Tag Archive for: Italian Lawyer

Italian Real Estate: How to Avoiding Pitfalls when buying

/in , /by

Buying Italian Real Estate should be exciting but, it can also be a complex process

The best way to protect your investment when buying Italian real estate is to engage an English-speaking Italian lawyer. Instructing an independent, English-speaking Italian lawyer could save you money and stress in the long run.

Choosing the right Italian lawyer is a very important decision. Make sure you instruct an independent English-speaking lawyer, who has experience advising international clients in relation to property purchases in Italy.

Your Italian property lawyer should:

Be independent. Make sure the lawyer is not connected in any way to the estate agent, developer or seller. An independent lawyer will exclusively look after your interests and not the interests of the estate agent or developer. You should find your own lawyer rather than taking recommendations from an estate agent or using a developer’s in-house lawyer.

Get Your FREE Guide to Buying Property in Italy

Our PDF guide covers every aspect of the buying process so you're ready to purchase with confidence

Download now

Speak English. Unless you are a fluent Italian speaker, your lawyer should be English-speaking. You need to know that when you ask a question, your lawyer can fully understand and answer in a way you fully understand. There is no point in paying for advice that you don’t understand.

Have Professional Indemnity Insurance. You should check that your lawyer has adequate insurance. Should any problems arise as a result of advice you receive, you can be certain you are covered.

Why should you instruct a lawyer if you are buying Italian real estate?

It is impossible to evaluate a property just from viewing it. By instructing a lawyer you will have a better understanding of the property and the Italian purchase process.

Your lawyer can:

Guide you through the Italian buying process and the obligations of each party.

Check the property title, carry out checks and searches on the property before you sign any paperwork, which may well have binding financial and legal implications.

Arrange structural and geological surveys.

Review the purchase contracts to ensure that everything is as it should be and that your position is protected.

Advise about any inheritance and tax issues that may affect you. This is particularly important in Italy which has rules of ‘forced heirship’.

Help you make a Will to cover your Italian property, which is advisable in planning the succession of your assets.

Assist with matters such as Italian residency, tax codes, setting up a bank account or utility contracts for a property following purchase.

What is the role of the notary who buying Italian real estate?

An Italian notary (Notaio) is a legal representation of the Italian Government. Whilst they are part of the legal profession, it is important to ensure that you do not confuse the role of your lawyer with that of a Notaio.

The role of the Notaio in Italy is to oversee the property transaction, to collect the appropriate tax on behalf of the Italian State and to register the property in the Italian Land Registry. Legally a Notaio must remain impartial in the property purchase. A Notaio cannot, therefore, act on behalf of the buyer or the seller. You should instruct your own independent Lawyer to advise you specifically in relation to your property purchase and related issues.

Do I need to give my Italian lawyer Power of Attorney?

If you are not going to be in Italy during the purchasing process, it is a good idea to provide your lawyer with a Procura Speciale – a Limited Power of Attorney. This is a legal document that gives another person authority to act on your behalf, for example, to sign a property purchase contract.

Conferring a Power of Attorney to another person gives significant power to act on your behalf. You should therefore be comfortable that you fully understand what you are agreeing to, that you are happy with the wording of the document and that your agent is competent and trustworthy.

Finally …

Buying Italian real estate is a complex matter. With our extensive knowledge and experience of Italian and international law, we provide expert conveyancing services throughout Italy. If you are purchasing an Italian property, get in touch with us for a free consultation.

 

Buying An Italian Property. A Short Guide

/in , /by

This short guide aims to cover the key elements of the Italian purchasing process

For a more in-depth explanation, you may wish to read our comprehensive Italian Property Buying Guide.

Buying an Italian property proceeds through 3 key stages:

– Proposta irrevocabile d’acquisto (Reservation offer)

– Contratto preliminare di vendita (Preliminary contract)

– Atto di vendita (Deed of sale)

Once you have chosen your property you should engage the services of a solicitor, whether you buy through a real estate agent or directly from the vendor.

