that legal searches did not form part of a real estate agent’s responsibilities. In other words, technical and legal investigations, including land registry, planning, zoning and mortgage searches on a property do not form part of a real estate agent’s remit.

What does the law say about the scope of Italian real estate agency services?

Article 1759 of the Italian Civil Code requires real estate agents to notify parties of all known circumstances concerning a property transaction.

In this case,  the real estate agency had done this. They argued that as they had no prior knowledge of the encumbrances, they could not have informed the clients of their existence. The real estate agency had only become aware of the mortgage transcriptions when the clients informed them. The clients had only learned of the encumbrances when they were about to complete the sale.

There was no evidence that the real estate agency had any knowledge of the mortgages. The judge ruled they had not wilfully omitted to advise the clients about the adverse encumbrances. The responsibility for ascertaining this information did not lie with the real estate agent but, with the purchaser.

Article 1176 of the Italian Civil Code states that performance of checks and searches related to a property is not part of the agent’s professional duty of care. Furthermore, estate agents are neither legally responsible, nor qualified, to conduct in-depth due diligence.

Anything pertaining to the legal and technical due diligence of Italian property purchases should therefore be handled by legal and technical professionals.

Real estate agents facilitate the search for an Italian property

However, Italian real estate agents do not provide due diligence services.

When buying or selling a property at home, most people wouldn’t dream of entering into a transaction without the assistance of a lawyer and a surveyor. These are the professionals who conduct legal and technical searches and checks. Yet all too often, we meet foreign buyers who have decided to rely on what an estate agent tells them about a property.

Finally …

The reality is that a property transaction in Italy is an investment. It can quickly become costly – both financially and emotionally if things go wrong. In addition, there are the complexities of the Italian legal, tax and administrative systems. On top of this, there are the language barriers.

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

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

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

 

You may also be interested in How to get a mortgage in Italy

Your Overseas Home Property Seminar

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Your Overseas Home Property events help people buy and move abroad safely

Property Guides and The Overseas Guides Company (OGC) regularly run Your Overseas Home Property seminars. These are free events to help people buy property and move abroad safely and risk-free.

Kim Brown founded OGC some 15 years ago. Kim’s parents had bought a home in Cyprus in 2004. However, without access to the right information and with some contacts who turned out to be untrustworthy, it sadly ended unhappily.

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Your Overseas Home Property seminars offer high-quality, carefully researched guidance

Seeing the impact on her parents, Kim was determined not to let this happen to anyone else – and so she set up OGC to provide high-quality, carefully researched guidance for anyone buying their dream home abroad.

Kim soon realised that in-depth information alone was just the first step.
“People also needed expert, trustworthy contacts to help them act on that information and turn their dream into reality. We now call these the ‘Golden Three’: your estate agent, your lawyer and your currency specialist”.

OGC has developed an extensive network of trustworthy experts across fourteen countries. They are all tried and tested to ensure the very best service.

Your Overseas Home Property Seminars started in 2017. Since then, a number of events have taken place around the UK. They have helped many people to buy safely overseas.

Expertise

Experts at the Your Overseas Home Property Seminar include leading Italian estate agents, currency, Italian law, finance and removals experts.

As well as seeing plenty of Italian homes, you have the time and opportunity to discuss your personal requirements and get advice on all aspects of buying a property in Italy.

Finally …

We have over 55 years of experience managing cross border property and inheritance matters throughout Italy. If you would like to discuss your personal situation but are unable to attend a Your Overseas Home event, why not get in touch with us today?

 

You may also be interested in our Guide To Buying Property in Italy.

Demolition order Italian Property. Voices of Experience

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Voices of Experience: “I’m fighting a demolition order on my Italian Property”

Involved in an ongoing legal case to get a demolition order reversed, our client offers insights and advice on how to safely buy an Italian property.

If you are facing a similar situation and need help or if you have a story you would like to share, please get in touch with us. You might also be interested in reading our practical guides and checklists.

