Whether you are looking to buy a little place for your summer holidays or make a permanent move to Italy the property buying process can be complicated and a little daunting. There are three key stages to the Italian property buying process:
- Proposta irrevocabile d’acquisto (Reservation offer)
- Contratto preliminare di vendita (Preliminary contract)
- Atto di vendita (Deed of sale)
Once you have found the property of your dreams it is important to engage the services of a solicitor, firstly because Italian Law will differ from the law of your own country, secondly, you will be parting with a substantial amount of money and should there be a problem at any stage of the sale, a solicitor will be able to offer you support and look after your interests. A solicitor can be used whether you buy through an agency or through the vendor directly.
The first part of the buying process is ‘the Reservation offer’ (proposta irrevocabile d’acquisto). When you purchase through an agency, you will be required to sign this document. However, when making a private purchase directly from the vendor, this document is not usually used. Either way a solicitor can provide a useful support at this early stage.
By signing the proposta irrevocabile d’acquisto you will be effectively removing the property from the market but only for a limited period of time, normally 15 days. During this time your solicitor, possibly aided by a surveyor, will make all the necessary searches to ascertain whether the property is without any debts, mortgages, claims etc., therefore preventing any hidden problems from arising further along the buying process. At this stage you will be required to pay a small deposit , which is normally held by the estate agent or solicitor until the offer is formally accepted and signed by the seller. When your purchase is finalized this deposit will be included as partial payment of the property price. If the vendor does not accept the offer, your deposit will be returned to you. The buyer is not legally bound to the reservation offer until it is formally accepted in writing by the vendor, signed by both parties and at that point becomes a legally binding contract.
At this stage, buyer and seller, having agreed to go ahead with the conveyance, will formalize their agreement with the preliminary contract (contratto preliminare di vendita) also known as the compromesso. This part of the buying process sets out detailed terms and conditions of the sales. Some estate agents and private vendors leave this essential part of the process out and this is not recommended. A solicitor can draft this document or examine it for you, advise you carefully before you decide whether you will sign it. In this way you are not pressured into signing the preliminary contract and have detailed information about the property and registry information.
At this stage of the preliminary contract the deposit (caparra confirmatoria) is payable, normally equivalent to a minimum of 10% of the purchase price. This deposit will not be returned if you back out of the contract without a valid legal reason. On the other hand, if the seller changes their mind about the sale he/she will have to refund your deposit in full. You also have the right, should you wish, to claim an amount equal to the deposit through the Italian courts.
In the preliminary contract the parties also set the date to finalize the conveyance in front of the Public Notary.
The Notary is a public official who has the authority according to Italian law to validate contracts transferring the ownership of a property. He is also charged with paying all registry fees and cadastral taxes and carrying out the relevant searches on the property. The Notary is impartial to the transactions and cannot be a replacement or substitution for a solicitor. The Notary cannot represent the buyer or their interest, nor will a Notary safeguard you from hidden problems where a solicitor will.
The final step of the buying process is the “atto di vendita” (deed of sale). The deed is drafted by a Notary and has to be fully compliant with the preliminary contract. It is the preliminary contract which accordingly dictates all the essential elements of the transaction and this is why it is essential to ensure that this document was precise at the first formalized agreement. The deed of sale is signed at the Notary’s office by all those present at the signing, the balance of the purchase price is paid to the Seller and the keys are handed over to the new owners.
The Notary office will produce a copy of the Deeds of the property for the new owners usually about one month after the signing. This is because new deeds must be drafted and registered at the relevant Registry Office. Italian law requires that the deed of sale must be drafted in both Italian and English should one of the parties not understand the Italian language.
If the buyer is not able to be present for the final signing, an appointed solicitor can be given power of attorney who will sign on his behalf. At this final meeting the Notary will read and explain the contract in the presence of the parties, and if present in person the buyer will be able to read and check over the English version. Any last minute questions can be raised with the solicitor if the client has chosen to employ the services of one.
Proposta irrevocabile di acquisto : This is where an initial formal offer is made and a small deposit is left. The price you are willing to offer has been determined and also any conditions you may wish to make.
Contratto preliminare di vendita : This is the contract that sets out in detail the terms and conditions of the sale and also all the relevant cadastral and registry information. It is also known as a Compromesso.
Atto di Vendita : The moment when in front of a Notary public the exchange of contracts is made, the outstanding amount of the purchase price will be paid and the keys to the property will be handed over to the new owners.
Caparra confirmatoria : This is a deposit that is regulated under art.1385 of the Italian Civil Code. If a deposit is defined as a “caparra confirmatoria” it endows legal rights upon both parties.
Please note, any statement made in this article is intended to be a general practical introductory explanation only and not formal legal advice. This firm accepts no liability or any responsibility for any statement made.
De Tullio Law Firm