Real Estate Law

Buying & Selling Property in Italy

This memorandum is intended to provide information regarding the acquisition of real property in Italy, with a specific focus on business property. It is important to note that the Italian legal system, in consideration of its particular historical background, attributes to a notary (Notaio) a predominant role in drafting the purchase agreement of land or buildings.

Contrarily to what generally happens in common law countries, where the role played by the lawyer in real estate transactions is exhaustive, Italian lawyers are involved in such commercial transactions mainly in the preparatory phase which consists in the conducting of due diligence and negotiations between the parties.

In any event the following information will be applicable in both legal systems.

Acquisition of Real Property

A. The Preliminary Contract

A preliminary contract (contratto preliminare) is the document whereby the parties agree in writing to enter into a future final real property purchase agreement. This document must be signed by Notary and must be recorded in the official real estate register (Conservatoria dei registri immobiliari) in the jurisdiction where the property is located. The buyer may be required to guarantee that he does not have any type of financial constraints which may jeopardize payment of the property. Before signing the contract, it is advisable that the buyer obtains the following documents from the seller:

• a property deed (atto di proprietà).
• cadastral, or land registry, documents (scheda identificativa catastale);
• a report which indicates the size and dimensions of the real property;
• copy of lease and loan contracts, if any;
• agreements entered into with the local municipality such as administrative petitions, permits, licenses, etc., if any.

B. The Security Deposit

The security deposit (caparra confirmatoria) is a down-payment of the purchase price, made by the buyer upon the signing of the preliminary contract. It is intended to bind both parties to enter into the final agreement. If the buyer refuses to enter into the final agreement, the deposit will be forfeited, whereas if the seller refuses he is obliged to pay double the amount deposited by the buyer. The seller always demands payment of a security deposit.

C. The Penalty Deposit

A penalty deposit (caparra penitenziale) may be required by both parties and is intended as a pre-determined penalty to be paid by the party that does not fulfil the obligations provided for in the preliminary purchase contract. This system allows each party to refuse to sign the final deed, against payment of a pre-determined amount. It is advisable for the buyer to require a substantial penalty fee, in order to avoid that the seller changes his mind, or sells the property to a third party who places an offer that exceeds the original purchase price.

D. Final Purchase Deed

The last step in acquiring property is the signing of a final agreement (rogito). The deed is the legal instrument by which the property is legally transferred from the seller to the buyer. The deed will be drafted by a notary. Upon signing the deed the buyer shall present a personal identification document and his fiscal code (codice fiscale). Foreigners that are not domiciled in Italy can request an Italian fiscal code. The documents to be presented by the seller should be the following:

• the notarized deed of acquisition of the property which is being sold or the documents showing that the seller has inherited the property. Usually the inheritance tax return is utilized.
• the administrative licenses, permits and petitions;
• the property plans and the cadastral certificates;

It is customary that the buyer is granted the right to choose the Notary that will notarize the deed. The notary has the obligation of controlling (in the local property register and cadastral offices), prior to the signature of the deed, if the property is transferred to the buyer in the same legal status declared by the seller in the preliminary contract (free of mortgages, encumbrances, etc.). If nothing has been declared in the preliminary contract, the notary public has the professional obligation of making the buyer aware of any existing mortgages or encumbrances, etc.

Other Assets

Other assets to be taken into consideration: bank accounts, pensions, insurance policies, stock portfolios, paintings, coin collections, personal items, etc.

Ambrogio&Gaetani Law Firm
Lungarno A. Vespucci 58 - 50123 Florence (Italy)

Phone number (0039) 055 23 81 442
Fax number (0039) 055 23 81 441
General Info E-mail info@italylawfirms.com