Tag Archive for: Italian Attorney

Italian Inheritance. Why draft an Italian Will?

If the deceased was resident in Italy at the time of death, Italian Inheritance law applies to the deceased’s worldwide assets. Whereas if the deceased lived outside Italy, Italian inheritance law is only applicable to assets in Italy.

Are international wills valid for an Italian inheritance?

Generally speaking, Italy recognises the validity of international wills. However, it is advisable for non-Italian nationals who own assets in Italy to draft an Italian will.

Why should you have an Italian will?

Firstly, having an Italian will minimises misunderstandings and/or conflicts amongst heirs. Secondly, it facilitates legislative, linguistic and jurisdictional matters with the Italian authorities. Thirdly, having an Italian will can reduce estate tax and lastly, it simplifies the whole inheritance procedure.

Where can I get help drafting an Italian will?

If a foreign national decides to dispose of Italian assets by means of a will in Italy, an Italian attorney, will be able to advise on all aspects of Italian Inheritance Law.  It is a good idea to engage the services of an Italian attorney familiar with both the Italian and the testator’s national jurisdictions.

Italian inheritance law stipulates that the testator must leave a certain portion of assets to immediate family members. This is known as, “Forced Heirship”. Forced heirs are the decedent’s spouse and/or children, or other parties to whom a testator cannot legally deny a portion of assets.

It is important to follow the Italian inheritance procedure accurately. Engaging the services of a qualified and experienced Italian lawyer is therefore highly advisable.

In order to draft a will in Italy, the testator must be at least 18 years old, of sound mind and the legal owner of the assets in the will.

How does the Italian inheritance process work?

Following the death of a testator, the first step is to have the will published. As with all major events in life, an Italian notary needs to do this. Next, a testator’s heirs or executors can proceed with Italian Probate. This involves making an declaration of succession “Denuncia di Successione” in Italian.

Probate must take place within 12 months of a testator’s death. The declaration of succession lists all the relevant assets for the Italian tax authorities who calculate estate tax. Italian estate tax rates are based on heirs’ relationship to the testator and the value of inherited assets.

Once estate tax has been paid, the procedure culminates with the transfer of inherited property in the Land Registry, “Voltura” in Italian.

Finally …

A new EU Law 650/2012, also known as the Brussels IV Regulation came into effect on 17th August 2015. Brussels IV contains a provision for individuals to make an election in their wills for the country of their nationality, or where individuals have multiple nationalities any one of their nationalities, to apply to the devolution of their estate.

Interestingly, there are also potential benefits for non-EU nationals. However, again, appropriate action in the form of a choice of law clause in a will is necessary.
Nominating a country law needs careful consideration. You should take into account matters such as foreign matrimonial regimes, usufruct, tax consequences, joint ownership structures and other foreign proprietary rights with respect to your estate.

Because each case is different, you should seek professional support and advice.

At De Tullio Law Firm, we have over 55 years of expertise managing cross border succession and estate planning matters throughout Italy. Our firm is also a full member of STEP, the world’s leading association for trust and estate practitioners.

Please contact us if you have any questions about estate planning or if would like to discuss your situation.

You may also be interested in How to write a Will

Italian Estate Administration

“I have inherited Italian assets from a deceased relative. How does Italian estate administration work?”

We received this question from a reader wondering how to proceed with Italian estate administration. We hope that you find our answer helpful. If you have any queries related to Italian assets or inheritance law, please feel free to send your questions to us. We are here to help.

How is Italian inheritance governed?

According to the law of intestate succession, if the deceased didn’t have a will, the assets are transferred to descendants following the principles set out by Italian Civil Code.

If, on the other hand, the deceased made a will, this should indicate wishes regarding disposal of assets.

Types of will

In broad terms there are two types of will. Either an Italian will, which needs publishing and registering with the relevant Italian authorities. Or, a non-Italian will. In other words, an international will.

According to Italian inheritance obligations, an heir must first have an international will translated into Italian using a sworn translation in an Italian Court.

