Legal pills: the real estate sale in Italy

Legal pills: the real estate sale in Italy

Legal pills: the real estate sale in Italy

Summary
1. What are the fundamental elements of the sale?
2. What is the difference between selling at fixed price and based on area?
3. What should be the form of the sale deed?
4. Is it worth signing a preliminary contract?
4.1. What happens if the other party then refuses to enter into the final contract?
4.2. The form of the preliminary contract

 

1. What are the fundamental elements of the sale?

The sale is a type of contract provided for by the Italian civil code in articles 1470 and following.
In particular, article 1470 of the Italian Civil Code provides that the sale is the contract which has as its object the transfer of ownership of a movable (such as a mobile phone) or immovable property (such as an apartment) or of another right in exchange for the payment of the relative price.
In the sale, there are therefore two parties: the seller and the buyer and the payment of a sum of money is always necessary in exchange for the transfer of the asset. If an object is therefore transferred for free (for example as a gift), the transaction cannot therefore be referred to as a sale.
When does one become the owner of the property? According to art. 1376 of the Italian Civil Code, the ownership of the sale’s object is transferred as a result of the sole consent. Therefore, for the sale to be effective, the agreement between the parties is sufficient, whilst the delivery of the goods is not necessary, and it can also take place at a later time.

2. What is the difference between selling at fixed price and based on area?

Real estate can be sold on a fixed price basis (art. 1538 of the Italian Civil Code) or based on area (1537 of the Italian Civil Code).
In the first case (fixed price sale), a certain economic value is attributed to an asset (for example a house) as a whole and that will be the price that will be paid by the buyer to the seller.
In the sale based on area, on the other hand, the value is established for a certain unit of measurement (for example € 3,000 / m2) and multiplied by the surface of the property: in this case, a 100 m2 apartment will then be sold for 300,000 euro.

3. What should be the form of the sale deed?

According to art. 1350, no. 1 of the Italian Civil Code, the sale of real estate must be done in writing. Furthermore, art. 2643, no. 1 of the Italian Civil Code establishes that the sale contract must in this case be registered.
In a nutshell, registration is a process of public notification that is carried out through the annotation of certain types of deeds (including sales contracts) concerning certain categories of assets (including real estate) in special registers and serves to notify to the third parties the legal events concerning that property.
In order to be registered, the contract must have, pursuant to art. 2657 of the Italian Civil Code, the form of public deed or private deed with authenticated private signature. In practice, it is almost always preferred to adopt the form of a public deed, that is a document drawn up with particular formalities required by law by a notary (or by another public official authorized to do so). When buying and selling real estate, it is therefore necessary to contact a notary.
The notary also carries out an important task of checking the content of the contract so that the sale takes place in compliance with the law and the rights of both parties are protected.
Is it necessary to be personally present at the conclusion of the sale? No, it is also possible that the seller or the buyer (or both) issue a power of attorney, authenticated by a notary, which gives another person the power to represent him before the notary. However, the signing of the power of attorney must be authenticated.
Therefore, for example, an elderly parent who lives in a retirement home can give the power of attorney to the child to sell the property he owns or a German citizen living in Germany can give the power of attorney to a trusted person in Italy to sign on his behalf the purchase agreement with which he/she buys the new holiday home.

4. Is it worth signing a preliminary contract?

The preliminary contract (“contratto preliminare“) is a contract by means of which the parties undertake to enter into a subsequent contract (called “final”), the essential elements of which have already been established.
The preliminary contract of sale therefore serves to commit both parties to stipulate the sale of an asset which they therefore already agree to do, but which for various reasons cannot yet conclude.
For example, the buyer, who has identified the house he wants to buy and who has agreed on the price with the seller, may have an interest in concluding a preliminary contract, if he must obtain the loan from his bank, but does not want to risk that while waiting for a response from the bank someone else buys that house or the seller changes his mind.
In most cases, making a preliminary contract is therefore an appropriate choice.
Importantly, the content of the preliminary contract must comply with certain essential requirements and it is therefore preferable to contact a professional for support in its drafting.

4.1. What happens if the other party then refuses to enter into the final contract?

One of the advantages of the preliminary contract is given by the provision of art. 2932 of the Italian Civil Code. This article provides that the interested party can ask the judge to issue a sentence that produces the same effects as the definitive contract that the other party no longer wanted to conclude. In this way, a judicial decision is obtained that substantially replaces the definitive contract and thus allows the sale to be concluded.
In any case, it is also possible to request compensation for damages resulting from the non-fulfillment of the other party.

4.2. The form of the preliminary contract

What form must the preliminary contract take? The same as the final contract, and therefore in the case of the purchase and sale of real estate the contract must be concluded in writing.
Is it necessary to register the preliminary sales contract? It is not mandatory, but in the absence of registration the preliminary contract only has effects between the parties.
This means that, in the event that, between its signing and the conclusion and registration of the final contract, the seller transfers the property to another person or the same is the subject of other acts or facts (such as foreclosures or seizures) to the detriment of interests of the future buyer, the latter could only, possibly, take action against the seller for damages. In this case, however, the buyer cannot claim any rights against third parties who, for example, have purchased the property.
The registration of the preliminary contract, on the other hand, gives rise to the so-called “pre-emptive effect”, that is, it allows the effects of the future registration of the final contract to be retroactive to the moment in which the preliminary transcription took place. In this way, any prejudicial transcriptions or registrations that take place after the registration of the preliminary contract are “neutralized”.
But beware: the “pre-emptive effect” is only valid for a certain period of time. In fact, article 2645 bis of the Italian Civil Code provides that the effects of the preliminary transcription cease and are considered as never produced if, within one year from the date agreed between the parties for the conclusion of the definitive contract, and in any case within three years of the aforementioned transcription, the transcription of the definitive contract is not carried out.
In order to be transcribed, the preliminary contract must have the form of a private agreement with authenticated signature or a public deed.

 

 

BIBLIOGRAPHY:
Balloriani M./De Rosa R./Mezzanotte S., Manuale breve Diritto civile, XIV ed., Giuffrè, 2019, Milano.
Torrente A./Schlesinger P., Manuale di diritto privato, XXI ed., Giuffrè, 2013, Milano

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