“They say hindsight is a wonderful thing. If I could turn back time and buy my Italian property all over again, I would do it completely differently. The following explains why. I hope that what I have learnt will help anyone thinking of buying a property in Italy”.

How to avoid a demolition order? Take care when buying property in Italy

The fact is that buying Italian property can be risky. A 2017 report by the Office for Italian Statistics (ISTAT), estimates that nationally, some 20% of Italian properties are illegal builds – more in the south of the country. On top of this, many legally built properties in Italy harbour significant liabilities that are not compliant with the law.

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All this lies ready to catch out unwary purchasers, whose lives can become a nightmare. In the worst case, you could, like me, find yourself facing a demolition order and then find yourself investing a significant amount of money to fix problems. So, when buying property in Italy, you need to be very careful.

Back in 2005, I purchased a villa with a pool on the outskirts of a beautiful small town in southern Italy. It was love at first sight, the Italian dream. Admittedly, something of an impulse purchase. At the time, I asked the estate agent if there were any issues with the property and whether I needed to get some independent legal advice or a survey. He said not, so I didn’t. The sale went through very quickly and smoothly. I used the same notary as the vendor and estate agent and within weeks I was the proud owner of the villa.

A demolition order makes an Italian property unsellable

In 2015, I developed a few health issues. I decided to downsize and put my villa on the market.

Enquiries slowly trickled in and occasionally the estate agent brought potential buyers to have a look at the place. One couple, who really liked the property, hired a lawyer to check all the details. To my horror, they discovered that the property had no planning permission whatsoever. I had no idea that for a decade, I’d owned an illegally built property. Obviously, the couple’s lawyer warned them off buying the property.

At the time, I thought it must be some sort of mistake; an oversight at the local authority or a problem with the land registry. After all, how could the previous owners sell a property without planning permission? However, when I went to my local town hall to investigate, it transpired this was the case. Worse was to come.

To cut a long story short, after a protracted and very complex process, the whole situation eventually led to the local authority issuing a demolition order on my villa in 2018. I can’t tell you how many sleepless nights this has caused me.

I have a house that is unsellable and am having to spend thousands of Euros to get the demolition order reversed and remedy the situation so that I can at last sell up and move on with my life.

To buy property safely in Italy, exercise more caution than you would at home

Buying property in Italy can be safe. However, to buy a property that is both fully legally compliant and to make sure you aren’t taking on any legal liabilities, you need to exercise far greater care than you would at home.

Illegal buildings are not unusual in Italy. They are ticking time bombs potentially subject to a demolition order

There was a lack of a cohesive approach to building controls and regulations during the Italian building-boom of the 1970s and 80s. Local authorities, overwhelmed by the sheer volume of construction, were unable to check buildings properly.

Often illegal properties in the countryside started out as summer homes. They may be on land that has no zoning permission for buildings. The owners may have failed to get planning permission for the property when they built, extended or renovated it. In addition, the property may not comply with  building controls or building regulations. They may lack damp proofing, insulation and, often, any logical room distribution, let alone solid foundations.

Often an illegal Italian property doesn’t get demolished even though illegalities are blatantly obvious to local authorities.  There are many reasons for this including an erratic attitude to enforcing the law in Italy, local vested interests and even corruption. Illegal properties can be likened to a cash cow. Penalties, fines and demolition orders can suddenly be handed out, as and when a local authority needs money.

Because of illegal construction, many areas in the countryside have sprung up. These areas usually lack primary services such as mains electricity, water, sewage and telephone lines. They are prime candidates for infrastructure projects when local authorities decide to formalise these areas. Naturally, householders will bear the costs.

However, even in urban areas there are properties that should make you wary. Properties too close to a road or a beach or, in the case of apartment blocks, common areas that breach building regulations. Some villas may extend beyond their allowable habitable area. These type of problems are ticking time bombs.

Seek professional help when buying in Italy

Foreign nationals buying property in Italy can be incredibly naïve. Like me, many people do not use a lawyer to manage checks and conveyancing when buying an Italian property. Believe me, this can expose you to abuse or lead to the possible loss of your property or at least significant costs.

