Insurance policy for off-plan property
Buying off-plan means you purchase your home before the developer has finished building it. You may even buy it before construction has begun. This type of purchase in Italy is not without risks. Article 4 of Italian legislative decree 122/2005 states that a construction company must provide an off-plan insurance policy to property buyers.
Because this insurance policy acts as a guarantee, it is therefore an important element of your off-plan purchase.
The insurance policy provides 10 years of cover and acts as a guarantee for any “serious construction defects”.
As you should receive your insurance policy no later than the transfer of ownership, we recommend you request that the notary explicitly references this insurance in your deed of sale.
What types of defects are covered under an off-plan guarantee?
Thanks, in large part, to jurisprudence, the notion of a serious construction defect has developed substantially in recent years.
Whereas a serious construction defect only previously included problems prejudicing safety and stability of a property, it now has a far broader meaning. In effect, nowadays, a defect might be anything that provokes a significant decrement to the normal use of the property. Consequently, the insurance policy should cover any damage that might impact regular use of the property.
In addition, serious construction defects extend to secondary elements of construction. This encompasses, for instance, use of poor or inadequate materials. It also includes construction that may jeopardise habitability of the property and problems that require maintenance work.
Examples demonstrating the breadth of serious construction defects could be the detachment of tiles in a kitchen or bathroom or a poorly sealed roof. Both of these issues may lead to water infiltration and would require repairs.
Buyers should also be familiar with the responsibility of the contractor concerning defects in construction work.
Who has the right to off-plan insurance?
The law limits the right to this insurance policy to private buyers.
In a more restrictive interpretation of the law, a buyer should be a “consumer”. This means that the insurance policy and guarantee is only available to buyers who purchase an off-plan property for personal use.
In other words, any commercial or professional use of the property would exclude the buyer from the right to this insurance policy.
At De Tullio Law Firm, we specialise in Italian and cross border legal matters. If you are buying any type of property anywhere in Italy and you need advice or you would like to discuss your purchase, please get in touch with us. We are here to help.
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