First-time property purchases and Force Majeure

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Frequently, property buyers in Italy decide to take advantage of tax reductions available for first-time property purchases, namely a registration tax of 2%, aFirst-time property purchases fixed cadastral tax of €50 and a fixed mortgage tax of €50. To benefit from fiscal reductions, purchasers must transfer their residence to the Municipality in which the property is located, within 18 months of signing the deed of sale. Missing the transfer deadline entails the loss of tax benefits and heavy fines unless there is an extraordinary event or circumstance that constitutes a force majeure. Examples of a force majeure event might be an earthquake, seaquake, flood, landslide. In general, any event deemed to be beyond man’s control, which renders the property uninhabitable. Read more

The right to back out if there is no certificate of habitability

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The right to back out of signing the final deed of sale if there is no certificate of habitability

Last November the Italian Supreme Court of Cassation ruled that buyers can refuse to enter into the final deed of sale if the residential property they have promised to buy has no certificate of habitability (Court of Cassation., section II, 26th November 2015-8th February 2016, n. 2438).agibilità

The Certificate of Habitability certifies the suitability of a residential property as being fit for human habitation. It is issued by the competent municipal offices following verification that the building and its systems comply with health, safety and structural regulations. According to law, prior to issuing the certificate of habitability, the competent authorities should also verify that the building complies with planning permission.

Following purchase of a property in Italy, owners will need the certificate of habitability to get utilities and municipal services for their property. Read more

Buy off plan property in Italy

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Buy off plan property in Italy

Tips for purchasing off-plan properties

This article and tips were provided, by De Tullio Law Firm, to the British Consulate in 2011. Although the article pertains to a Calabrian case, information is relevant to all off-plan property purchases in Italy.

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

For people thinking about purchasing property we offer the following tips:

  • Seek legal advice before signing a contract and paying any money up front:  afterwards it may be too late. Choose your own independent lawyer. We advise you not to use lawyers recommended by the developer or contractor in order to avoid possible conflict of interest.
  • Similarly, use  an independent Notary Public for the drawing up and signing of the contract. You are not obliged to use the one proposed by the developer or contractor and indeed, again for the same reason given above, we would advise against it.
  • Remember that only the Italian version of the contract is valid in an Italian court. So either commission the translation yourself from an independent translator or have any translation which has been provided for you checked over  for discrepancies by an independent qualified person.
  • The amount paid in deposit for an off-plan development should be up to around 10%. Seek legal advice if you are asked for more than that.
  • As the building  work progresses, the contractors should accompany any request for further payment with a list of the work done (‘stato avanzamento lavori’) which can be verified if necessary by an independent surveyor or architect before payment is made. This procedure should be indicated in the preliminary contract.

We are advised by lawyers that when you buy off plan you are entitled to receive a bank loan guarantee that should be annexed to the preliminary contract. In case of bankruptcy that bank loan guarantee will often represent the only protection of your investment. If you are obtaining bank loan guarantees, have a qualified professional check that they are legally compliant.

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.

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Italian Property Buying Process

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buying process

At What Stage of the Buying Process Should You Contact a Property Lawyer in Italy?

People planning to buy an Italian property frequently ask me at what point of the buying process they should involve a lawyer.

On the one hand, people worry that if they contact a lawyer too soon, they will end up wasting their time or incur unnecessary additional costs when they might not actually proceed with a property purchase immediately. Read more

Buying properties in Italy is a major decision

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buying properties

Buying properties in Italy is a major decision. Proceed with caution. Do your research. Always get independent advice.

Continued slow economic growth in Italy is helping to keep property prices low and therefore attractive for those looking to invest. Interest rates show no sign of substantially increasing in 2016 either in The UK or in the Eurozone. 2016 is therefore looking to be another year when many Britons will purchase an Italian property.

Each year, I am engaged by clients whose Italian property purchase started out as an impulse decision, driven more by emotional than rational considerations. Unfortunately, at some point during the purchase, the dream has turned in to a nightmare. All sorts of additional costs are incurred; costs which could have been completely avoided if legal advice had been sought prior to purchase. Read more

Legal requirements for preliminary contracts in off-plan transactions

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Preliminary contract

Definition of legal requirements for preliminary contracts in off-plan transactions

The legislative decree 122/2005 introduced very strict requirements for preliminary contracts concerning investments in off-plan properties in Italy.

Following art.6 of the above mentioned legislative decree the preliminary contract should also contain:

  • A full description of the parties.
  • Identification details of the property, including the cadastral reference of the plot – A description of the property is required including of those outbuildings for the exclusive use of the buyer, the object of the contract.
  • Details relating to the building license or the request for the building license – The law explicitly requires the mention of any burden connected with the building license.
  • Technical data relating to the building – The law requests a summary of the technical data in the preliminary contract. Such data will be described in detail in the attachment concerning technical specifications (capitolato). Such specifications cannot be modified without the agreement of both parties.
  • A deadline for completion.
  • A method of payment – The entire price should be declared, also specifying the amounts paid as a deposit. Payments should be executed by using bank transfers or other means that are traceable and that will leave a clear trail.
  • Details of the bank guarantee – The bank guarantee should be delivered at the signing of the preliminary contract. Such a guarantee should be issued prior to, or upon signing of, the preliminary contract.
  • The presence of mortgages or any other type of burden – In the presence of a mortgage opened by the construction company covering an entire compound that shall be parcelled out amongst several buyers, the notary will not be entitled to sign the Deed of Sale until the parcelling out of the said mortgage to the individual buyers has been completed.
  • The presence of the contractors together with proof of their identities.

The preliminary contract should also have the following attachments:

  • Technical specifications of the property, detailing all the materials to be used in the construction, a list of agreed finishes and fittings.
  • Copy of the Plan submitted to file the request for the building license.

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

A preliminary contract not in compliance with the requirements of articles 6 could be affected by nullity on the grounds of its contrasting with mandatory rules (public policy).

Since the above-mentioned legal requirements are set in order to protect the interests of the buyer, the invalidity of the preliminary contract can be objected to only by the buyer.

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.

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What is a certificate of occupancy?

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Certificate of occupancy in transactions of properties in Italy

The Certificate of Occupancy (also called Certificate of Habitability) certifies the suitability of a residential property as being fit for human habitation.

It is issued by the competent municipal offices following verification that the building and its systems comply with health, safety and structural stability regulations. According to law, prior to issuing the certificate of occupancy, the competent authorities should also verify that the building complies with planning permission.

The case law of the Supreme Court is unanimous in stating that in real estate transactions the certificate of habitability is one of the documents that the vendor must deliver to the buyer before completion. As a matter of fact the buyer has the full right to verify that the property is suitable to satisfy his legitimate interest, that is the usability and marketability of the property. The above mentioned certificate can be considered an essential requirement of the building because it has direct effects on the legal use of the property as stipulated in the contract.

Unless otherwise stipulated in contractual agreements, the responsibility to provide the certificate of habitability belongs to the vendor. In case of delay or failure to deliver a certificate of habitability, there is a clear case of non execution of a contractual obligation (breach of contract). A recent decision by the Supreme Court states that, “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. 23 of January 2009, n. 1701).

In case of absence of certificate of habitability the property can nevertheless be transferred with a notarial deed of sale but only with the buyer’s express, written consent. Verifying the existence of the certificate of habitability before completion of the purchase of a property should certainly be part of the legal due diligence.

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.

Contact us today. We can help.

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Italian real estate attorneys and Italian inheritance attorneys

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