Italian Property Law: Our Journey

A Decade-Long Proposition

For a decade, Mario and Giovanna, our charming elderly Italian neighbors, wanted to sell us their property. The small farm includes several hectares of land, a farmhouse in decent shape, and outbuildings ranging from usable barns to near-ruins. Italian property law is a significant factor in the process, affecting both the vendors’ approach and our response.

The Appeal and the Sticking Point

While the idea of buying the adjacent property was always appealing, the asking price was just too high. Mario and Giovanna aimed to distribute the proceeds among their five grown children and cushion their final years. None of the children were interested in taking on the farm, as they all had their own properties and families elsewhere. We repeatedly turned down their offer due to the price. We suggested that a substantial reduction might pique our interest and made an offer, but they rejected it, holding out for more. Understanding Italian property law helped us navigate these negotiations, ensuring we were aware of our rights and obligations.

The Turning Point

Seven years ago, Mario and Giovanna decided they could no longer manage the farm. They moved into an apartment in town, returning to the farm to spend the summer. They preferred to avoid real estate agency fees and continued their quest for a private sale. After the pandemic, a local goat farmer made an offer, and we shared in their excitement and relief. However, the buyer needed a mortgage and couldn’t secure one, likely due to complications related to Italian property law. The situation dragged on for 18 months and eventually the sale fell through. They came back to us with a lower price, but it was still more than we wanted to pay. By then, Mario’s health was declining.

Unexpected News

One day, Giovanna called, asking us to visit them in their town apartment. We went, and inevitably, the property sale came up. We reiterated our previous offer, still shy of their expectations. Not long afterward, sadly, Mario died, and amidst the grief, the matter was set aside, unresolved.

We maintain regular contact with Giovanna. She has been a friend for many years. Our mutual affection has always been a constant. We visit her regularly for coffee and conversation. Occasionally, during these visits, the subject of the farm sale would resurface as she and her children navigated the labyrinthine Italian probate process under Italian property law.

Unexpectedly, in late December, a family delegation arrived at our house. They brought season’s greetings and the news that all the heirs, including Giovanna, had decided to accept our offer. Giovanna said Mario had always hoped we would buy the property, believing we would care for it properly.

Engaging Legal Expertise in Italian Property Law

Having made a verbal agreement to purchase the property, we immediately engaged De Tullio Law Firm, experts in Italian property law. The team initiated due diligence and contacted a surveyor and a notary.

The first thing they discovered was that according to property plans, one of the doors leading to the terrace should have been a window. This wasn’t a huge issue as post-purchase, we intend to renovate the house and we could fix that.

However, as the team looked into the paperwork, it became apparent that there were other issues with the property. All these matters explained why the goat farmer had encountered difficulties securing a mortgage.

Even minor irregularities with Italian town-planning and cadastral regulations, under Italian property law, can complicate sales and purchases, particularly when the buyer requires financing. Banks mandate full compliance with regulations.

Navigating Legal and Regulatory Challenges with Italian Property Law

Having lived in Italy for almost 20 years, we have seen expat property owners grappling with discrepancies when they come to sell properties at a later date. They often find their assets adversely affected in terms of resale value and marketability because of minor issues that were present when they first bought the properties. This underscores the importance of conducting thorough legal due diligence when purchasing a property. Italian property law is very complex. As soon as you know you want to buy a property in Italy, you should engage a property lawyer.

De Tullio Law Firm discovered a critical omission in the succession paperwork: not all buildings were accounted for in the sale. This discrepancy arose because Mario and Giovanna had failed to declare a collapsing outbuilding in the original title deed, drafted in the 1980s when they acquired the particular parcel of land from another neighbor of ours. This old outbuilding was erected prior to 1967.

Understanding Italian Property Law and Building Regulations

Italian buildings constructed before September 1967 were not subject to municipal authorization due to the absence of comprehensive national building regulations. The enactment of Law No. 765 in 1967 marked a pivotal shift in Italian property law, mandating building permits from municipal authorities and standardizing processes across Italy. Prior to this law, construction practices were governed by local customs and lacked formal oversight.

However, despite its derelict condition, the outbuilding must still be registered in both the land registry and the Nuovo Catasto Edilizio Urbano (NCEU). The latter serves as a registry for urban properties, and inclusion is a legal prerequisite for transactions such as sales or transfers of ownership under Italian property law.

In our case, updating the succession paperwork from the tax authority to include the outbuilding in the sale are imperative steps under Italian property law. Additionally, the vendors will need to rectify the original title deed to include the outbuilding. These measures will ensure legal compliance and clarity in the transaction.

Addressing Land Registry Discrepancies Under Italian Property Law

The land registry map of the property presents a concerning discrepancy: none of the buildings are accurately depicted. Rectifying this will entail updating the land registry.

Then, a neighbor has encroached on two of the land parcels included in the sale. Part of the neighbor’s house extends onto one parcel, while his garden spills over onto another.

The neighbor is a kind elderly gentleman, and we don’t want to risk boundary disputes either with him, or potentially with his heirs in the future, who might assert usucapione rights. Resolving this dilemma requires subdividing the land the neighbor is currently using as a garden and adjusting the boundary accordingly. Similarly, where the neighbor’s property encroaches onto land included in the sale, boundary lines must be redrawn.

While both sections of land will be gifted to the neighbor, the vendors must ensure that they and the neighbor have them legally registered to ensure clarity and avoid any future disputes under Italian property law.

Italian Property Law: Verifying the Internal Layout

It’s crucial to check the internal layout of the property. Although the vendors had provided their own plans, official municipal plans often differ.

The vendors had already mentioned a discrepancy with the door leading to the terrace. Would the vendors’ plans match the ones held by the local municipality’s technical department when reviewed? The team at De Tullio Law Firm investigated this using the services of a geometra.

After several weeks of waiting, the geometra received notification that the relevant file had been “misplaced” in the municipal archives. He applied to the provincial archives for a copy. Thankfully, apart from the issue with the extra door, the interior plans match the actual layout of the house.

Moving Forward with the Preliminary Contract

Despite these, and a few other issues, we asked De Tullio Law Firm to organize a preliminary contract. We wanted to secure the farm while protecting ourselves from purchasing a property that is not fully compliant with planning regulations under Italian property law.

After several iterations between the lawyers at De Tullio Law Firm and the notary, we now have a preliminary contract in place with conditions precedent that specify the remedial work required before completion, with the costs to be borne by the vendors. The deadline for completion is December 31st, providing the vendors a realistic amount of time to address all the discrepancies.

Finally …

De Tullio Law Firm extends our gratitude to our clients for sharing their journey to purchase their neighbor’s farm. Italian property law is indeed complex, and seeking legal advice is crucial to safeguard your interests and resolve issues before buying property in Italy. As this case demonstrates, what initially appeared to be a straightforward transaction revealed a number of discrepancies, highlighting the importance of due diligence.

The Office for Italian Statistics (ISTAT), estimates that approximately 20% of Italian properties are illegally built. Additionally, Italy currently faces a significant backlog of over 4 million retroactive planning applications for illegal constructions. Some estimates suggest this number could be multiplied by at least five when including properties with minor irregularities.

Despite the challenges in this case, all the issues are resolvable. We anticipate that the signing will take place by the December deadline. This case underscores the critical role of thorough legal checks in property transactions, ensuring a smooth and compliant acquisition process.

At De Tullio Law Firm, we offer personalized advice and support. With over 55 years of experience handling clients’ Italian and cross-border property, residency, family, and inheritance matters, we are right beside you.

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