This can cause legal issues. A non-Italian will, especially if it lacks any explicit reference to the Italian assets, becomes subject to interpretation. In order to interpret the will, heirs need to engage an Italian attorney. This is because the Italian authorities need to ascertain whether or not the will is applicable to Italian assets. If the will does not expressly dispose of Italian assets, succession rights follow the rules of the Italian Civil Code.

Heirs need to accept or renounce an inheritance before Italian estate administration can begin

Whether the deceased left an Italian or international will, heirs have to formally accept or renounce their Italian inheritance. This can be done tacitly or explicitly.

Tacit acceptance is implied. It occurs if, for example, if the heir disposes of or otherwise has dealings with the Italian assets, thereby showing an intent to accept the inheritance.

An explicit acceptance involves making a deed using the services of an Italian notary.

Where an heir is unsure whether or not to accept or renounce an Italian inheritance, a third option, reserved acceptance, offers a possible alternative route.

Once an heir accepts an inheritance, Italian estate administration can begin.

Italian estate administration process

Within twelve months of the testator’s death, heirs or executors  need to file a statement of succession  with the competent authority, which is the tax office – Agenzia delle Entrate. The tax office then calculates estate tax.

Heirs or executors pay the relevant inheritance tax connected with the inheritance. The amount of estate tax payable depends on heirs’ relationship to the deceased and the value of assets each inherits.

The final stage of Italian estate administration involves re-registering immovable assets in the names of the heir(s).

Finally …

Trying to navigate the Italian inheritance procedure without the assistance of an experienced Italian inheritance attorney can be difficult, especially if you are abroad. We would recommend that you seek professional advice and guidance to manage the process sympathetically and efficiently. For more in-depth information about Italian succession, you might find our Succession Guide useful.

At De Tullio Law Firm, we have over 55 years of expertise managing cross border succession and estate planning matters throughout Italy. Our firm is also a full member of STEP, the world’s leading association for trust and estate practitioners.

If you would like to discuss your case, you can reach us here for a free consultation.

Off-Plan Property in Italy. Preliminary Contract Checklist

Investing in an off-plan property in Italy

Investing in an off-plan property in Italy entails a buyer commiting to buy a property from developer that has not yet been built or that is in the process of construction.

This type of investment hides a number of risks, the major one being that the developer goes into administration during construction of your property and you lose any money you have already invested.

Off-plan property in Italy. Checklist for preliminary contracts

Legislative decree 122/2005 introduced very strict rules concerning buying an off-plan property in Italy. Article 6 of the above mentioned legislative decree states that the preliminary contract for an off-plan property in Italy should contain key elements. A preliminary contract is a legally binding document. Before you sign one, make sure it contains all of the following items.

A full description of the parties to the transaction

Not only the buyer but also the builder and/ or developer.

Property details

Identification details of the property including cadastral plot references.

Property description

A description of the property including outbuildings for the exclusive use of the buyer.

Building permits

Details relating to the building permit or application for a building permit. In addition, the law explicitly requires the mention of any issue associated with the building permit.

Technical specifications

All technical data relating to the building. The law requires a summary of technical specification in the preliminary contract. Full data must be in an attachment (capitolato). These specifications cannot be modified without the agreement of both parties.

Completion

Deadline date for when the construction will be complete.

Payments

Method of payment. Not only the total price but also a payment plan for deposits and installments. Buyers should only use bank transfers or other traceable methods of payment.

Bank guarantee

Full details of the bank guarantee. Buyers should receive the bank guarantee when they sign the preliminary contract. The guarantee should therefore be in place prior to, or at the latest upon signing the preliminary contract.

Loans

All mortgages or other types of loan for the development. Where a mortgage for the whole development is in the name of the construction company or developer, the company must divide it among all the buyers. Unless this is the case, the notary will not legally be able to sign the deed of sale.

Contractors

A full list of the contractors involved in the construction along with proof of their identities.

Checklist for preliminary contract attachments

As attachments to the preliminary contract buyers should also have the previously mentioned full technical specifications of the property. This should detail all the construction materials as well as listing all the agreed finishes and fittings. In addition, there should be a copy of the plan submitted to request building permits.

What if the preliminary contract lacks one of the elements set out in art. 6?

