BUYING PROPERTY IN ITALY
Tuscany, with its charming medieval hill towns and fantastic capital Florence, has long been a favourite spot for those looking to invest in the Italian property market. From the smallest hamlet to magnificent villas, Tuscan property has something for everyone - beautiful classic stone farmhouses with open views, cypress trees and coloured villas.
Purchase of property in Tuscany, Italy involves 3 key stages:
- Proposta irrevocabile d’acquisto (Reservation offer)
- Contratto preliminare di vendita (Preliminary contract)
- Atto di vendita (Deed of sale)
Once the property has been chosen, we advise all clients to seek out professional advice. The Italian purchasing and selling process can be quite complex and correct professional support will help resolve any questions which may arise along the way. This process can save the purchaser both time and money. An Italian legal professional’s knowledge of real estate laws and regulations can be invaluable.
When buying a property in Italy the first document needed is a proposta irrevocabile d’acquisto (a reservation offer).
By signing the reservation offer, the future owner will secure the removal of the property from the market for a limited period of time, normally 15 days. During this interval the future owner’s solicitor, who may also be assisted by a surveyor when needed, will make all the necessary searches to ascertain that the property is without any debts, mortgages, claims ensuring that there will be no unpleasant and possibly costly 'surprises' during the final phase of the purchase. At this stage the future owner is required to pay a small deposit which will be determined and agreed upon by both parties.
The buyer and seller will then proceed to formalise the agreement with the contratto preliminare di vendita (preliminary contract).
The preliminary contract sets detailed terms and conditions for the sale. For this reason it is highly recommended to engage the services of a professional fiscal legal advisor, as one of their functions is to draft this contract examining all aspects of the property including the seller’s full right of ownership, that the property be free of all encumbrances and covenants, the land registry and town planning/regulatory compliance- all before the final sale contract is signed and confirmed.
One of the essential legal elements of the preliminary contract is the payment of a caparra confirmatoria (a deposit), usually equivalent to a minimum of 10% of the purchase price. This deposit will not be refunded if the future buyer breaks off the contract without a valid motive. If the seller changes his mind, about the sale, however, he/she will have to refund the deposit paid in full. The future buyer also has 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 finalize the deed in the presence of a Public Notary.
The Notary is a public official who, according to Italian law, has the authority to validate contracts transferring the ownership of a property. The Notary is also charged with paying all registry fees and cadastral taxes and for carrying out the relevant searches on the property. Only by having engaged a legal professional beforehand can the future buyer be confident that no unpleasant surprises will be revealed at this late stage of the purchase process.
Final Contract – Atto di vendita (Deed of Sale)
The final step of the process is the so called atto di vendita (deed of sale). The deed is drafted by the 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. Once this deed has been signed by both parties, the balance of the purchase price is paid to the seller and the keys are handed over to the new owners.
A copy of the deeds will then be given to the new owners approximately one month after signing. This is because it takes approximately one month for the new deeds to be 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 cannot be present in front of the Notary, he can give power of attorney to his solicitor who will sign on his behalf. 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, with the buyer’s own bilingual solicitor present, questions and queries can be raised by or on behalf of the buyer with the support of his/her own solicitor.