The knowledge that an Italian solicitor has about Italian real estate law is invaluable – plus, your own solicitor is there exclusively to look after your interests.

The first stage. Reservation offer

When buying an Italian property, the first document you will have to sign is a, “proposta irrevocabile d’acquisto” (reservation offer). This is normal practice when purchasing through an estate agent

In contrast, when purchasing directly from the seller (a private sale) a reservation offer is unusual. The implications of dispensing with a reservation offer is one of the many reasons why you should seek legal advice.

Get Your FREE Guide to Buying Property in Italy

Our PDF guide covers every aspect of the buying process so you're ready to purchase with confidence

Download now

By signing the proposta irrevocabile d’acquisto, you secure the removal of the property from the market for a limited period of time, normally 15 days.

It is important to highlight that a reservation offer is only binding upon the buyer when formal written acceptance of the offer has been received from the vendor. Once the agreement has been signed by both parties, it becomes a legally binding contract.

First deposit

You will need to pay a small deposit, which is normally held by the estate agent or solicitor until the vendor has formally accepted the reservation offer.

Should you finalise the purchase, this deposit becomes a part payment of the purchase price. If the seller does not formally accept the offer, your deposit will be refunded.

Due diligence

While the property is off the market, your solicitor, assisted by a surveyor, will make all the necessary searches to ascertain that the property doesn’t have any debts, mortgages, claims etc. Due diligence checks and searches ensure there will be no unpleasant and possibly costly surprises during or after the purchase.

The second stage of buying an Italian property. Preliminary contract

Normally at this stage, buyer and seller having agreed to go ahead with the conveyance, will formalise their agreement through a “contratto preliminare di vendita” (preliminary contract)

Some estate agents (and especially in the case of private sales) choose, or recommend, leaving out this part of the purchase process. However, this legal document really is essential. It sets out the detailed terms and conditions of the sale.

Estate agents often use boilerplate preliminary contract templates. These may not be suitable for your personal situation. Your purchase may be subject to certain terms and conditions. For example, you may have come across some structural issues during due diligence and want to make your purchase contingent on a surveyor’s report. This condition would need to be in the preliminary contract. A solicitor can draft the contract, or at least to examine the estate agent’s template and advise you on any implications before you sign it.

Second deposit

One of the essential legal elements of the preliminary contract is the payment of a deposit (caparra confirmatoria). This is normally equivalent to a minimum of 10% of the purchase price.

If you back out of the contract without a valid legal reason, you will lose this deposit. On the other hand, if the seller changes their mind about the sale, they will have to refund your deposit in full. You would also have the right to claim an amount equal to the deposit through the Italian courts.

In the preliminary contract, the parties also set the date to finalise the conveyance in front of the public notary.

The third Stage of buying an Italian property. Completion of the sale

By law a notary must oversee Italian property transactions. The notary is a public official who has State authority to validate contracts transferring the ownership of a property. The notary is also responsible for paying all land registry fees and cadastral taxes.

A notary must remain absolutely impartial

A notary may not therefore offer legal advice to any party involved in a property transaction. The notary cannot therefore act as a substitute for a solicitor in terms of representing the interests of the buyer.

In order to ensure you have proper legal safeguards, the only way is to engage the services of an independent solicitor. Only by having your own solicitor, can you be confident that no unpleasant surprises will be revealed at this late stage of the purchase process.

Deed of sale

Buying an Italian property concludes with the, “atto di vendita” (deed of sale).

The deed of sale is drafted by the notary and has to be fully compliant with the preliminary contract. In other words, the preliminary contract dictates all the essential elements of the transaction.

Translation

Should any of the parties not understand the Italian language, Italian law requires a translation of the deed of sale. Unless you have an Italian solicitor who speaks your language, the notary may also require that a qualified translator be present at the signing.

Unlike a translator, the advantage of having a solicitor with you is that should any last-minute legal issues arise at the signing, your solicitor will be able to immediately resolve these.

You should be aware that the Italian version of the deed will prevail in a court of law if any issues arise at a later stage.