A preliminary contract not in compliance with the requirements of article 6 may be null and void because it breaches Italian legislation.

Since the above mentioned legal requirements are set out in order to protect the interests of the buyer, only the buyer can object to the validity of the preliminary contract.

Finally …

There are a number of risks involved in off-plan purchases. We have written several articles  about off-plan property purchases in Italy. You can use our search tool to find more on the subject of buying an off-plan property in Italy.

At De Tullio Law Firm, we are property law specialists. We operate throughout Italy. We would always recommend that you engage your own lawyer to ensure that you protect your interests. Before signing any off-plan property-related paperwork, including a preliminary contract, you should seek independent legal advice. If you are unsure about any aspect of your off-plan property purchase in Italy, we are here to help.

You may also like to watch our info videos about buying property in Italy.

Off-Plan Property in Italy. The Italian Law

The main risk with off-plan property purchases in Italy

Another in our series on the important issue of off-plan property purchases in Italy. Use our useful search tool to find our other articles on off-plan property purchases.

Investing off-plan is where a purchaser makes a commitment to buy a property from a developer that has not yet been built or is in the process of being built.

This type of investment can hide any number of risks.

The main risk is that if the developer becomes insolvent, the buyer may well end up out of pocket.

Guarantees for Italian off-plan property

Italian legislation provides a number of measures to protect buyers if the developer goes bankrupt. However, the onus is on the buyer to ensure that these protections are in place.

Guarantee on deposits

Law 122/2005 declares the obligation of the developer to offer a surety bond. This provides a guarantee to the buyer for deposits prior to the transfer of ownership of the property.

Furthermore, in accordance with art.1 of Law 122/2005, the developer must offer the surety bond at the latest when the preliminary contract.

All Italian off-plan property purchases must have a preliminary contract. A surety bond must be in place by the time buyers sign the preliminary contract. The developer must clearly reference the surety bond in the preliminary contract. If there is no mention of a surety bond, the preliminary contract is invalid unless, the buyer explicitly expresses that it should prevail.

According to article 2 of Law 122/2005 surety needs to be a bank, an insurance company or a financial broker authorised by the Bank of Italy. The surety bond guarantees the buyer repayment of all money paid as deposits.

In order to request an excussion of the guarantee, the buyer must first formally withdraw from the preliminary contract. A buyer’s written request to withdraw, together with evidence of deposit payments, is sufficient to activate the guarantee. Italian legislation stipulates that the surety provider should refund all deposits within 30 days.

Guarantee for building defects

According to art.3 of Law 122/2005 the surety bond also covers damages arising from building defects. This includes any damage the buyer discovers after signing the deed of sale.

Article 1699 of the Italian civil code covers building defects. The guarantee for defects has a statute of limitations of ten years from the finalisation of the building work in question.

Where the seller is a different legal entity from the developer of the property

The seller is legally required to request a copy of the surety bond from the developer and provide this to the buyer. This is part of the seller’s contractual obligations and must be referenced in the deed of sale.

Finally …

If you are considering investing in off-plan property in Italy, our advice is to engage your own independent legal adviser. Bear in mind that a lawyer recommended by a developer or seller may have a conflict of interests in this matter so we advise you to choose your own lawyer. If you need any help, we are here to help.

For more comprehensive information about the Italian property purchasing process, you might like to read our guide. You may also like to watch our info videos about Italian property law.

 

Off-Plan Properties in Italy. Advice


This article was originally provided by De Tullio Law Firm to the British Consulate in 2011. While the article pertains to a Calabrian case, information is relevant to off-plan properties throughout Italy.

If you are looking for additional information about off-plan properties purchases in Italy, you will find a series of articles on the subject if you use our search tool, including a post here about your legal position regarding delivery delays.

Buying off-plan homes in Calabria

A large number of British citizens who have bought holiday property in Calabria have recently contacted the British Consulate in Naples. Many of these transactions have been completed to the satisfaction of the purchasers but, a significant number have run into difficulties with the lawyers involved or with the developers. The Consulate has drawn the matter to the attention of the Italian authorities who are investigating, but we strongly advise purchasers encountering problems of this sort to seek legal advice about obtaining redress.