Estate Agents

Make sure your estate agent has a licence. Estate agents offer great support when it comes to looking for properties. However, they may not know everything about a property when it comes to any problems or liabilities. Plus they have a vested interest in selling the property. Their fees are contingent on selling so they don’t want a buyer to pull out of the purchase. When I bought my property in Italy, I asked the estate agent if I needed a lawyer. The estate agent told me I didn’t. Talk about innocents abroad! Start with the premise that the property you are looking at has a problem.

Get a lawyer

Appoint a lawyer before you even start to look at any property. And, choose your own lawyer rather than one your estate agent or the vendor recommends. Make sure that your lawyer understands property law, speaks your language, is registered with the Italian Law Association and has insurance.

Make sure your lawyer provides a written due diligence report and checks who owns the property and that there aren’t any debts such as mortgages on the property.

The report should also include all the details of the property and surrounding area. Land registry details should match property deeds.

Have a survey done

Is the structure sound? Do property boundaries in the land registry match those you can see from walls and fences? A qualified surveyor can confirm all this as well as checking whether there are any alterations to the property including out buildings.

Always get a check on the exact description of the property (existing bathrooms, bedrooms, kitchen(s), sitting rooms, conservatories, garages, out buildings, pool etc.) with your lawyer before signing any contract. To ensure there’s no illegal building work, it’s essential that all the details match the land registry.

If in doubt, don’t!

Don’t hurry and never sign anything without your lawyer’s approval.  Remember it is always better to lose out on a property rather than buy something illegal that risks risks fines or demolition.

Of course, the above does not include everything that you should do. The more information you gather, the easier it will be to make an informed decision as to whether or not to buy a property.

If you follow the guidelines above, I hope you will avoid all the costly worries I am currently experiencing. Be careless or too credulous and sadly, your Italian dream could turn into a nightmare some time down the line.

Finally …

De Tullio Law Firm specialises in cross-border property and inheritance matters throughout Italy. If you are buying an Italian property and need advice or support or, if you would like to discuss a matter with us, we are here to help. Get in touch.

 

You may also be interested in Changing layout of internal spaces does not require building permission

Italian Properties for €1. First City To Offer The Scheme

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€1 properties in Taranto, Puglia

Following the success of Italian hill-towns and villages, Taranto is now offering €1 properties for sale.

Taranto, a city that sits on an island between a lagoon and the open sea in the region of Puglia is offering to sell some of its abandoned palazzi through a €1 scheme.

Taranto’s city council plans to start by offering five properties for sale, with the hope that if the scheme is a success, the project will expand.

The hope is to breathe new life into Taranto’s run down but picturesque old town by attracting investment which will develop the historic centre of Taranto.

€1 is the opening bid at auction

As with all 1 Euro house schemes around Italy, sales take place in public auction (vendita con incanto).

In Italy auctions are not common. There are no legal packs, which contain essential information including property titles and searches. Detailed property information and planning permission are therefore not available. Because you cannot tell anything about the background to a property just from looking at photos, you are responsible for conducting property-related searches.

To avoid buying what seems like a bargain but subsequently turns out to be a money pit, it is advisable that you go and inspect the property and check the local land registry. before you decide to make a bid. Obviously, this may not be possible because of time constraints and it can become costly. As you may not speak fluent Italian or have the expertise to assess what you are bidding for, we would recommend that you seek independent legal advice and professional expertise in Italy to evaluate the property before you submit a bid.

Terms and conditions apply to all Italian €1 property schemes

In fact, properties for €1 usually cost at least €20.000 at auction. On top of this, there is the legal requirement to renovate within a specific time frame. Italian properties for €1 schemes therefore generally end up costing at least €50.000.

In the case of Taranto, owners will be expected to foot the bill of restoring the properties. This could run to many of thousands of euros. Owners will have to present a restoration plan within two months of acquiring the building. In addition, owners will have to occupy the properties. The latter is a condition to stop speculators renovating and selling on these properties.

