Tag Archive for: Notaio

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”.

Renovating a house in Italy: Safety Requirements

/in , /by

Renovating a house in Italy. Health and safety law

Who is liable for compliance with safety requirements when renovating a house in Italy?

In the case of even minor construction work the, “works manager” is responsible for safety. This is usually an architect, engineer or designer. However, if the owner of a property directly procures the services of a worker, the homeowner is acting as the works manager.

This means that the homeowner is responsible for safety. Likewise if there is an accident, the homeowner is liable to criminal and civil consequences.

Imagine you hire a plasterer to render a wall and the plasterer falls off a ladder. Or, you find an electrician to rewire your property and the electrician gets electrocuted.

You, as the homeowner, are liable. Even if you are not around at the time of the accident. As the legal owner of the property, in the eyes of the law, you are the employer of the injured worker.

Get Your FREE Guide to Building and Renovating Property in Italy

Our PDF guide covers everything you need to know before you start renovating or building a property in Italy

Download now

The risk of criminal and civil prosecution

Your liability for the accident is not only of a criminal nature, for culpable injuries caused to the worker, but also of a civil nature.

In other words, you may be liable to pay compensation. Compensation for a broken limb can amount to several thousand euros. In a worst-case scenario, compensation may be enough to see your property seized.

This is a very intricate legal issue based on technicalities regulated by Italian law. If you are planning refurbishment work on your property in Italy, make sure you meet  safety requirements.

Homeowner liabilities

When renovating a house in Italy, you are legally responsible for ensuring safety requirements.

Italian law takes the view that anyone regarded as, “non-professional”, such as a homeowner, who procures the services of a third party to carry out any type of home improvement, is responsible for ensuring that workers operate in accordance with health and safety legislation.

Safety requirements. A case study

Recently, the Supreme Court examined an appeal filed by a homeowner plaintiff who had commissioned a construction company to paint the exterior walls of a cottage. During the work, a painter fell through a hole in the paving. The painter fell several metres into the basement and tragically later died. The hole that caused the accident had previously been covered with boards. However, the boards had been removed by another worker and replaced with polystyrene, which was not strong enough to bear the weight of the painter.

The court of appeal upheld previous rulings which established that the homeowner had a duty of care in relation to the execution of the contract. In this case, the court identified several failures. In the first instance, the absence of a risk assessment plan. Secondly, a lack of maintenance on walkway around the cottage and risks posed by the opening into the basement. Thirdly the court considered that there had been a failure to supervise and inform workers at the property.

Safety requirements are an employer’s responsibility when renovating a house in Italy

The court found the homeowner at fault for these failures. Safety obligations are the exclusive competence of an employer, who in this case was the homeowner. In effect, the homeowner was acting as the painter’s employer. While the work was of a “domestic” nature, the court found that the homeowner was not exempt from performing the duties of works manager. In other words the accident occurred because of the homeowner’s failure to take responsibility for his employee’s safety. And the homeowner’s negligence to act in the role as designated works manager.

In cases such as this, it is, therefore, crucial to underline the homeowner’s obligation to point out any dangers on site and wherever possible, to provide for their elimination before work starts. Unless a homeowner can prove they exercised a duty of care and took all measures to provide a safe working environment, they will be held liable.

Health and safety requirements in Italian building contracts

When a homeowner engages a contractor, it is important to have a written contract. This should indicate that compliance with safety regulations is the contractor’s responsibility. This way it becomes clear, from a legal point of view, that the contractor is responsible for safety on home renovations in Italy.

Finally …

Whether you are building a new property in Italy, or renovating an existing Italian property, having the right building contract is vital to ensure that everyone involved knows their rights and responsibilities.

De Tullio Law Firm is a legal firm present throughout Italy. We have over 55 years of specialist experience dealing with issues related to property, construction and renovation matters. If you are thinking of undertaking building or refurbishment on your property in Italy, or if you are in a difficult situation concerning liabilities and safety requirements through refurbishment work, we are here to help. Get in touch with us at: info@detulliolawfirm.com

 

You may also be interested in Off-plan property in Italy – Where do you stand legally?

You may also like our info videos on the subjects of Italian property, succession and family law.

Buying a House in Italy Can Be A Nightmare

/in , /by

When buying a house in Italy, before you sign any paperwork, seek professional advice

Buying a house in Italy is a serious investment and often the fulfilment of a dream. Italy’s unique real estate laws and local customs all lead to the recommendation of having the right team of advisors in place to make your experience successful.