Advice for anyone purchasing off-plan properties in Italy

Seek legal advice before signing a contract and paying any money upfront

Once you have signed a preliminary contract, it may be too late. Choose your own independent lawyer. We advise you not to use lawyers recommended by the developer or contractor so as to avoid possible conflicts of interest.

Use an independent Notary Public

You do not have to use the notary proposed by the developer or contractor for the deed of sale. In fact, to avoid possible conflicts of interest, we would advise against this. Choose your own notary.

Remember that the Italian version of the contract will prevail in an Italian court

So, either commission the translation yourself from an independent translator or, get any translation you receive checked by an independent qualified person.

Deposit

The amount you pay as a deposit for an off-plan development should be up to around 10%. Seek legal advice if you are asked for more than that.

Stato avanzamento lavori

As the building work progresses, the developer should accompany any request for further payments with a list of the work done (‘stato avanzamento lavori’). Ask an independent surveyor or architect to check the list before you make any payment. The preliminary contract should include a payment plan.

Surety and guarantee

When you buy an off-plan property, you should receive a bank loan guarantee. This must be an annex to the preliminary contract. If the developer becomes insolvent, this bank loan guarantee will often represent the only protection you have for your investment. If you have already received a bank loan guarantee, have a qualified professional check that it complies with Italian law.

Finally …

At De Tullio Law Firm, we are Italian and cross border property law specialists. We operate throughout Italy. If you are considering investing in off-plan property in Italy, please get in touch with us for a free consultation. We are here to help.

Building Defects in Italy. Who Is Liable?

A professionally drafted contract is your best protection against any faults with Italian construction work


Building defects include the use of shoddy materials, poorly executed work, deviations from an agreed plan or a request for additional money.

The best advice we can therefore offer before you enter into any arrangement with a construction, building or renovation company is to call your legal advisor.

A professionally drafted contract in both English and Italian will prevent a lot of problems, reduce stress and often save you a considerable amount of money.

A summary of Italian legislation covering building defects

The contractor is responsible for defects and unauthorised variation of construction work. If there are visible defects, you should not accept the work. If you do, you lose the right to claim on the guarantee (art. 1667, first paragraph of the Italian civil code).

In order to formally contest the construction work, you should request your legal advisor to notify the contractor through a formal letter of default. If you accept work with visible defects and/or unauthorised variations of work, you will lose the right to trigger the guarantee unless the defects and variations were caused with malicious intent. A contractor is considered to have acted with malice if, despite being aware of the defects and/or variations, the contractor fails to point these out to the client.

Hidden building defects

The acceptance of work does not compromise your guarantee in the case of hidden defects. You can contest hidden defects when you discover them. A client will need a lawyer to take action in order to make a claim on the guarantee. 

– Report the hidden defects within 60 days of their discovery.

– Take legal action within 2 years from the completion of the work.

If a client does not comply with both of the above mentioned obligations the client will lose the cover of the guarantee. In cases where the contractor not only neglects to point out the defects but also acts in a malicious manner to hide the faults, the time limit for legal action extends to 5 years.

Fault of the contractor 

Once the client proves the defects and/or the unauthorised variations, there is a presumption of fault against the contractor. It is then the contractor’s responsibility to prove any absence of negligence.

Guarantees

According to article. 1668 of the Italian civil code, in the case of visible or hidden defects the client has 4 possible courses of action.

– Request correction with the contractor bearing the total cost.

– Request a price reduction.

If variations or building defects are serious the client can:

– Request the termination of the contract and,

– Request compensation for damages.

Responsibility of the contractor for new build properties

Article 1669 of the Italian civil code provides particular regulations for new buildings. For new builds, the contractor is liable for collapse (total or partial), evident danger of collapse or serious defects in construction.

Jurisprudence extends liability to renovation work which can be expected to be durable. This, for example would include roof waterproofing and floor and wall tiling. The contractor’s responsibility increases to a period of 10 years from the date of completion of the work. Any faults should be contested formally with a letter of default drafted by your lawyer to the contractor within 1 year of discovering them.