Finally …

There are plenty of other reasonably-priced houses in Italy without the terms and conditions attached to €1 property schemes. These properties may be a better option for you.

If you are interested in buying Italian properties for €1 or any other type of property in Italy, we recommend you seek independent legal advice before committing yourself. We are here to help, please get in touch.

 

You may also be interested in reading more about 1 euro houses in Italy.

You may also like to watch our useful info videos about Italian property law.

Real Estate in Italy: Reservation Offer

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Real estate contract law in Italy

If you are considering buying real estate in Italy, Italian civil code in art. 1470 governs sales and purchase contracts for Italian real estate.

A contract is a consensual transactional instrument through which one party (the vendor) transfers the ownership, or a right, to an assets to another party (the buyer).

Contractually therefore, a buyer is under obligation to pay the agreed fee to the vendor for an asset or right.

Acceptance of a reservation offer for real estate in Italy

If you are not familiar with the legal and financial implications of the three-step property purchase process in Italy, you may wish to read our guide to buying property in Italy.

The first step to purchasing a property in Italy is a reservation offer. 

In effect, when buyers find an Italian property they like, they make a written offer on the property. Amongst other things, the reservation offer identifies the property in question and makes a price offer.

For the offer to be valid, first a vendor must accept the reservation offer in writing. This acceptance must then reach the potential buyer within a time frame stipulated in the reservation offer.

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Contractual obligations of a reservation offer

Until written acceptance of a reservation offer reaches potential buyers, no contractual obligation exists between the parties. In other words, the reservation offer is revocable.

However, buyers may stipulate they wish to keep their reservation offer firm for a specified amount of time. If a vendor accepts the time frame, it means the vendor has an obligation to remove the property from the market. Because the vendor will not be able to market the property for the duration, the offer is known as, an irrevocable reservation offer.

Italian real estate agents: roles and fees

As in other countries, vendors in Italy often put their property in the hands of a real estate agency. The role of Italian real estate agents is to market the property to potential buyers. When a potential buyer makes an offer for a property, the real estate agent passes the offer on to the vendor. The estate agent does this through a reservation offer.

At this point, vendor and buyer are usually looking to move towards the second stage of the Italian purchasing process. This is where both parties sign a preliminary contract. If the vendor does not progress the sale to a preliminary contract stage, the reservation offer lapses and neither party has any obligation towards each other.

At the reservation offer stage, another aspect to consider is the estate agency commission. It is always worth asking if a real estate agent’s fees are negotiable. Generally however, commission ranges from 3% to 8% of the property sale price. Some agencies work on a fixed fee. To put that another way, fees are based on a percentage of the total sale price.

A reservation offer may not end in a sale

Between the reservation offer and signing a preliminary contract, buyers should carry out property checks and searches (due diligence). This may highlight problems or irregularities related to the property. These issues may subsequently lead to buyers withdrawing their offer.

The acceptance of a reservation offer between the seller and buyer is not therefore a guarantee it will end in a sale.

You should therefore be wary if the estate agency requests their commission at this stage.

At what stage should you pay Italian estate agency commission?

To clarify when exactly estate agents should receive their commission, a 2010 Supreme Court case is pertinent. In order for a real estate agent to be entitled to their fee, it is not sufficient that a broker merely puts vendors and buyers in contact. It is not enough to hope that the transaction concludes successfully.

In other words, commission is only payable to a real estate agent once a preliminary contract is in place between the vendor and buyer.

Difficulties linked to successful completion of a real estate transaction arise because there are so many pitfalls between the reservation offer and preliminary contract.

Contractual risks of real estate in Italy

To avoid risks, it is wise to seek independent legal advice before you sign any paperwork relating to buying property in Italy. To avoid any conflicts of interest, make sure you choose your own lawyer rather than a lawyer recommended by an estate agent or a vendor.

Your lawyer will guide you step by step through the intricacies of the Italian property purchase process.