Signing day

On the appointed signing day, all parties to the transaction convene, usually at the notary’s office. The notary reads the deed aloud and all parties then sign it in front of the notary. Once signed, the buyer pays the balance of the purchase price to the seller and the new owner receives the keys of the property.

New owners can collect a copy of the deed from the notary approximately one month after the signing. It takes approximately one month to register the deed at the relevant land registry office.

If the buyer cannot be present to sign the deed of sale in front of the notary, the buyer can give a power of attorney to their solicitor. This will permit the solicitor to sign the deed of sale on the buyer’s behalf.

Finally …

As a general rule, it is wise to familiarise yourself with the legal framework regulating international property sales.

For over 55 years, De Tullio Law Firm has been providing international clients with independent legal advice throughout Italy. We are specialists in cross border property, inheritance and family law.

If you would like further information about buying an Italian property, we are here to help. We can guide you through the whole process or even organise the whole process on your behalf. Get in touch with us for a free preliminary consultation.

Buying an Italian property. Glossary
  • Proposta irrevocabile di vendita: An initial formal offer with a small deposit. It contains the price you are willing to offer and any conditions.
  • Contratto preliminare di vendita: This contract sets out, in detail, the terms and conditions of the sale and also all the relevant cadastral and land registry information. Also called a, “Compromesso”.
  • Caparra confirmatoria: Italian Civil Code regulates this deposit under art.1385 of the. If a deposit is defined as a “caparra confirmatoria” its payment gives rise to legal rights and obligations on both parties.
  • Atto di Vendita: All parties sign the deed of sale in front of a public notary. The buyer makes outstanding balance of payment and receives the keys to the property. Also called a, “Rogito”.

Selling Your Italian Property. A Short Guide

/in , /by


Selling your Italian property can be a difficult and lengthy process 

To aid the process in the long run, it is therefore important to make things easier at the outset. Prior to selling your Italian property there are certain preparations that are worthwhile making.

Preparing a sales package

The first step is to gather all the legal paperwork relating to the property.

Amongst other things, this includes the title deeds which prove you are the legal owner. Also, land registry entries to show that the whole property has planning permission and complies with building regulations. In addition, the property’s certificate of habitability and energy performance certificate.

Having this paperwork before you start marketing the property will facilitate the whole sales process for you as well as potential buyers.

Marketing your Italian property

The next step is putting the property on the market. You can either do this as a private sale or through a real estate agent (agente immobiliare).

If you are appointing an Italian real estate agent, it is important to ensure that the agent is qualified and registered with the local Chamber of Commerce in full compliance with Italian law. Legislation governing real estate agents aims to guarantee professional qualification. An unregistered agent could be prosecuted for carrying out a reserved activity and may not be legally entitled to request commission. Legislation also ensures that the agent has adequate indemnity insurance to cover clients in the event something goes wrong.

It’s important to think about whether the real estate agent can market the property locally, nationally and internationally. Perhaps ask a few agents to appraise the property. And, be sure to discuss brokerage fees before you choose.

Checking Italian real estate agent terms and conditions

Usually, both the buyer and the vendor pay the estate agent commission. Estate agent commission is negotiable but is generally equivalent to 3% of the full sale price. Amongst other aspects, it is important to assess the agent. In particular, their brokerage fees, minimum sale price, duration of the mandate and their exclusivity.

Get Your FREE Guide to Selling Property in Italy

Our PDF guide covers every aspect of the selling process so you're ready to put your property on the market with confidence

Download now

Frequently, real estate agents require a foreign seller to sign standard terms of engagement. The seller must carefully evaluate this before signing. All the more so if the document is in Italian. Even with the translation of the terms of engagement into your language, the Italian version will prevail.

Reservation offers in Italy

Once a potential buyer is considering the purchase of your property, the potential buyer will generally sign a legally binding document called, Proposta Irrevocabile d’Acquisto, a Reservation Offer. Often the buyer makes a small deposit to the vendor at this point.

Both the buyer and the property vendor should sign the reservation offer. In effect, the reservation offer removes the property from the market for a period of time, usually 15 days. This allows the interested buyer exclusive rights to conduct due diligence on the property.