Italian Law stipulates that the client has one year from the recorded delivery of a letter of default to starting legal proceedings against the contractor. Once the client has highlighted serious defects, there is a presumption of liability against the contractor. The contractor must prove the contrary.

Examples of serious building defects 

There is significant jurisprudence defining the meaning of “serious defects”. In broad terms, the definition of serious defects is work that seriously compromises the use of the property or has a significant impact on essential structural elements such as stability, efficiency and duration of work. Here are some examples of serious building defects classified in Italian jurisprudence:

– Detachment and rupture of a significant number of tiles.

– Defects concerning the roof of the property causing infiltrations of water.

– Faulty heating system.

– Inadequate thermal insulation.

– Faulty plumbing system.

– Defects of the chimney or flue.

Inspecting construction work 

Article 1665 of the Italian civil code provides the client with the option to inspect completed work before signing-off on it. This right of inspection also extends to work in progress. We would recommend that you involve your lawyer and an independent surveyor in this process before accepting any work.

Article 1665 par. 4, states that where the client accepts the work at the point of signing-off without requesting an inspection or without contesting work, there is a presumption that the client has accepted the work. If the client accepts the work without any formal objection, this constitutes an implicit acceptance. As a consequence, the client loses the guarantee for visible defects or unauthorised variations. There is however an exception for malicious or undeclared issues. In addition, acceptance of work means the client must pay the contractor for the work.

Finally …

For problems concerning your Italian property renovation or construction work, please do not hesitate to contact De Tullio Law Firm. We are Italian property law specialists. We offer legal assistance throughout Italy. While it is always best to engage independent legal services prior to starting a renovation or construction project, contacting a lawyer as early as possible in a dispute can often lead to a settlement thus avoiding lengthy and costly litigation in the Italian courts.

 

You may also be interested in Off-Plan Property in Italy: Insurance And Guarantee. In addition, we have a number of info videos that you may like to watch.

Real Estate Transaction in Italy. Legal Translations

An accurate understanding of the Italian legal system is essential for a translator dealing with an Italian real estate transaction


All legal documents relating to an Italian real estate transaction must be in Italian, regardless of the nationality of the parties.

Italian legal writing is highly technical, ritualistic and often archaic due to close links with Roman Law. Legal language can seem obscure for people without a solid legal background in Italian law. 

There are huge differences between Common Law and Italian Civil Law. This can add to the confusion. In fact, there are legal concepts in Roman Law that simply do not exist in Common Law and vice versa. There are concepts bearing the same name in the two systems but with different meanings.

An accurate understanding of legal systems and processes is therefore essential for translators or interpreters dealing with Italian real estate transactions. Translators require an in-depth knowledge of specialist terminology as well as knowledge of legal concepts. 

This is why you should never sign a legal document without a lawyer to explain commitments in your own language.

Italian versions of contracts prevail in a court of law 

Italian real estate agents often use pre-printed contracts with an English translation. In reality, these translations are rarely faithful and can often be misleading for the buyer. It’s important to underline that in case of litigation, the Italian version of any contract will always prevail in a court of law.

In the most crucial completion phase of the real estate transaction, you will have to sign the deed of sale in the presence of a public notary. The Italian law requires the presence of an interpreter if one or more parties does not speak fluent Italian.

Our advice is to make sure that your interpreter is qualified not only from a linguistic point of view, but also in terms of legal background.

Another crucial aspect to bear in mind is the independence of the interpreter in order to avoid any conflict of interest. This precludes using the real estate agent, a relative or a friend of any parties involved in the transaction.

Finally …

Engaging a bilingual property lawyer will ensure you have the right expertise throughout your Italian real estate transaction. Your lawyer will always make sure you have a full understanding of all documents before you sign them. In addition, a lawyer can act as your interpreter to explain all the legal ramifications. If you need any assistance with your property purchase in Italy, Please get in touch.

Insurance Policy for Off-Plan Properties

What defects does an off-plan insurance policy cover?

In accordance with article 4 of legislative decree 122/2005, a construction company must provide off-plan property buyers with an insurance policy.