Finally …

De Tullio Law Firm is an Italian Inheritance and Real Estate Law Firm present throughout Italy. We specialise in cross-border residential and commercial property transactions and inheritance matters in Italy. Should you need any further clarification concerning this or other property-related topics, De Tullio Law Firm will be happy to help. Get in touch with us at: info@detulliolawfirm.com.

You may also be interested in Insider Tips for Buying A Property in Italy. You may also like to watch our info videos.

Buying a house in Italy: Italian Deed of Sale

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Buying a house in Italy. What is a deed of sale?

An Italian deed of sale is the final stage of buying a house in Italy. It completes your property purchase. If you are not familiar with the Italian property purchasing process, you may like to read our free to download guide.

Buying and selling property in Italy requires the assistance of a Notary Public (notaio).

According to Italian law, a notary must remain impartial towards all parties involved in a property transaction.

Notaries work for the Italian State. Their services are not at all the same as engaging your own lawyer to guide you through the process.

Who is liable for detailed property checks and searches prior to completing a deed of sale?

You may think it is the responsibility of your notary to check these matters, however that is absolutely not the case.

Caveat emptor – buyer beware!

You, as the buyer, are responsible for ensuring that you know exactly what you are buying.

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The importance of a certificate of habitability

There are some peculiarities involved in Italian property transactions. One of these oddities relates to requirements and details in a certificate of habitability (certificato di abitabilità).

A certificate of habitability is a document attesting a property is fit for purpose. That is to say, the property meets all health, safety and planning regulations and requirements. It is also a useful document for getting utility connections (power, water, etc.). You will also need a certificate of habitability if you need a mortgage, let your property or when you sell up.

When buying a house in Italy it is crucial to check that a certificate of habitability pertains to the entire property, not just part of it

Take for example the case of Mr and Mrs Smith, who purchased a second home in the hills of the Abruzzo countryside. One of the features that attracted the Smiths to the property was the potential to transform the spacious attic into additional accommodation.

According to the deed of sale, the real estate had a certificate of habitability. The Smiths assumed that their notary had checked the details of the certificate. When the Smiths started to plan their project with a local architect, they discovered that the attic was not part of the certificate of habitability. Where did they stand from a legal point of view?

Limitations and obligations of a notary regarding an Italian deed of sale

You may think the Smiths’ is an unusual situation, however over the years, there have been numerous similar cases. Many of these have landed in the Italian courts.

In one case, the buyers of a property sued a notary for professional failure to verify whether a certificate of habitability pertained to the whole property.

The court rejected any professional liability claim against the notary. The buyers appealed, but to no avail. The judgment stated that:

“a notary’s liability is limited to obtaining a vendor’s declaration that the property is fit for purpose”.

A notary is not responsible for checking property details

The buyers further appealed in the Supreme Court. They argued that a notary, in fulfilling his role as guarantor to the certainty and seriousness of property purchase, has a legal obligation to take all necessary steps to ensure that a property purchase is safe and secure.

The Supreme Court rejected the buyers’ appeal. The ruling established precise boundaries regarding a notary’s professional responsibilities. The ruling stated that a notary must conduct land registry and mortgage searches to ensure there are no legal impediments and/or encumbrances.

Where issues come to light, the notary has a duty to inform parties to the transaction. A notary’s obligations cannot however extend to ascertaining, in practice, the existence of qualities that do not affect the marketability of the property.

In other words, a notary must merely verify the existence of a certificate of habitability. The technicalities and details of what a certificate covers are beyond the notary’s remit and liability.

What if there is no certificate of habitability?

Where a property completely lacks a certificate of habitability, the notary must inform the parties of this and outline legal consequences.

If a property doesn’t have a certificate of habitability, it is still marketable. A certificate of habitability endorses that there are no issues that compromise health and safety. However the absence of a certificate is neither an impediment to the sale or purchase of property nor does it affect the validity of a deed of sale.

The notary will however need to stipulate that the buyer agrees to purchase despite the lack of certificate in the deed of sale. The notary may also add a clause designating one of the parties to the transaction as being responsible for obtaining the relevant certificate.