Property checks and searches in Italy

Due diligence includes: conducting surveys, planning and building application/permission searches, local authority and land registry searches, and legal searches.

This is where preparing your sales package before marketing your property comes into its own.

The aim of due diligence, amongst other things, is to establish that the property exists in relevant records. In other words that it is as described, and the seller has the right to sell the property in question.

That there are no mortgages/charges or any third party rights or other undisclosed encumbrances affecting the property.

The property complies with all local planning and building regulations and complies with any relevant local authority urban plan.

That the property is fit for human occupancy, unless the property is selling for reconstruction, and that the owner holds the relevant certification of habitability Certificato di Abitabilità.

The seller has complied with all the relevant Italian tax legislation by lodging tax returns, and paying tax. This includes tax which may have been due in the previous tax years. In default of this requirement, the property may be legally unsaleable.

That where the vendor is the owner of a company, the vendor is not insolvent. In addition, no application to this effect should be pending against the owner; 

That where the property is in a block of flats, the vendor is up to date with all service charges due.

Make sure the preliminary contract fits your buyer’s specific needs when selling your Italian property

Having a tailored preliminary contract will facilitate your sale. Often estate agents use a standard form for this, but this may not meet your buyer’s specific circumstances. What happens, for example, if your buyer is purchasing subject to getting a mortgage? Make sure you cover all the bases to ensure that selling your Italian property doesn’t become more protracted than it needs to be.

Conditions precedent in a preliminary contract protect all parties when buying and selling property in Italy. However, to provide protection, conditional clauses must actually be written into the preliminary contract in order for them to be legally binding.

Selling your Italian property: completing the sale

This usually takes place in the offices of a notary (Notaio). In Italy, sellers and purchasers often use the same notary to oversee the transaction. However, you are perfectly within your rights to have your own notary.

The notary will draw up the deed of sale based on information contained in your preliminary contract.

Liability relating to an Italian deed of sale, involves not only the selling and buying parties but also the notary. Failure to disclose all relevant facts about your Italian property represents a complex legal matter which can have far-reaching consequences.

Finally …

For more detailed information about selling your Italian property, we have prepared a free Guide to Selling Property in Italy. 

If you are thinking of selling a property in Italy, why not talk to us? We offer a pre-sales service. This ensures that all the legal sales-related paperwork is correct before you put your property on the market.

De Tullio Law Firm can advise and guide you throughout your Italian property selling 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.

 

You may also be interested in Selling Property in Italy. A Short Guide.

You may also like to watch our info videos regarding Italian property law.

Certificato di Abitabilità – Certificate of Habitability

/in , /by

What is a certificato di abitabilità?

A certificate of habitability, or a certificato di abitabilità in Italian. This is a document that validates the suitability of a residential property for human habitation.

The certification is issued by local municipal offices. It follows verification that the building and its systems comply with health, safety and building regulations.

Get Your FREE Guide to Buying Property in Italy

Our PDF guide covers every aspect of the buying process so you're ready to purchase with confidence

Download now

According to Italian law, prior to issuing this certificate, the competent authorities should also verify that the building complies with planning permission.

The case law of the Italian Supreme Court is unanimous. In property transactions, the vendor must supply a certificate of habitability to the buyer. Furthermore, the vendor must give the document to the buyer before, or at the latest, at the signing of the deed of sale.

“The vendor of a property intended for residential use has a duty to deliver to the buyer the Certificate of Habitability without which the property is unmarketable”. (Cass. 23rd January 2009, n. 1701).

A buyer has the right to verify that the property is suitable, that it is useable and will be saleable at a later date. Because it has direct effects on the legal use of the property as stipulated in the contract, a certificato di abitabilità is an essential requirement for all properties.

Does a lack of a certificato di abitabilità consitute a breach of contract?

Unless otherwise stipulated in contractual agreements, the responsibility to provide the certificate of habitability belongs to the vendor. Where there is a delay or a failure to supply the certificato di abitabilità, there is a clear case of non-execution of a contractual obligation (breach of contract).