Essentially, this is a guarantee which covers any serious construction defects. The guarantee should provide 10 years of cover.

Off-plan buyers should obtain the insurance policy when the transfer of ownership takes place.

Because by law, a notary public must handle completion of Italian property conveyancing, we would advise you to request that the notary explicitly references the insurance policy in your deed of sale.

What constitutes a serious construction defect?

The notion of serious construction defects has developed substantially over time. This is thanks, in large part, to jurisprudence. Originally, the notion only included defects involving prejudice to the safety and stability of the property.

However, nowadays, the notion has a wider meaning. It therefore includes all defects that can be defined as provoking significant detriment to the use of the property. Consequently, the guarantee should cover any damage that might impact the owner’s regular, day-to-day use of the property.

Does the insurance policy also cover the use of poor quality materials?

If the construction defect impacts on the regular use of the property, it may involve secondary elements of the construction. Thus, if the fault inhibits an owner’s ability to live in the property and implies maintenance work, the use of poor or inadequate materials may also constitute a serious defect.

For example, floor tile detachment in some areas of a property may constitute a slip and fall hazard. Another example could be poor sealing of the roof which allows water ingress. Both examples clearly demonstrate that the notion of serious construction defects is quite broad.

Who can make a claim on an off-plan insurance policy?

The law limits the right to make a claim on a serious defect insurance policy to buyers who are private individuals. According to a more restrictive interpretation of the law, the buyer should be a “consumer”. In other words, an owner can only claim on the insurance policy if they purchased the property for personal use. The insurance policy excludes tenanted, entrepreneurial or professional use of the property.

Finally …

There are many risks related to buying off-plan property in Italy. We have written a number of posts on the subject, which you can access using our search tool.

Off-plan property purchases in Italy are complex. There are many hidden risks. We would therefore always advise that you seek independent legal advice before signing any documents or paperwork.

De Tullio Law Firm can advise and guide you throughout your Italian property purchasing journey. We have over 55 years of experience working with clients on their Italian and cross border property, family and inheritance matters. Get in touch.

For more comprehensive information about the Italian property purchasing process, you might like to read our guide. You may also like to watch our info videos about Italian property law.

English-Speaking Italian Property Lawyer

How Can An English-Speaking Italian Property Lawyer Advise with The Purchase of A Property in Italy?

Buying a home anywhere, including Italy, is probably one of the largest and most significant investments you will make in your life. Italian property law is complex. It raises special issues of practice as well as points of law not present in other transactions and or jurisdictions. An English-speaking Italian property lawyer is a trained legal specialist, experienced at dealing with these problems.

The Italian property sales and purchase process

Briefly, in the typical Italian home purchase, the buyer enters into a brokerage contract with a real estate agent, usually in writing. Negotiations with the vendor go through the real estate agent, who acts as an intermediary.

In the first stage of the Italian property purchasing process, the buyer and seller enter into a formal written contract for the sale, a reservation offer. The buyer pays a small deposit. Once the reservation offer is in place, the buyer undertakes initial due diligence. Amongst other things, this includes checking title deeds and ascertaining the property has all the correct planning permits.

The second stage in the Italian purchasing process is to sign a preliminary contract. This contains all the terms and conditions of the transaction and is a legally binding document. Another deposit is due at this stage.

The third and final stage is when all parties to the transaction sign the deed of sale in the presence of a notary. In effect, this is the transfer of ownership when the seller receives the remainder of the purchase price.

The Italian property sales and purchase process may seem straightforward. However, having a specialist Italian property lawyer specialised in Italian property on your side will help you avoid some common pitfalls. 

Estate agency agreements

For example, a buyer may sign a brokerage agreement with a real estate agent that does not deal with a number of legal matters. This is a common occurrence. Estate agents often use standard forms, expecting that they will cover all circumstances. However this ‘one size fits all’ approach is not easily customisable for unusual circumstances.

In the absence of an agreement to the contrary, the buyer may be liable to pay a brokerage commission even if a sale does not occur, or to pay more than one brokerage commission. An English-speaking Italian property lawyer can explain the implications before you sign a brokerage agreement. In addition, your lawyer can negotiate the agent’s rights if the seller withdraws the property from the market, or can’t deliver a marketable title.

