The purchase process of a real estate property or of a ready firm is usually composed by three steps. Please note that this is in Italy a standard procedure whether you are buying apartments, houses, factories, hotels, villas…:

  • a written proposal;
  • the signature of the preliminary contract;
  • the signature of the property title deed;

The written proposal

Proposals are addressed in writing by the perspective buyer to the owner of the property in order to take it off the market for the time requested to check its legal status. The recipient has to accept the proposal within an adequate time limit.

Parties can agree that a small deposit has to be paid by the perspective buyer in order to reserve the unit.

The abovementioned deposit can be transferred:

  • straight to the seller;
  • to a third subject holding it until the due diligence on the property is completed.

It is essential for the buyer to agree with the vendor and mention in the sale contract that the deposit is refundable in case the sale stops due to the result of the various searches and surveys.

If the due diligence is fine, the deposit is treated as part payment on the final price of the property and will be deducted from the outstanding amount remaining to be paid.

The preliminary contract (“compromesso”)

The presence of the buyer during the signature of the Preliminary contract is not compulsory even tough it is highly recommended. If the buyer can not or do not want to be part of the signature, he will have to give a special authorisation in that sense to his a lawyer. The buyer should at this stage give him also authorisation to apply for the fiscal code, if it’s has not been done yet.

The preliminary contract (“compromesso”) is the agreement stipulating that both parties will complete the purchase of the real estate in a specified future date, in front of an Italian notary.

Under the Italian law, that document must contain all the essential terms and condition of the transaction. The identification details of both parties, an accurate description of the property, a reference to the price agreed and the means of payment to be used, the specification of the date of signature of the title deed.

If the buyer does not show a sufficient knowledge of the Italian language a translation of all the contract and annexes will have to be provided to him before the signature of any document. Such translation will have to be made by a sworn interpreter. The costs of these translation must be paid by the buyer unless express agreement of the vendor to cover these expenses.

At the time of the execution of the “compromesso”, a deposit is usually transferred by the purchaser to the seller to strengthen the contractual relationship. The classification of this deposit is strictly linked to its function. This is advisable that the buyers transfers this deposit to the escrow account of his lawyer as a proof that the payment was released. The lawyer will then only release the deposit to the vendor once the preliminary contract will be countersigned by the vendor. This procedure is usually not the standard one, but can easily be imposed to the vendor.

  • in case the amount is transferred as “caparra confimatoria”, (art. 1385 of the Italian Civil Code) the buyer loses it in case of his/her default on the agreed terms of the contract. Conversely, in the event of seller’s default, the seller will be legally bound to refund double the sum received.
  • if the deposit is defined as “caparra penitenziale” (art. 1386 of the Italian Civil Code), it will enable both parties to withdrawn form the contract enabling the seller to keep the deposit in case of buyer’s withdrawal, or compelling the seller to return double the deposit received, in case is the seller the party terminating the contract.

Parties can agree to treat the deposit as part payment on the final price of the property in case the contract is not terminated as mentioned here above.

All the specific conditions that the buyer would like the vendor to realize as a condition of the transfer of ownership either legal such as (lifting of mortgage – abandon of a right of way – resolving a pending litigation with a third party) or others such as (realisation of certain works in the premises or common areas…) must be stated in the preliminary contract. Any verbal agreement even in front of witness will be considered as non compulsory for the vendor.

In keeping with the regulations currently in force (art. 1453 and 2932 of the Italian Civil Code) the signature of a preliminary contract, being a formalisation of the commitment to complete the deal, has special consequences in case one of the party refuses to execute the property title deed. In fact, the other party has the faculty:

  • to terminate the contract and ask for compensation;
  • to go in front of a Court asking for a ruling that transfers the ownership of the property from the seller to the buyer in place of the public title deed.

Preliminary contracts are generally subject to registration in the local Tax Office, being necessary to pay the tax related to the transaction. Usually this tax is amounting to 0.5 % of the initial payment made by the buyer (within 25 to 35 % of the purchase price).

As stated by the art. 2645 bis of the Italian Civil Code, The “compromesso” can be also registered (“trascrizione”) in the Italian Agency of the Territory (“Agenzia del Territorio”) in order to protect the buyer against the seller and eventual adverse rights of third parties. In this case the contract must be executed in front of an Italian notary.

As a consequence of the trascrizione, if the seller promises to transfer the property to a subject other than the perspective buyer who signed the compromesso, the latter has a good right to complete the purchase against that third party.

The effect of the registration of the preliminary contract in the Agency of the Territory expires if the public title deed is not signed:

  • within one year from the date fixed by the parties;
  • in any case, within three year from the registration of the preliminary contract;

The property title deed (“rogito”)

The presence of the buyer during the signature of the title deed is not compulsory even tough it is highly recommended. If the buyer can not or do not want to be part of the signature, he will have to appoint a lawyer to represent him as his authorised agent.

In order to do so, a power of attorney, will be drafted and send to the buyer. This power of attorney will have to contain all the summarise points of the title deed, both in Italian and Russian, made by a sworn interpreter. This power of attorney will have to be legalise in the Italian consulate or Italian Embassy in Russia. The cost of such procedure should be around 500 to 600 Euros.

The property title deed (“rogito”) is drafted by the notary on the basis of the preliminary contract.

Its execution by the parties takes place in the notary’s office, the notary having to personally read the deed and explain its content and legal mean.

Once the rogito is signed, the property or firm has irrevocably changed hands. If the transfer involves real estates, the transfer of the ownership is notified by the notary itself to the public authorities and a copy of the deed is filed in the Agency of the Territory.

To register the title deed in the land and eventually mortgage registry the buyer will have to pay some stamp duties, registration and eventually mortgage fee along with the notary fees.

These compulsory closing costs will be based on the price of the property accordance a percentage. Usually they will be around 2 to 4 % of the purchase price. They must be paid in once without the use of any mortgage and before the signature of the title deed and transfer of ownership.