Where no certificate of habitability exists, a buyer can still buy the property. However, the buyer must expressly consent to the lack of certification. In addition, the lack of certification must be included in the notarial deed of sale. The onus is on the buyer to verify the existence of the certificate of habitability before completion. It should form part of the buyer’s legal due diligence.

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.

 

For more information, you may find our buying and selling property in Italy guides useful.

Buying Italian Property: Personalise Your Preliminary Contract

/in , /by

Should you use a one size fits all preliminary contract for your Italian property purchase?

Before you sign a preliminary contract when buying an Italian property, it is crucial to think about your personal situation. For example, is your purchase contingent on getting a mortgage or do you need to sell another property in order to complete this purchase? If your purchase is subject to certain circumstances, you should personalise your preliminary contract by adding conditions precedent.

Italian estate agents often use a standard preliminary contract template. This type of one size fits all preliminary contract may not be appropriate for your situation.

In fact, generally speaking, this type of standard preliminary contract may expose you to legal risks and financial penalties. In a worst-case scenario, you may end up in court.

Tailor the preliminary contract to fit your specific needs by adding conditions precedent

Get Your FREE Guide to Buying Property in Italy

Our PDF guide covers every aspect of the buying process so you're ready to purchase with confidence

Download now

Conditions precedent protect all parties when buying and selling property in Italy. However, to provide protection, conditional clauses must actually be written into the preliminary contract in order for them to be legally binding.

During the due diligence process, if you find you are unable to meet the conditions precedent in the preliminary contract, you may withdraw from the purchase process. Examples of conditions precedent include:

– a property purchase being contingent on the buyer obtaining approval for a mortgage

– a buyer needing to complete the sale of another 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 for improvements such as changing the internal layout, an extension or installing a swimming pool.

What sort of conditions are valid in an Italian preliminary contract ?

Any condition precedent must be objective and cannot depend exclusively on the will of one of the involved parties.

According to Italian law, a condition is null and void if it is considered as merely potestative, i.e. it is considered as being 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. It is clear that all parties to the transaction stand to lose out if the buyer cannot obtain a mortgage. Under Italian law, this condition precedent 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.

We would recommend that you personalise your preliminary contract with conditions that fit your situation. You should always seek independent legal advice if you are buying property in Italy. Have your lawyer examine all paperwork before you sign anything.

Finally …

If you are thinking of buying an Italian property, 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.

 

You may also be interested in Buying property in Italy.

Italian Inheritance Tax

/in , , /by

Do beneficiaries need to pay tax on Italian inheritance?

This is a question we are often asked at De Tullio Law Firm. The answer is yes. Beneficiaries need to pay Italian inheritance tax.

Who calculates Italian inheritance tax?

Get Your FREE Guide to Planning Your Inheritance in Italy

Our PDF guide explains the ins and outs of preparing your inheritance under Italian law

Download now

When you become the beneficiary of an inheritance you may have to submit a statement of succession, “Dichiarazione di successione”  to the Italian tax authorities, “Agenzia delle Entrate”.

Firstly a succession procedure needs to be opened. Once this has happened, you can file the statement of succession. Although it is not always the case, the opening of a succession procedure usually coincides with a testator’s death. Your filing with the tax authorities should take place within 12 months of the succession procedure opening.

Once they receive the statement of succession, the tax authorities will calculate the amount of tax due on your inheritance.

It is worth noting however, that there is no obligation to file a statement of succession if the estate does not comprise any real estate. Likewise, if assets are valued at less than Euro 100,000 and the beneficiaries are a spouse, children and/or other direct heirs.

What is taxable?

In effect, Italian inheritance tax applies to the entire net value of the deceased’s estate. This therefore includes both movable and immovable assets.

Immovable assets include houses, shops, buildings, agricultural or building land.

Movable assets could for example include, boats, jewellery, works of art, bank and post office current accounts, money, investments such as shares, bonds, trust funds.