Due Diligence

An English-speaking Italian property lawyer can execute title searches, explain the title, determine if the legal description is correct and whether there are problems with co-­owners or prior owners. A lawyer can also explain the effect of easements, agreements or restrictions imposed by a prior owner.

In addition your lawyer can ascertain whether there are any legal restrictions. For instance zoning legislation may impair your ability to change use or make alterations to the property.

The title search does not tell the buyer anything about existing and prospective plans in the area. Having your own Italian legal advisor will enable you to obtain this type of information more accurately, thoroughly and easily than trying to do it yourself.

You may have plans to alter, renovate or extend the property. It is important to ascertain that your plans are possible from a legal point of view. Your lawyer can help this and can engage a surveyor or architect to inspect the property to ascertain  whether your plans are possible.

We would advise buyers to have a survey of the property. Not just structural but also measured. In addition, the survey should check for materials such as asbestos and lead-based paint and check the land for hazardous waste.

A buyer or seller may also find it useful to consult with a lawyer regarding purchasing structures, tax and inheritance implications of a cross-­border transaction.

The preliminary contract is the single most important document in a property transaction

Because a preliminary contract is so important, it is crucial that it reflects the buyer’s wishes. Again, Italian estate agents tend to use standard printed forms for preliminary contracts. Although these are useful, we would advise you to consult a lawyer for an explanation and clarification of the form.

You may need to make changes or add tailored conditions to reflect your personal circumstances. For example, is your purchase contingent on being able to get a mortgage? Are there any alterations to the property? If so, are they lawful? Does the whole property have full planning permission? What are the legal consequences if completion is delayed or doesn’t take place? What happens to deposits? This also raises related questions. Who will hold the deposits? Will they held in escrow by the estate agent?

Again, it is important to remember that printed contract forms are generally inadequate to incorporate the real understanding of the buyer and seller without significant changes. Once you sign a preliminary contract, it is not easy to back out of it and remember, you have paid deposits that you risk losing.

Deed of Sale

Completion is the most important event in the purchase and sale transaction. When you purchase a property in Italy you must do so through a notary. A notary is a government official. As such, the law requires notaries to remain impartial in all property transactions. They cannot therefore offer legal advice to any party to a transaction. A notary’s main tasks are to ensure that all documents are authentic. They also deal with registration and tax matters on behalf of the Italian State.

Although the role of notary is to ensure that the transaction meets all legal requirements, this does not mean that the notary is acting on the buyer’s behalf to ensure the buyer gets the best deal. Furthermore, contrary to what many people believe, the notary cannot guarantee the absence of legal issues such as any unlawful work to a property – (abusivi). While a notary will check planning permission, a notary will not make a site inspection of the property to ensure there are no additional illegal work.

The notary will require the presence of a translator if any party to the transaction is not a fluent Italian speaker. Having an English-speaking Italian legal advisor means buyers benefit not only from translation ability, but also legal know-how and expertise.

The closing process can be confusing and crowded. Those present include the buyers and sellers, their respective attorneys, and the real estate broker. There may be last minute disputes about delivering possession and personal property or the adjustment of various costs. If you are the only person without a lawyer, your rights may be at risk.

Conflicts of interest

Perhaps the most important reason to engage a lawyer is conflicting interests of the parties. Throughout the process, a buyer’s and seller’s interests can be at odds with each other.

The estate agent generally serves the seller. Both the seller and estate agent want to close the deal since this is how they will get paid. Because of this, we would advise you to choose your own English-speaking Italian property lawyer rather than one recommended by the estate agent or vendor.

Finally …

If you are looking at a real estate investment in Italy, why not talk to us? De Tullio Law Firm can advise and guide you throughout your Italian property purchasing journey. We have over 55 years of experience working with clients on their Italian and cross border property, family and inheritance matters. Get in touch.

Leasehold or Emphyteusis in Italy: What You Should Know

Emphyteusis is a type of leasehold arrangement

The closest Common Law legal term to Emphyteusis is a leasehold.

