THE PURCHASING CONTRACT & PROCEDURE IN ITALY
When you have decided to buy a property in Italy, you have to take a number of things into consideration once you have found the house of your dreams:
– The purchase proposal
– The preliminary contract
– The notarial deed
1- THE PURCHASE PROPOSAL:
Normally, the drawing up of a written purchase proposal (proposta d’acquisto) is the first formal step you have to make.
With this, you communicate as an intended buyer your bid price to the vendor as well as the possible terms and conditions whereunder, such as the terms of payment, the validity of the proposal, the time schedule till the notarial deed and the possible suspensive and/or resolutive conditions (e.g., the grant of a mortgage loan from the bank).
To show evidence that you are really interested in buying, it is common practice to enclose a sum of money to the proposal as a deposit or down payment (caparra confirmatoria, art. 1385 of Italian Civil Law) by means of a non-negotiable cheque in favour of the vendor.
The deposit, as a rule between 5 and 10% of the agreed selling price.
This cheque is usually kept by the real estate agent and will only then be handed over once the vendor has accepted and signed the proposal himself. From that moment on, the contract is legally binding. In case the buyer has second thoughts and wants to pull out, the vendor may keep the whole amount of the down payment by way of compensation. Vice versa, should the vendor want to pull out, he must pay double the down payment received to the buyer by way of compensation.
For the registration of a purchase proposal contract at the Tax Office (Agenzia delle Entrate) one needs to pay a fixed amount of € 200 per contract, € 200 for each suspensive and/or resolutive condition plus a revenue stamp of € 16 every 4 pages and each attachment (with the exception of floor plans and designs for which a revenue stamp of € 1 need to be paid). These costs are for the buyer and average between € 350 and € 550.
The contract needs to be registered within 20 days after signing at the Tax Office (Agenzia delle Entrate).
If it is a simple sale without any suspensive and/or resolutive conditions, it is possible to skip the next step, the drawing up of a preliminary contract, and to proceed directly with step 3, the notarial deed. The purchase proposal in that case will be considered as the preliminary contract.
2- THE PRELIMINARY CONTRACT:
The preliminary contract (compromesso of contratto preliminare) is a legal contract between the vendor and the buyer that binds both parties to proceed to the notarial deed (Rogito) by a predetermined date at given contractual conditions.
Elements which have to be included in the contract are:
*) personal details of both vendor and buyer,
*) a complete description of the property,
*) details of previous deeds,
*) the existence of mortgages or other entries on the property (e.g., rights of way),
*) details of released planning and building permits,
*) the agreed selling price,
*) terms of payment and possible suspensive and/or resolutive conditions.
At the signing of the preliminary contract have to be paid a sum of money, normally considered a confirmatory down payment (caparra confirmatoria), as a rule between 20 and 30% of the agreed selling price.
As in the previous step, here too goes that in case a party should have second thoughts and wants to pull out, he needs to compensate the other party by paying the whole amount of the down payment (inclusive the possible amount paid in step 1).
Therefore, should the buyer have second thoughts, he will lose the down payment(s) made and, vice versa, should the vendor want to pull out, he has to pay double the down payment(s) received to the buyer.
The counterpart has the faculty to ask the judge to force the withdrawing party to comply with the obligations stated in the contract, as an alternative to the economic compensation.
The preliminary contract needs to be registered within 20 days after signing at the Tax Office (Agenzia delle Entrate).
3- THE NOTARIAL DEED:
In spite of the legality of the preliminary contract, it is necessary to draw up a public title-deed (atto di compravendita) or notarial deed (rogito) to evidence the chain of uninterrupted ownership.
As this formal, written act also forms the basis for all tax computations, it needs necessarily be drawn up by a notary or other authorized public official at the presence of both parties or appointed proxies for them.
The notary will check if there are no mortgages or seizures encumbering the property, will verify all relevant information and checks the validity of all legally required licenses and permits. To do so, it is necessary for, mainly, the vendor to hand over some additional documents to the notary.
The property is usually sold as a whole (a corpo) and the agreed selling price, therefor, applies to the property in its entirety and is not based on a price per square or cubic metre of the real estate.
The vendor is liable for possible hidden defects (vizi occulti) and for third parties’ claims on the property (evizione).
The main obligation of the buyer consists in paying the agreed amount to the vendor at the time of the notarial deed, or at the moment of the actual ownership’s transfer if this is subsequent, usually by means of non-negotiable cheques (assegni bancari circolari non trasferibili).
For this purpose, you need to open a bank account by an Italian bank, a formality wherewith Real Estate Central Italy is more than happy to help you.
We “House For Sale Tuscany” have a special agreement with a notary in Arezzo to do this payment paid through his trust account. That is safe for the buyer and very easy. That means, the money can be transferred from the buyer’s bank account directly to the notary’s trust account.
The notary takes care of the registration of the title-deed at the Tax Office (Agenzia delle Entrate) and for the transcription in the Land Registry (Conservatoria dei Registri Immobiliari). About 2 or 3 weeks later you can get a certified copy of the titledeed at the notary’s office.
The information on this page is compiled with the greatest care; nevertheless, no rights may be derived from this information and optional attachments. We recommend that you check with the embassy in your country for the specifications and available information regarding your plans.