In addition, companies and shareholdings in companies are taxable. However, there are exceptions to this which would exempt heirs from inheritance tax.

How is Italian inheritance tax calculated?

Basic inheritance tax in Italy, “Imposta sulle Successioni” equates to 8% of the estate.

However, rates depend on the relationship of the beneficiary to the deceased.

The Italian inheritance tax rate drops to 6% between siblings, relatives up to the fourth degree cousins and relatives up to the third degree. This might for instance, be a spouse’s uncle. In the case of direct heirs such as the deceased’s children, spouse or registered partner, the applicable tax rate is 4%.

Summary of Italian inheritance tax rates

Heir Rate (Aliquota) Exemption up to
Spouse, relatives in the direct line of descent  (parents, grandparents, children, children’s children…) 4% 1.000.000 euro
Brothers and sisters 6% 100.000 euro
Other relatives up to grade 4, related in the direct line of descent, related in a collateral line up to grade 3 6% No exemption
Other subjects 8% No exemption

Finally …

Because Italian inheritance can be a complex matter and each case is different, we recommend that you seek expert support and advice.

If you wish to discuss your case with us or you are feeling unsure about anything related to Italian inheritance, do not hesitate to contact us for a free preliminary consultation.

You may also be interested In Planning for the future: your Italian holiday home.

You may also like to watch our info videos on the subject of Italian inheritance law.

De Tullio International Law Firm

/in , , , /by

De Tullio International Law Firm. Solid, strong, stable legal expertise

At De Tullio Law Firm we provide independent legal advice in all areas of the law. The majority of our work focuses on managing a wide range of Italian and cross border legal matters. We are specialists in property, family and inheritance law.

A passion for the law led us here

De Tullio Law Firm: Combined experience of 55 years

Giovanni De Tullio. Founding Partner at De Tullio Law Firm.

Giovanni De Tullio founded De Tullio Law Firm in 1965. In addition to being a lawyer, Giovanni was a notary (notaio) for over 30 years. As a result, Giovanni brings tremendous experience and knowledge of Italian legislation to the team. Whether clients are purchasing or selling a home, gifting a home to a child, making a will or incorporating a company in Italy, Giovanni’s understanding of the Italian State’s requirements is an invaluable resource.

Following in his father’s footsteps, Giandomenico De Tullio also became a lawyer.

Giandomenico De Tullio. Managing Partner.

After a decade working overseas at international legal firms, as well as at the European Commission, Giandomenico joined Giovanni at De Tullio Law Firm.

Aside from being a member of The Italian Bar Association, Giandomenico is also a full member of Society of Trusts and Estate Practitioners. STEP is the world’s leading professional body for practitioners in the fields of trusts, estates and related issues.

Giandomenico is also an active representative in a number of not-for-profit government organisations whose aim is to develop and promote economic and cultural relations.

Right beside you

Because we have over 55 years of experience providing independent legal advice, we understand that property investments, or planning inheritance is not just a complex legal journey but also a personal one.

Our knowledge of Italian and cross border property, family and inheritance law gives us unique insights into the processes involved. We pride ourselves on giving each of our clients the individual care that their case deserves.

Thanks to the dedication of our lawyers, associates and professional staff, we offer an extraordinarily high level of service, responsiveness and attention to detail.

De Tullio Law Firm. Serving clients worldwide

Clients include both individuals and companies seeking legal advice, support and services. Our multi-lingual team serves clients throughout Italy.

Finally …

Thank you for visiting our website. We hope you find the information useful. If there is anything you would like us to cover in an article or, if you would like to discuss a legal matter with us, please get in touch. We look forward to hearing from you.

COVID Pandemic: What’s The Impact on The Italian Property Market?

/in , /by

COVID pandemic impact on the Italian property market

If you own property in Italy or you are currently looking at the Italian Property Market, you may be wondering how the COVID-19 pandemic has impacted the real estate market in Italy.

Unfortunately, many people have lost their jobs or have had to halt professional activities during the pandemic. You might think that this will force property prices down so it would be a good time to invest in real estate in Italy.

Is that true?