Planning permission, other checks and searches

It is also worth underlining the aspect of planning permission checks. A notary must verify the presence of planning permission for a property. However, a notary is not responsible for ensuring that the property actually complies with the planning permission.

As with the certificate of habitability and other aspects, the onus is on the buyer to conduct searches relating to planning.

Due diligence is key before you sign an Italian deed of sale. Failure to check everything thoroughly can lead to expense and pain later on. It may also impact future saleability of your Italian property.

Finally …

Liability related to an Italian deed of sale, involving not only the selling and buying parties but also a notary public, represents a complex legal matter which can have far-reaching consequences.

For many, buying a property in Italy represents a huge investment. For this reason, it is of the utmost importance to engage an independent lawyer for guidance and to review the Italian deed of sale before you sign it. Such a review is typically inexpensive and serves to make sure your interests are protected.

If you are buying a property in Italy, you should always seek independent legal advice. Should you need further information concerning a deed of sale, please contact our legal professionals at De Tullio Law Firm.

You may also be interested in Estate agents are neither lawyers nor independent. We are both.

Renovating a house in Italy: Safety Requirements

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Renovating a house in Italy. Health and safety law

Who is liable for compliance with safety requirements when renovating a house in Italy?

In the case of even minor construction work the, “works manager” is responsible for safety. This is usually an architect, engineer or designer. However, if the owner of a property directly procures the services of a worker, the homeowner is acting as the works manager.

This means that the homeowner is responsible for safety. Likewise if there is an accident, the homeowner is liable to criminal and civil consequences.

Imagine you hire a plasterer to render a wall and the plasterer falls off a ladder. Or, you find an electrician to rewire your property and the electrician gets electrocuted.

You, as the homeowner, are liable. Even if you are not around at the time of the accident. As the legal owner of the property, in the eyes of the law, you are the employer of the injured worker.

Get Your FREE Guide to Building and Renovating Property in Italy

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The risk of criminal and civil prosecution

Your liability for the accident is not only of a criminal nature, for culpable injuries caused to the worker, but also of a civil nature.

In other words, you may be liable to pay compensation. Compensation for a broken limb can amount to several thousand euros. In a worst-case scenario, compensation may be enough to see your property seized.

This is a very intricate legal issue based on technicalities regulated by Italian law. If you are planning refurbishment work on your property in Italy, make sure you meet  safety requirements.

Homeowner liabilities

When renovating a house in Italy, you are legally responsible for ensuring safety requirements.

Italian law takes the view that anyone regarded as, “non-professional”, such as a homeowner, who procures the services of a third party to carry out any type of home improvement, is responsible for ensuring that workers operate in accordance with health and safety legislation.

Safety requirements. A case study

Recently, the Supreme Court examined an appeal filed by a homeowner plaintiff who had commissioned a construction company to paint the exterior walls of a cottage. During the work, a painter fell through a hole in the paving. The painter fell several metres into the basement and tragically later died. The hole that caused the accident had previously been covered with boards. However, the boards had been removed by another worker and replaced with polystyrene, which was not strong enough to bear the weight of the painter.

The court of appeal upheld previous rulings which established that the homeowner had a duty of care in relation to the execution of the contract. In this case, the court identified several failures. In the first instance, the absence of a risk assessment plan. Secondly, a lack of maintenance on walkway around the cottage and risks posed by the opening into the basement. Thirdly the court considered that there had been a failure to supervise and inform workers at the property.

Safety requirements are an employer’s responsibility when renovating a house in Italy

The court found the homeowner at fault for these failures. Safety obligations are the exclusive competence of an employer, who in this case was the homeowner. In effect, the homeowner was acting as the painter’s employer. While the work was of a “domestic” nature, the court found that the homeowner was not exempt from performing the duties of works manager. In other words the accident occurred because of the homeowner’s failure to take responsibility for his employee’s safety. And the homeowner’s negligence to act in the role as designated works manager.

In cases such as this, it is, therefore, crucial to underline the homeowner’s obligation to point out any dangers on site and wherever possible, to provide for their elimination before work starts. Unless a homeowner can prove they exercised a duty of care and took all measures to provide a safe working environment, they will be held liable.

