Regardless of the fluctuations in markets across Europe in past years, recent data indicate an increase in investments in the Italian real estate market by foreign investors. Italy has a powerful charm that lures people from all over the world. The unique Mediterranean climate, the history and its rich art and culture, not to mention the Italian cuisine and excellent wine , Make Italy an excellent choice for vacation or retirement.
In recent years, real estate prices have been affected mainly by the economic crisis in Italy. Property prices experienced a decrease of 20% to 30% between the years 2011 to 2017. Despite the positive trend in properties prices that were noticed in 2016, price levels remain low compared to the year 2011.
The first step to consider when buying any property in Italy, is to hire the services of an attorney, to ensure that the interests of the buyer are well represented. The process of real estate transactions is a regulated process in Italy, however, the real estate lawyer will ensure that the transaction will not be biased against the buyer and will simplify the bureaucracy in many cases.
There are three main stages when purchasing a property in Italy
in cases where property is being purchased through s real estate agency, as opposed to direct purchase from the owner of the property (private sale), the buyer is normally asked to sign a written proposal to purchase the property. At this point, the buyer will also be required to pay a small deposit, usually held by a real estate agent or a lawyer until his/her purchase proposal is officially accepted (signed) by the seller. Once the proposal was accepted by the seller, the document becomes legally binding and in many cases the real estate agency will ask for their brokerage fees immediately after the seller accepts the proposal. In view of this situation, it is very important to consult with an attorney before signing the proposal or any other written document.
even-tough real estate agencies and property owners prefer to leave out this phase, and although this step is similar to the one described in the previous paragraph, the pre-contractual commitment is an essential part of the purchase process. This legal document contains all the relevant terms and details of the real estate transaction. It is important to use the services of an attorney in order to draft a this document correctly and ensure that the interests of the buyer are guaranteed. Furthermore, the Italian lawyer will also examine the document thoroughly (if drafted by the the seller), explain it to the buyer and advise accordingly. One of the main elements of the pre-contractual obligation is the payment of a deposit (Caparra confirmatoria). This deposit will not be refunded if the pre-contractual obligation is canceled by the buyer without a valid legal reason. On the other hand, the seller will return the a double amount of the deposit if he decides to cancel his obligation without a valid legal reason. The document will also outline the official date that was agreed by both parties to sign the bill of sale in front of a public notary.
The public notary (Notaio) is a government official with the authority (in accordance with Italian law) to performs due diligence regarding the property and guarantee the integrity of the transaction. The public notary is also responsible to ensure that all registration fees and property taxes on the property were paid properly. Although the notary is being chosen by the buyer, he acts as a purely neutral and objective party and can not replace an attorney who is representing exclusively the interests of the buyer. Therefore, it is important to consult with an attorney so that he/she can ensure in time that no "unpleasant surprises will suddenly emerge."
The bill of sale is drawn up by the public notary and must contain all the terms and details that were included in the pre-contractual stage. The Italian law states that the bill of sale must be written in Italian, so that even if there is a translated version to another language, the Italian version will be used for legal purposes. At the same time, the notary will read out loud in the presence of all parties the content of document and explain the details to all parties or their legal representatives. At this point all parties will be able to review and verify all the relevant details. The Attorney, representing the buyer, will raise questions or objections that he/she may have and get an immediate response before signing the bill of sale. Also,if the buyer can not be present during the signing of the bill of sale, his attorney will be able by to sign it on behalf of the buyer.
Once the contract is signed by all the parties, the buyer will be asked to pay the outstanding amount of the payment for the property, and obtain the keys to the property from the seller. The the registration of the bill of sale in the relevant government offices takes approximately one month, at the end of which the owner of the new property will receive an official copy. In the event that the new owner of the property is not in Italy, his/her attorney will collect the bill of sale and arrange to transfer it to the client.
If you would like to learn more about how our firm can be of assistance representing you, or your business, please contact us or call our office at +39 035 199 65615
By Lucrezia Caroli - Caroli & Di Bitonto Law Firm - 8/8/2017