Get Your FREE Guide to Buying Property in Italy

Our PDF guide covers every aspect of the buying process so you're ready to purchase with confidence

Download now

Will the COVID pandemic negatively impact the Italian real estate market?

This is not an easy question to answer. Because Italian real estate agencies have only recently restarted their activities, it is too early to evaluate price fluctuations.

Generally speaking, no matter the cause of a crisis, properties sell at lower prices if owners need cash in the short term. However, if owners don’t need of cash, it is unlikely that they will sell at lower prices to achieve a quick sale.

How will COVID effect Italian house prices?

In order to understand the impact of COVID on Italian house prices, there is an important cultural aspect to consider. For Italians, investing in the property market and has always been seen as a secure investment. In any period of crisis, property safe havens become even more relevant.

In light of the above, it is hard to say how the pandemic will actually impact Italian property prices. It is difficult to predict whether property prices in Italy will drop or remain substantially the same.

What about pre-pandemic property contracts?

The scenario might be slightly different for property purchase negotiations started prior to the pandemic.

If you signed a contract to purchase an Italian property but the pandemic caused a delay in completion, it is unlikely that your situation has changed. Once it is possible, your transaction will complete according to the terms and conditions of your contract.

In other cases, you may be able to claim a force majeure applies due to the pandemic. It depends on the specific circumstances. For example, the exact fulfilment of the contract, payment timing, breach of contract claims, etc.

Finally …

If you would like more information about how to price an offer for an Italian property or, if you need advice on the impact of the pandemic on a property contract, please get in touch.

You may also like to read about force majeure clauses in property contracts. We also have a number of info videos about buying property in Italy that you might find useful.

Italian Real Estate Agency Services

/in , /by

An Italian real estate agency’s role is to connect vendors with buyers

The first step in purchasing a home in Italy is to look for properties that you like. For this, services of a licensed Italian real estate agency provide invaluable support.

An Italian real estate agency will facilitate property transactions. The agency will provide relevant information to buyers and vendors. However, Italian real estate agencies have no legal obligation to undertake searches of a technical or legal nature (due diligence).

Clearly, a lack of due diligence could in the first instance impact the transaction itself. Further down the line, if you didn’t conduct due diligence prior to buying, you might run into issues. You may discover the property lacks of full or partial planning permission or that renovations do not conform with building regulations. Crucially, a lack of due diligence may effect the future saleability of your property.

Italian real estate agencies in Italy are of course required to disclose information based on the principles of a professional duty of care. This implies an obligation to provide information on any circumstances or issues that potential buyers should know about. Imparting incorrect or false information to an interested party is illegal.

Get Your FREE Guide to Buying Property in Italy

Our PDF guide covers every aspect of the buying process so you're ready to purchase with confidence

Download now

Italian real estate agencies have a duty of care

In 2012, the  Milan Court of Appeal heard a case regarding an estate agency’s duty of care: ruling no. 307 filed on 27th  January 2012.

Clients of a real estate agency took them to court on the grounds that the agent had failed to provide relevant information on adverse encumbrances on a property the clients wished to purchase.

The clients sued the real estate agent for a refund of the €6,000 commission fee they had paid to the agency. They argued that the real estate agency had been derelict in their duty of care. The clients claimed that the real estate agency should have communicated the existence of two mortgage transcriptions on the property. They maintained they would not have signed a reservation offer or a preliminary contract had they known. Signing the latter triggered the commission payment to the real estate agent.

The court dismissed the case.

The onus is on potential buyers to conduct pre-purchase due diligence

In support of the court decision, the judge stated that legal searches did not form part of a real estate agent’s responsibilities. In other words, technical and legal investigations, including land registry, planning, zoning and mortgage searches on a property do not form part of a real estate agent’s remit.

What does the law say about the scope of Italian real estate agency services?

Article 1759 of the Italian Civil Code requires real estate agents to notify parties of all known circumstances concerning a property transaction.