Health and safety requirements in Italian building contracts

When a homeowner engages a contractor, it is important to have a written contract. This should indicate that compliance with safety regulations is the contractor’s responsibility. This way it becomes clear, from a legal point of view, that the contractor is responsible for safety on home renovations in Italy.

Finally …

Whether you are building a new property in Italy, or renovating an existing Italian property, having the right building contract is vital to ensure that everyone involved knows their rights and responsibilities.

De Tullio Law Firm is a legal firm present throughout Italy. We have over 55 years of specialist experience dealing with issues related to property, construction and renovation matters. If you are thinking of undertaking building or refurbishment on your property in Italy, or if you are in a difficult situation concerning liabilities and safety requirements through refurbishment work, we are here to help. Get in touch with us at: info@detulliolawfirm.com

 

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De Tullio Law Firm in Fortune Italia Magazine

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De Tullio Law Firm and luxury real estate in Italy

In the April 2019 edition of Fortune Italia Magazine, De Tullio Law Firm contributed to a discussion about the state of the luxury real estate market in Italy.

A world apart

The luxury real estate market in Italy is booming – indifferent to market fluctuations. Who buys luxury properties and furnishings?

Italy’s Luxury real estate market sector “is less exposed than other property segments to economic conditions. The uniqueness of the Italian offer, which is inextricably linked to our architectural, landscape and cultural heritage, represents a strong element of attraction”, says Giandomenico De Tullio, Managing Partner at De Tullio Law Firm. The company provides legal services in the Italian luxury real estate market – mainly serving US and UK clients.

Italy’s luxury property market is particularly healthy. Compared to the same period in 2017, the first half of 2018 saw an increase of 26.73% in real estate transactions in excess of 900 thousand euros. Real estate of more than one million euros saw 1,028 properties sold compared to 865 in the previous year. This represents an increase of 18.84%.

De Tullio Law Firm: we are specialists for cross border property law throughout Italy

Generally, we are talking about properties that mainly appeal to international clients, which De Tullio calls, ‘High Net Worth Individuals’. ” This is a clientele with high expectations that demand high levels of competence and professionalism”.

Choosing a property

In the main, investors are foreign so they often need a guide. Perhaps they don’t know Italy very well, or are unfamiliar with the dynamics of its real estate market.

Lionard, is one of the most important players at national level in the luxury real estate sector. The company is involved in the buying and selling process. They have a real estate portfolio of 13.32 billion euros. The average value of real estate for sale is 5.01 million euros.

Lionard has bases in Florence, Milan and – soon – Rome.

The company currently represents 51% of Italian properties with a value of more than 3 million euros. “The real estate market historically follows the macro-economic trend of the world’s major markets,” says Ian Heath, real estate advisor at Lionard. “For this reason, the sector has also faced and suffered from the economic crisis over the past decade. However, the luxury real estate segment, in terms of the type of clientele and internationality of the audience it addresses, is able to offer growth beyond what is happening on a local economic level”.

A growth that Lionard capitalises on with satisfactory results. “In terms of real estate portfolio, we are the first real estate operator to have over 2,500 properties offered for sale directly by owners. With regards to the company’s balance sheet, we were the first among Italian luxury sector real estate operators, to achieve a turnover of over 9 million euros with an EBITDA of over 60%”. In 2018 alone, Lionard properties valued at 106.5 million euros changed hands.

Of course, to impact such a market, the right tools are a pre-requisite. In addition to the professionals who make up the team, “the pearl of the company is undoubtedly our management system. This is the primary national resource in terms of the luxury market in Italy”, says Heath. “We cross-reference the most in demand areas and the most desired types of property with current data. This provides our target audience with a survey of more than 45,000 properties nationwide. More than 2,500 of these are officially for sale. This helps the customer to form an independent idea of all the options available”.