A couple from Bristol found a house in the Abruzzo that they wanted to buy. The vendor’s real estate agent got them to sign a Proposta di Acquisto (reservation offer).

The estate agent passed the reservation offer to the vendor. The offer basically stipulated the price the couple was willing to pay for the property. It included the couple’s cheque for a €5000 deposit, made payable to the vendor. The vendor accepted the couple’s offer, took the cheque, and the deal became irrevocable. The estate agency also asked the couple for their brokerage fee of 3% of the purchase price, which they immediately paid.

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

The couple then discovered that the charming outbuilding with self-contained accommodation had no planning permission. Getting the building regularised would entail fees for a geometra (surveyor) and tax to the local municipality. The outbuilding would be subject to a demolition order if the permit was not granted. The couple even faced the risk of prosecution for illegal construction. The vendor had no intention of remedying the situation and there was no recourse for the couple. The couple was stuck in a nightmare scenario and yet, the whole thing was easily avoidable.

Teamwork makes the dream work

As a foreigner buying a property in Italy, before you sign any paperwork which may be legally binding, make sure you have the right team of advisors working for you.

Choose your own geometra to assess the integrity of a building’s structure. Check whether planning permission exists and, if necessary, what the costs would be for putting things right. You may also want to ask a geometra about the geology of the location. How prevalent are natural hazards such as landslides or earthquakes?

Engage your own lawyer. Your independent legal advisor will examine titles, zoning matters and review all paperwork associated with buying a property. A lawyer can save you money by helping you negotiate the deal and will ensure your rights are protected.

Italian law requires that all property and land transactions complete through a notary. Notaries work for the Italian State to ensure that transactions happen in accordance with Italian law. They ensure that purchasers pay all the relevant fees and taxes and register the deed of sale. Choose your own notary.

Independence is key when buying property in Italy

We cannot emphasise enough the importance of seeking independent advice. Choose your own professionals. While the estate agent or vendor may recommend professionals with whom they cooperate, you should bear in mind that estate agents and vendors have a vested interest in selling the property to you.

Finally …

At De Tullio Law Firm, in addition to full conveyancing services, we offer a property background check. This is a  pre-purchase service, which identifies and prevents problems such as the ones encountered by the couple from Bristol.

Likewise,  for those looking to sell their Italian property, we can help you prepare a pre-sales package that includes all the paperwork potential buyers will be looking to gather prior to making a purchase decision.

For more comprehensive information about the Italian property purchasing process, you might like to read our guide. If you would like to discuss your situation or, if we can be of assistance, please get in touch.

 

You may also be interested in Insider Tips for Buying A Property in Italy

Holding Accounts in Italy. Property Completion funds

/in , , /by

Keep your property completion money safe

On 29th August 2017, Italian legislation saw the introduction of holding accounts. The legislation governing payment for the purchase of Italian residential and commercial real estate is part of the Italian Law of Competition.

The law aims to provide better protection to both property buyers and sellers.

Holding accounts are applicable to funds for the completion of the purchase of Italian property. Deposits connected with a reservation offer and preliminary contracts are not subject to this legislation.

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

The buyer and/ vendor must request their chosen notary to use a holding account. In other words the notary doesn’t automatically use holding accounts.

In addition, the buyer can request the notary to keep funds in a bonded account. Again, the onus is on the buyer to specifically request that the notary use bonded holding accounts. As this may generate problems with the seller, we would recommend that the preliminary contract include a clause that all parties authorise the notary to hold completion funds in bonded holding accounts.

How do holding accounts work?

The buyer acquires legal ownership of the property at the signing of the deed of sale. However, by using a holding account, the notary will delay payment until after registration of the deed.

Following signature by all parties to the transaction, the notary has 30 days to register the deed of sale with the relevant land registry authorities.

Once registration of the deed takes place, the buyer can be certain that the purchase has been completed smoothly. Tranfer of funds to the vendor can then take place.

Keeping funds in holding accounts therefore provides protection to the buyer between signing the deed of sale and its registration.

Between signing and registering the deed, adverse entries pertaining to the property can come to light. Issues might include outstanding debts, mortgages, encumbrances, court applications for seizures and foreclosures.

The Law of Competition states that when purchasing property, all outstanding payments by the buyer to the seller should be kept in dedicated holding accounts belonging to a notary. This sum also includes any amounts the vendor may require to settle liabilities. For instance, the vendor may still be paying off a mortgage on the property. In this case, the buyer would pay the entire balance of payment for the property into the notary’s holding account. However, a part of this will serve to redeem and cancel the vendor’s mortgage lender once the purchase is complete.

