New Build Warranty in Italy
Buying a new build home in Italy should mean you encounter fewer problems than you would with an older property. Unfortunately, that’s not always the case. If you purchase a newly built property, or a property that is under construction, you want reassurance that the builder will fix any issues with your new build property. If problems occur, a new build warranty should help.
What is a new build warranty?
Legislative Decree No. 122 of 20 June 2005 introduced new build warranties in Italy. A new build warranty is essentially a ten-year indemnity insurance policy for newly built homes or property projects that are under construction. The warranty is taken out by the builder or developer but is in place to protect you, the buyer.
In Italy, a new build warranty typically covers you for any construction and material defects and direct damage to the property, as well as damage caused to third parties. The policy takes effect from the date of completion of construction work.
When is a new build warranty mandatory in Italy?
The obligation for a builder or developer to provide a new build warranty exists exclusively for:
– Purchases of new build properties and construction projects by private individuals (art. 1 paragraph 1 a) Legislative Decree 122/2005). It does not therefore apply if the purchaser is, for example, a company.
– For real estate that is subject to a preliminary contract signed prior to the completion of construction. In this case, the promissory purchaser will need to show the new build warranty to the notary appointed to draw up the Deed of Sale.
Ministerial Decree No. 154 of 20 July 2022, which came into force on 5th November, 2022, stipulates that the notary must verify the details of the warranty, acknowledging its compliance with Italian legislation.
In particular, with the recent introduction of the new build warranty standard template, the notary must verify the existence of the following essential elements:
Annex A. This is the Standard Form (Schema Tipo) of the warranty. The clauses it contains constitute the minimum content of the ten-year new build warranty pursuant to Legislative Decree 122/2005;
Annex B. This contains the Technical Datasheet (Scheda Tecnica) which serves the sole purpose of simplifying the policy activation procedure. It contains the main identification information of the parties and the scope of the insurance cover. The Technical Datasheet forms an integral and substantive part of the contractual agreement.
Annex C. This is the Certificate of Compliance (Modello di Attestazione di conformità). It serves to certify that the new build warranty complies with the standard template. This is in order to comply with Article 4 paragraph 1-quater pursuant to which, the deed of transfer of ownership must contain the identification details of the new build warranty and the certificate of compliance.
What if there is no new build warranty?
Failure to issue a new build warranty at the time of the transfer of ownership constitutes grounds for invalidating the sale and purchase agreement. Withdrawing from the purchase can only be exercised by the purchaser (it is in fact a ground for relative invalidity).
Moreover, as a result of the amendments introduced by Legislative Decree 14/2019, in addition to possible action to void the sale, the purchaser has the right to enforce the warranty in the event of a breach by the builder, provided that the purchaser notifies the intention not to proceed with the completion of the transaction (art. 3 paragraph 3b of Legislative Decree no. 122/2005).
Buying a property in Italy is always exciting, but when your new Italian home is a new build, it’s extra special. You’ll be the first to make the property a home, having everything exactly as you would like it to be. But before you buy, you’ll want to check that all the building work and related paperwork is correct. At De Tullio Law Firm, we have decades of experience specialising in Italian property law. Get in touch and let us help you make your Italian new build property purchase safely.
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