The Italian legal system is very different from the English. Conveyancing is strictly governed by Italian Law and can be performed only by a public notary (Notaio), who is a qualified professional and public officer. Only in front of Notaio it is possible to complete the purchase of any real estate.
THE PRELIMINARY CONTRACT (Contratto preliminare or compromesso)
If you are still happy with the property then the next step is to go ahead with the preliminary contract (compromesso). The compromesso is a significant commitment and involves the payment of a deposit to the seller as an act of good will and undertaking. The purpose of the compromesso is to clarify all the conditions of the sale, including the purchase price and term of payment.
The compromesso can be drawn with the agreement of both parties. It is a golden rule to get a legal advice by an Italian lawyer before signing it. It is very important the buyer not to sign the compomesso unless He is perfectly happy and aware with everything written in the contract. Remember the buyer is in a position to impose conditions or restrictions on the vendor at this stage (e.g. see an example of compromesso conditioned to get planning permission.
The signing of the compromesso which involves both the vendor and the buyer or their power of attorneys must take place in the presence of the notaio. At the time of signing, the buyer must pay a deposit of between 10 and 30 % of the sale price. Should the buyer not to go through with the purchase after signing compromesso, he will lose the deposit paid and may be sued by the vendor. If, however, the deal does not proceed because of the vendor, the buyer has the right to demand up to twice the amount of the deposit paid in compensation. In this case the buyer may also claim damages and have the sale compulsorily completed by a Court order (art. 2932 Italian civil code).
CAPARRA PENITENZIALE
If there is any doubt in the mind of either the buyer or the vendor as to the final completion of the sale, it is possible to state in the compromesso that the deposit is a caparra penitenziale (withdrawable). This will prevent any further legal proceedings or claims for damage. However, in the case of the buyer ‘s breaking contract, he or she will still have to lose the deposit to the vendor, and in the case of the vendor’s withdrawings, he or she will still have to pay double the deposit amount to the buyer.
If both parties want a quick sale and have no differences concernings conditions, price or otherwise, it is possible to have the actual transfer of the property written into the compromesso.
COMPLETION (ATTO)
The atto is the final act, when the Notaio certifies the parties’ identity and witnesses the transfer of title from one party to the other and collects the taxes due on the transaction. With all parties present the notaio will identify them, one by one, and then read through the rogito (completion document) in detail, making sure that everyone understands what is being bought and sold. With all in agreement, the notaio will ask each party to sign before he signs and adds his official stamp to the document. In case of absence of either one of the parties he will certify the signature of the procura speciale (power of attorney). At this moment of the completion the buyer has to pay the remaining balance of the purchase price, plus taxes and notaio fees.
REGISTRATION OF THE TITLE
In Italy there are two different Official Land Registries: the Catasto and The Conservatoria dei Registri Immobiliari. Once the transaction has been completed, the notaio will register the transfer of the title by the vendor to the seller into the Conservatoria Registry; this is very important, should another person registers another atto earlier than you, the other will beat your title and become the new owner.
GOLDEN RULE
Check the vendor’s title before starting with conveyancing in the Conservatoria Registri Immobiliari entering the seller’s name (Italian Lawyers and Notai can do this for you with their dedicated internet access). This is the only way to check the good title and if there are any charges on the property (e.g. mortgages, Court Order, Court Proceedings in course relating to the property etc…) . In the Catasto you can find only the exact id. number of the land without being sure with the name the owner.
Make sure the Conservatoria does not contain any adverse entries at 3 stages: a) Before putting your offer and signing the compromesso b) after signing of the the compromesso c) immediately after the atto.
Avoid the other pitfalls in buying property in Italy (neighborough farmer’s pre-emption right, planning permission denied, regional environmental legislation, geological and sismic reports)
Avv. Carlo Bottino
Lawyer in Milan