Do all notaries have holding accounts?

The Law of Competition stipulates that a notary must have a holding account in which the notary can receive funds from clients for the delayed payment of real estate property.

A notary has no entitlement to any interest accruing to these holding accounts. Nor can a notary use funds for any other purpose than the payment of a particular property.

Furthermore, if a notary has debts, creditors can not foreclose on money deposited in holding accounts. Should the notary die, any funds in holding accounts do not constitute part of the notary’s estate. And in the event of death, funds do not form part of the notary’s matrimonial property regime.

Finally …

If you are looking for further information about the Italian property purchasing process, you might find our comprehensive guide helpful, or if you need independent legal advice,  please get in touch for a free consultation.

 

You may also find Buying Property in Italy useful.

Italian Law of Succession

/in , , /by

Italian Law of Succession – An Overview

Italian Law of Succession in Italy follows the Roman Law principle. This means it provides some protection to close members of the family. This therefore, partially limits the right of the testator to dispose of assets.

Testamentary Succession consists of the assignment of hereditary assets in compliance with the wishes of the testator as set out in an Italian will. In the absence of a will, inheritance devolves following the principles of Legal Succession.

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

The rights of heirs in Italian Law of Succession

Where there is no will, succession law gives rights to a number of legitimate heirs to the assets of the deceased. These heirs are the spouse of the deceased and relatives that the law identifies as starting from closest kin to those up to a 6th degree of connection.

Inheritance law in Italy reserves a significant quota of an inheritance to very close relatives. The deceased’s spouse, registered partner, ascendants and descendants are all known as, “forced heirs”. This means that the testator cannot exclude them even through the means of a will. When drafting an Italian will, the testator is only able to dispose of a part of his assets. The testator can assign this, “disposable quota” to non-relatives.

The basis of Italian Law of Succession is unity of inheritance. This distinguishes between movable and immovable assets

To clarify, the law of the country of last domicile deals with any movable assets. Movable assets could, for instance be furniture, cars, jewellery, works of art, bank and post office current accounts, money, investments such as shares, bonds, trust and managed funds.

On the other hand, the law of the country where an immovable asset is located applies. Examples of immovable assets include houses, shops, buildings, agricultural or building land.

Therefore, the law of the country where a property is located will apply, unless in accordance with EU Regulations, a choice of country law is stipulated in a will.

The Italian succession procedure formally ends when all assets, rights and pending payments have been transferred to the rightful heirs either by mutual agreement or as consequence of judicial proceedings.

Finally …

For more in depth information about Italian succession, you might find our Succession Guide useful. If you would like to discuss a case, you can reach us here for a free consultation.

Cross border inheritance in Italy

/in , , /by

Italian inheritance law

Many of our clients own property at home and here in Italy. We frequently receive questions about how cross border inheritance in Italy works.

Law no. 218 of 31st May, 1995 regulates the field of Italian inheritance law in the framework of international private law.

Habitual residence of the deceased at the time of death determines the national law which governs succession.

Italian Inheritance legislation adopts the principle of “unity of inheritance”. This principle differs substantially compared to legislation in common law countries. Italian law makes a distinction between a division of movable and immovable assets. Movable assets are subject to the law of the last domicile or last residence of the decedent. Immovable assets are subject to “lex rei sitae” (law of the country where property is located).

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

One of the most important consequences of asset divisions is that, if a decedent’s estate includes properties located in different countries, the succession of each individual property could be regulated by the law of the country where the property is located.

Cross border inheritance law: deferment to the law of another country

Italian rules governing conflicts of law consider the possibility that the national law of a deceased foreigner might defer to the law of another country.

Here is a practical example. A deceased English national resident in England owned property in Italy. The law of England and Wales therefore governs succession. However, in accordance with the conflict of law of England and Wales, the law applicable to properties abroad is, “lex rei sitae (law of the country where the property is located). This means, Italian succession law governs the assets in Italy.

In 2015, the EU introduced regulations whereby a testator can elect which country law should regulate all assets. This could be the law of the country in which the testator is habitually resident or the country of the testator’s nationality. This choice of law has to be formally expressed in a will. In addition, it must not prejudice the rights that the Italian law provides for forced heirs, “legittimari”. These are members of family, resident in Italy when the testator dies. Although it may be against the testator’s wishes, forced heirs must receive a legally determined share of the estate.