In this case,  the real estate agency had done this. They argued that as they had no prior knowledge of the encumbrances, they could not have informed the clients of their existence. The real estate agency had only become aware of the mortgage transcriptions when the clients informed them. The clients had only learned of the encumbrances when they were about to complete the sale.

There was no evidence that the real estate agency had any knowledge of the mortgages. The judge ruled they had not wilfully omitted to advise the clients about the adverse encumbrances. The responsibility for ascertaining this information did not lie with the real estate agent but, with the purchaser.

Article 1176 of the Italian Civil Code states that performance of checks and searches related to a property is not part of the agent’s professional duty of care. Furthermore, estate agents are neither legally responsible, nor qualified, to conduct in-depth due diligence.

Anything pertaining to the legal and technical due diligence of Italian property purchases should therefore be handled by legal and technical professionals.

Real estate agents facilitate the search for an Italian property

However, Italian real estate agents do not provide due diligence services.

When buying or selling a property at home, most people wouldn’t dream of entering into a transaction without the assistance of a lawyer and a surveyor. These are the professionals who conduct legal and technical searches and checks. Yet all too often, we meet foreign buyers who have decided to rely on what an estate agent tells them about a property.

Finally …

The reality is that a property transaction in Italy is an investment. It can quickly become costly – both financially and emotionally if things go wrong. In addition, there are the complexities of the Italian legal, tax and administrative systems. On top of this, there are the language barriers.

Essentially, in order to avoid any problems and before you sign any paperwork, you should engage an experienced, independent lawyer. The need for legal advice is far greater for an overseas transaction than when buying property at home.

De Tullio Law firm specialises in cross-border residential and commercial property transactions in Italy. We recommend that before you sign any paperwork with an estate agent that you seek independent legal advice.

Get in touch if you feel unsure about anything property-related and need advice.

 

You may also be interested in How to get a mortgage in Italy

Italian Properties for €1. First City To Offer The Scheme

/in , /by

€1 properties in Taranto, Puglia

Following the success of Italian hill-towns and villages, Taranto is now offering €1 properties for sale.

Taranto, a city that sits on an island between a lagoon and the open sea in the region of Puglia is offering to sell some of its abandoned palazzi through a €1 scheme.

Taranto’s city council plans to start by offering five properties for sale, with the hope that if the scheme is a success, the project will expand.

The hope is to breathe new life into Taranto’s run down but picturesque old town by attracting investment which will develop the historic centre of Taranto.

€1 is the opening bid at auction

As with all 1 Euro house schemes around Italy, sales take place in public auction (vendita con incanto).

In Italy auctions are not common. There are no legal packs, which contain essential information including property titles and searches. Detailed property information and planning permission are therefore not available. Because you cannot tell anything about the background to a property just from looking at photos, you are responsible for conducting property-related searches.

To avoid buying what seems like a bargain but subsequently turns out to be a money pit, it is advisable that you go and inspect the property and check the local land registry. before you decide to make a bid. Obviously, this may not be possible because of time constraints and it can become costly. As you may not speak fluent Italian or have the expertise to assess what you are bidding for, we would recommend that you seek independent legal advice and professional expertise in Italy to evaluate the property before you submit a bid.

Terms and conditions apply to all Italian €1 property schemes

In fact, properties for €1 usually cost at least €20.000 at auction. On top of this, there is the legal requirement to renovate within a specific time frame. Italian properties for €1 schemes therefore generally end up costing at least €50.000.

In the case of Taranto, owners will be expected to foot the bill of restoring the properties. This could run to many of thousands of euros. Owners will have to present a restoration plan within two months of acquiring the building. In addition, owners will have to occupy the properties. The latter is a condition to stop speculators renovating and selling on these properties.

Finally …

There are plenty of other reasonably-priced houses in Italy without the terms and conditions attached to €1 property schemes. These properties may be a better option for you.

If you are interested in buying Italian properties for €1 or any other type of property in Italy, we recommend you seek independent legal advice before committing yourself. We are here to help, please get in touch.

 

You may also be interested in reading more about 1 euro houses in Italy.

You may also like to watch our useful info videos about Italian property law.