The Italian and English legal systems are very different. Conveyancing, or title transfer, is strictly governed by Italian Law and may be performed only by a public notary (Notaio), who is a public officer and qualified professional. In Italy, you may only complete the purchase of a property in front of a Notaio.
Compromesso (Contratto preliminare) or The Preliminary Contract
Once you find a property in Italy that you are interested in, you setup a preliminary contract (compromesso). The compromesso is a significant commitment and involves paying the seller a deposit 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 is drawn with the agreement of both parties. It is a golden rule to get the advice of an Italian lawyer before signing the compromesso. It is critical that the buyer not to sign the compomesso unless he/she is in agreement with everything written in the contract. The buyer is in a position to impose conditions or restrictions on the vendor at this stage.
Consequences of the Signed Compromesso
The signing of the compromesso must take place in the presence of the notaio and involves both the seller and the buyer or their power of attorneys. At the time of signing, the buyer pays a deposit of between 10 and 30% of the sale price. If the buyer decides not to go through with the purchase after signing compromesso, he will lose the deposit paid and may be sued by the seller. If, however, the deal does not proceed because of the seller, the buyer has the right to demand compensation of up to twice the amount of the deposit paid. In this case, the buyer may also claim damages and have the sale compulsorily completed by a Court order (art. 2932 Italian civil code). If you need to claim damages (I hope not), please contact us.
Caparra Penitenziale or Withdrawable Down Payment
If either the buyer or the seller has any doubt regarding the final completion of the sale, it is possible to state in the compromesso that the deposit is a caparra penitenziale (withdrawable down payment). This will prevent any further legal proceedings or claims for damage. However, if the buyer breaking the contract, he or she will still have to lose the deposit to the seller. If the seller withdraws, he or she will still have to pay double the deposit amount to the buyer.
If both the buyer and seller want a quick sale and have no differences concernings conditions, price or anything else, it is possible to have the actual transfer of the property written into the compromesso.
Atto or Completion of the Sale
The atto is the act of completing the sale. The Notaio certifies both parties' identities, witnesses the transfer of title from the seller to the buyer 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, ensuring that everyone understands what is being bought and sold. With everyone in agreement, the notaio will ask each party to sign before he signs and adds his official stamp to the document. In either one of the parties is absent, the notaio will certify the signature of the procura speciale (power of attorney). At the moment of the completion, the buyer has to pay the remaining balance of the purchase price, plus taxes and notaio fees.
There are two different Official Land Registries in Italy: 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 seller to the buyer 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.
The Golden Rule
Check the seller's title before you start with the title transfer 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 will only find the exact id number of the land without finding the name the owner.
Make sure the Conservatoria does not contain any adverse entries at 3 stages:
- Before putting your offer and signing the compromesso
- After signing of the the compromesso
- Immediately after the atto
It is important to avoid the other pitfalls in buying property in Italy (neighbor farmer's pre-emption right, planning permission denial, regional environmental legislation, geological and sismic reports).