Preliminary Contracts in Italian Property Purchases

Preliminary Contracts in Italian Property Purchases – Condition Precedent

Preliminary Contracts in Italian Property Purchases

Before signing a preliminary contract for an Italian property, it is crucial to think about your personal circumstances.

Often, estate agents provide a boilerplate preliminary purchase contract. This is a legally binding document. However, the standard template may not fit your needs. We would always recommend that you think carefully before signing a standard preliminary contract.

A one size fits all preliminary contract may expose you to legal risks further down the line. These may be financial penalties or in a worst-case scenario, issues may end up in court.

During the course of the Italian property buying and selling process, it is quite common to sign a conditional offer to purchase, also known as a preliminary contract, which is subject to a condition precedent.

Conditional clauses must be written into a preliminary contract in order for them to be legally valid. If during the due diligence process, conditions are not met, the conditional offer might be withdrawn. Conditions precedent are designed to protect all parties when buying and selling property in Italy.

Examples of condition precedent

Conditions precedent could be a variety of factors such as:

  • a property purchase being contingent on the buyer obtaining approval for a mortgage
  • a buyer needing to complete the sale of other property to free up funds for the deal to proceed
  • a buyer agreeing to purchase a property if it passes a property inspection and/or survey
  • an offer hinging on approval from the local authorities for zoning and building permits. It is not uncommon for buyers of homes to want to make improvements which might include changing the internal layout or expanding the house’s footprint, or installing a swimming pool.

When a condition precedent is void or null?

The Italian Civil Code, however, limits the validity of conditions precedent included in a preliminary contract.

Any condition precedent must be anchored to objective elements and cannot depend exclusively on the will of one of the involved parties. According to Italian law, a condition will be declared null and void if it is considered as merely potestative, i.e. it is considered to be completely controlled and therefore in the sole interests of only one of the parties to the contract.

The most frequent and important example of a condition precedent in Italian preliminary contracts relates to mortgage approval. As all parties to the transaction stand to lose out if the buyer cannot obtain a mortgage, under Italian law, this condition precedent is considered valid; it cannot be classified as a purely potestative condition.

If you are not fully certain of having the financial means necessary to complete your real estate investment and you are negotiating with a bank to obtain a mortgage or, if you need to sell another property to finance the purchase, we strongly advise that the preliminary contract should indicate this – as a condition precedent subject to the approval of a mortgage or the sale of another property.

Find out more…

If you are considering a real estate investment in Italy and you are unsure about the means to finance it, do not hesitate to get in touch. Our law firm can assist you by ensuring you have the correct condition precedent in your preliminary offer to purchase. Get in touch:


You may also be interested in Buying property in Italy