An Italian will is the best option to manage cross border inheritance in Italy

If you own assets at home as well as in Italy, it is highly advisable to draft an Italian will for your Italian assets. In order to limit the consequences of “legal succession”, you should seek legal advice in this matter.  If a decedent died intestate, that is without a Will, Italian Inheritance law determines which relatives of the deceased have a right to inherit an estate. This will primarily be the spouse, the legitimate and natural children, and any ascendants. Where no heirs are traceable, Italian assets go to the Italian State.

Finally …

If you would like more details about Italian succession law and procedures, we have produced a comprehensive Italian Inheritance Guide, which we hope you will find helpful. If you would like to discuss a specific case, we are here to help.

Italian Estate Administration

/in , , /by

“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.

Want to Learn More About Inheritances Under Italian Law?

Download your FREE copy of our guide to answer all your questions

Download now

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.

English-Speaking Italian Property Lawyer

/in , /by

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.

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

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

/in , /by

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.

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

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.

Off-Plan Properties in Italy: Delivery Delays

/in , , /by

Late delivery: one of the risks in buying Italian off-plan properties

This article is part of a series about the risks of buying off-plan properties in Italy. To read more on the topic, please use our search tool to look for off-plan properties in Italy.

Significant delays in delivery of Italian off-plan properties is one aspect that investors report as being particularly irritating.

Developers and builders can be very persuasive. Whatever you do, don’t feel obliged to sign anything without first seeking independent 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

Penalty clause for late delivery of off-plan properties

Broadly-speaking, a penalty clause is a contractual provision which levies a monetary sum in the event of a breach of terms in the contract. It does not include any compensation payment for actual damages.

Buyers often try to insert a late delivery penalty clause into their contracts for off-plan properties in Italy. However, penalty clauses are generally unenforceable and ineffective under Italian law. 

Generally, the off-plan developer or builder draws up a contract. Often these are major companies. The buyer is therefore unlikely to be able to mutually agree a penalty clause. The agreement will therefore unilaterally favour the company.

The importance of a preliminary contract

The Preliminary Contract (Compromesso) is key in off-plan property purchases. If they are fortunate, off-plan buyers may manage to insert a penalty clause in the compromesso. This would see the refund of a buyer’s deposit. However, in accordance with binding terms of the contract, the buyer would still have to wait for the developer or builder to deliver the property.

Termination clause for late delivery of off-plan properties

A more effective legal safeguard would be to integrate an express termination clause in the compromesso. In effect, the termination of the preliminary contract would automatically occur – whether or not the buyer notifies the seller of the intention to terminate.

To make the clause enforceable and effective, the compresso must explicitly reference the length of delay.

If the seller exceeds the delivery date, either party can negotiate an extension and a new compromesso. Or, the buyer can claim a refund of deposits and/or any other advance payments.

Essential Term

Unfortunately, buyers of Italian off-plan properties sometimes sign a compromesso which promises more than it can deliver. Then, when delivery day arrives and buyers do not receive the keys to their property, the buyer discovers that the Italian law does not provide much protection.

If a compromesso does not include an express termination clause, the buyer can send the developer or builder a formal request to respect terms and conditions. Italian law calls this particular provision an, “essential term”.

The buyer’s formal request should warn the vendor that failure to respect terms and conditions will terminate the contract. The vendor must fulfil contractual obligations within a certain time, which cannot be less than 15 days.

Case law

In a recent court case, where the vendor had failed to comply with an, “essential term”, the Court of Vicenza (judgement n.187/2016) ruled that:

“whenever a delay is considered unbearable, it is possible to start legal proceedings against the builder, or the building company, and to obtain a refund of any advance payments. Furthermore but, only in the case of proven damages, the purchasing party can claim additional compensation”.

Either way, before taking legal action to resolve the situation and/or to make a claim for compensation for damages, an amicable settlement is always preferable. Because legal action through the Italian courts can take at least 5 years and can be very costly, an amicable settlement is likely to be quicker and more favourable. It is the route we would recommend.

Finally …

There are a number of risks involved in off-plan purchases. At De Tullio Law Firm, we are property law specialists. We are present throughout Italy. We would always recommend that you engage a lawyer you choose to ensure that you protect your interests. If the vendor recommends a lawyer, we would caution against it on the grounds of conflict of interest. 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 purchasing off-plan properties in Italy, we are here to help.

 

You may also be interested in Off-Plan Property in Italy: Insurance And Guarantee. You may also like to watch our info videos about Italian property law.