The landlord retains the ownership of property. However, a tenant has the right to use it for a contractually agreed period of time. In this type of leasehold or Emphyteutical arrangement, the tenant must both maintain and improve the property.

Leasehold or Emphyteusis is a contractual arrangement which has its roots in Roman Law. It formed part of the feudal system and has connections to the agricultural economy. Farmers had the possibility to cultivate land thereby sustaining themselves. In return, farmers paid an annual ground rent or canon in money and or in kind.

Italian leasehold or Emphyteusis arrangements are applicable to all types of physical assets

Contractual arrangements exist between two parties. On the one hand, the Dominium Directum, the freehold owner the (dominus) or landlord of the property. And, on the other hand, the Dominium Utile – the tenant (emphyteuta) who has the right to use property on a leasehold basis.

Emphyteusis is applicable to both land and buildings, including villas and apartments.

For the duration of an Emphyteusis contract, where land is involved, the tenant has the right to alter the surface of the land. This includes ploughing up pastures to cultivate a crop or plant trees.

Where the arrangement concerns buildings, a tenant may alter these. However, alterations must not cause any deterioration of the building. Therefore, if the tenant wishes to build an extension or add to existing structures, the tenant may do so.

The contract between the ‘landlord’ and the ‘tenant’ must be in writing. Rent payments are recurring and the duty to pay rent only ceases if the estate is destroyed. Destruction may either be due to human causes  such as a fire or through natural events for example, an earthquake.

Duration and obligations of leasehold or Emphyteusis contracts

Emphyteusis can be in perpetuity or limited to a minimum of 20 years. In either case, entitlements are the same.

In other words, a tenant may sublet the property, receive compensation for improvements made and even retain the property until full payment of his credit is rightfully received. These things, as well as those previously mentioned, do not require the consent of the landlord.

If the Emphyteusis has a duration of 20 years, the tenant cannot contractually transfer rights to another party. The right of pre-emption does not apply to the tenant in the same way it does to farmers. This means that the tenant in a leasehold or Empyteutical contract arrangement does not have right of first refusal to purchase land.

The tenant has a very broad right to dispose of the property held under perpetual Emphyteusis. Thus a tenant may dispose of the emphyteutical property by means of a deed in compliance with Italian Civil Code. This can either be an act inter vivos, i.e. made during the tenant’s lifetime, or causa mortis, i.e. after death. In the event of death, disposal is by means of a will.

Redemption of leasehold or Emphyteusis contracts

A tenant can acquire full ownership of Emphyteutical property through the payment of a price corresponding to fifteen times the annual rent. A tenant can make use of this redemption right at any time.

This redemption right prevails as an equivalent right accorded to the landlord in case of breach of contract by the tenant, known as the “devolution” (devoluzione).

Redemption may be settled either out of court, by means of an agreement between the landlord and tenant. A notarised deed must reflect the settlement. Where the landlord and tenant cannot reach agreement, the dispute can be settled in court.

Check the title deeds of an Italian property before you buy

A tenant must increase the productivity, the usefulness or the value of the estate, rural or urban. This obligation lasts for the duration of the term of Emphyteusis and must be in writing. Annual rents to the landlord are payable annually.

The landlord has the right to request the end of the Emphyteusis due to a breach of contract by the tenant. The landlord must refund any improvements the tenant has made. Payments should be proportional to the increase of value of the estate when it returns to the landlord.

Finally …

Acquiring, redeeming or disposing of property subject to leasehold or Emphyteusis arrangements can present challenges. Other types of leasehold arrangements also exist in Italian law. It is advisable that you contact an Italian lawyer to ensure you understand all the implications of such arrangements.

If you are looking at a real estate investment in Italy, why not talk to us? De Tullio Law Firm can advise and guide you throughout your Italian property purchasing journey. We have over 55 years of experience working with clients on their Italian and cross border property, family and inheritance matters. We are here to help.  Get in touch with us.

For more comprehensive information about the Italian property purchasing process, you might like to read our guide. You may also like to watch our info videos about Italian property law.