The right decor

Once you have purchased a luxury home, you need equally luxurious furnishings. Pasquale Natuzzi Junior Says, “high-spending clientele is undoubtedly different. It is a group of consumers for whom it is necessary to transform the purchase into a unique experience.” Pasquale is creative director and stylist at Natuzzi.

The business started life in Puglia in the ’60s. It has since become one of the few Italian companies listed on Wall Street. Natuzzi totalled 449.6 million euros of turnover in 2017 and is present in 123 markets worldwide. Pasquale Natuzzi Senior, who is still company president, founded the company.

Natuzzi enjoys recognition as the “most famous lifestyle brand in the world in the premium furniture sector”.

And, according to Pasquale Junior has built its success, “thanks to our identity, our style and our product offering”.

In addition, the luxury consumer scene appreciates, “dealing with contexts where quality of service is everything. This is  especially relevant in our sector, where cooperation with customers can continue for several months. It is important to offer an experience that goes beyond a simple visit to the store: it is a relational investment that requires time, trust and competence”.

Harnessing this market sector naturally requires special business skills, which enable, “the customer to entrust the whole process to the company”. The shop team, according to the creative director, “is engaged in customer projects that can last well over six months”.

Success depends on the ability to transmit to the customer a dedication and professionalism, taking care of every aspect of the project. An approach that is only possible, “thanks to the continuous training and development of our sales staff, evolution of our collections and investments in our points of sale. In our stores we have reliable, well-prepared professionals, with a solid background in the design sector, perfectly able to interact with our clients, an architect or an interior designer. For highly sensitive projects, we also involve other professionals (colour experts, technicians specialised in 3D modelling, 3D, designers). Experts who can provide further support at the definition phase of a project”.

Finally… De Tullio Law Firm on Fortune Italia magazine

Please, contact De Tullio Law Firm for a free preliminary consultation if you would like to discuss your property purchase or you would like further information about our services.

For over 55 years, we have been providing legal services to clients at an international and local level, gaining a strong reputation for quality, expertise, and professionalism.

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Title deed and deed of sale. Change of Names.

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Registering names on a title deed in Italy

The final step of the Italian conveyancing process is signing of the deed of sale. In effect, the title deed in Italy transfers ownership of real estate into someone’s name.

This legal procedure demands the presence of a notary public, the real estate vendor(s) and buyer(s) and two witnesses.

The notary reads aloud the entire deed, which is written in Italian. All parties, including the witnesses and the notary public, then approve and sign the title deed.

If one of the parties to the transaction is not fluent in the Italian language, Italian law requires the presence of a qualified professional to translate and interpret the title deed. This could be a translator or a bilingual property lawyer. This legal requirement aims to ensure that all parties fully understand the content and ramifications of the deed. The professional acting as translator must also sign the title deed.

Once the notary has signed-off on the deed, the buyer acquires ownership of the real estate.

Subsequently, the notary is responsible for certain formalities. Because notaries work for the Italian State, registering the deed with the tax authorities is the first step. Next the notary lodges the deed in the Public Registers. This allows any third parties who may have an interest to know about the change of ownership. Lastly, the notary informs the land registry so they can update their records accordingly.

How do you change the name on an Italian property / title deed?

There are many reasons why you may need to change the name on a title deed in Italy. Divorce and death are the most common reasons.

In order to change the name on a title deed, you will require a new notarial deed.

For example, if you acquired a property with a spouse and following a divorce you need to remove one of the names from a real property title deed, you will need a new notarial deed.

Where the divorce decree is from an Italian Court, the transfer of ownership will not involve payment of any real estate transfer tax.

If on the other hand, the divorce decree is issued by a non-Italian Court, you will have to pay real estate transfer tax.

The terms of the new title deed determine applicable tax rates. It will depend whether the real property changed hands without any payment or if there was a financial transaction involved. In the latter case, you will need a new deed of sale.

How do you find out whose name is on a title deed in Italy?

In order to find out whose name appears on a title deed, you will need to conduct mortgage and cadastral searches.

Finally …

For more information and clarification on title and sale deeds in Italy, please do not hesitate to contact us. We are here to help you.

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