Introduction
Sorry if this next section is a
little boring, but then these things usually are, however it is always
worth knowing what is going on!
How it
works
In Italy, the first step
towards the purchase of property is the initial agreement between the
parties. Once the initial agreement is signed and executed, there
are some primary tasks that must be completed by the parties. For
example, the buyer must obtain appropriate and sufficient financing. The
seller must work to make certain that title to the property is free and
clear of any and all encumbrances so that it can be conveyed to the
buyer.
When this initial
agreement is signed, the buyer will post a deposit in the amount of at
least 10% of the total purchase price of the real estate being sold. It
is not uncommon in Italy for deposits to run as high as 50% of the
overall purchase price of the property. Deposits in Italy tend to be
higher than what is seen in many other countries around the world.
Generally speaking, the deposit is not refundable if the buyer simply
decides that he or she does not want to buy the property. Indeed, the
only real circumstances in which a buyer can obtain a refund of the
deposit -- even a hefty deposit of upwards to 50% of the purchase price
-- is when the seller backs out of the deal or in circumstances when
clear title to the real estate cannot be obtained within the time set
forth in the initial agreement between the parties.
The real estate purchase
process is overseen by a notary in Italy. The notary actually has more
duties than is normally associated with a notary involved in real estate
transactions in other countries the world over. For example, the notary
in Italy is responsible for carrying out title searches to make certain
that the title to the property is free and clear of any obvious defects
or liens.
Many real estate experts in Italy recommend that a purchaser take the
time to hire what is known as a geometra. The geometra will survey the
physical boundaries of the property for sale to make sure that it
actually does comport with what is listed on the legal description that
is subject to a contract for sale. (These experts maintain that this
particularly is important when it comes to older properties in Italy.)
The real estate purchasing
process can take upwards to six months to complete in Italy. For this
reason, unlike in many other countries around the world, it is a
commonplace occurrence for a purchaser to move into residential property
after the initial agreement is signed. In most countries around the
world, the purchaser does not take possession of the property until the
final agreement is executed and the deed to the property is transferred
from the seller to the buyer.
Solicitor / Lawyer
Wherever possible, try to enlist the services of a local Lawyer or
Solicitor to act on your behalf, preferably one who speaks English. They
will be responsible for drawing up your contracts, contacting the
Notary, paying any taxes and registering the property with the land
registry in Italy. They will normally charge between 1 - 2% of the sale
value of the property.
It's important to deal only with a qualified and licensed agent, and to
engage a local lawyer, before signing anything or paying a deposit. A
local surveyor may also be necessary, particularly if you're buying an
old property or a property with a large plot of land. Your lawyer or
surveyor will carry out the necessary searches regarding such matters as
ownership, debts and rights of way. Enquiries must be made to ensure
that the vendor has a registered title and that there are no debts
against the property like mortgages or taxes and check the property has
the relevant building licences, conforms to local planning conditions
and changes have been authorised. Check for selling consent of all
family registered owners and water supplies for countryside properties.
As you are
buying a home in Italy from afar, you may not manage to be physically
present during every transaction. Power of attorney or proxy may thus
play a part when you buy real estate in Italy. Granting power of
attorney means temporarily conferring your legal rights on a third
party; you (the grantor) are giving them (the attorney) proxy power to
sign any legal documents that would normally require your signature. As
such, it’s obviously important that you only grant attorney to a person
who is competent and who you can trust. A friend resident in Italy with
good Italian would be ideal. The phrase ‘attorney’ here should not be
confused with an attorney-at-law, by the way.
Now you and
your proxy will need to either attend the
notaio’s office
or go to an Italian consulate (so you could do this in the UK or US if
it’s more convenient) with your passports or other ID. Ideally you
should also have a codice fiscale (Italian tax code number). The
officials will draw up a proxy document. Your stand-in will need to list
their family name and first name, nationality, date of birth, address
and occupation; you’ll also carefully detail exactly what rights they
can exercise on your behalf.
UK buyers can
do this in front of a UK notary (most are based in the City of London),
with the documents rubber-stamped by the Foreign and Commonwealth
Office. There are pros and cons on either side. Dealing with an English
notary will certainly be easier for you initially (no travelling and no
language barrier) but it can also be ultimately more expensive, as the
Italian notaio then has to interpret and implement the UK power of
attorney.
The vendor may
also have a power of attorney. If so, your notaio needs to check that
the attorney really does have the authority to make the sale and pocket
the proceeds (there have been instances of villains pretending to be the
legal owners and selling Italian villas to two or more unfortunate
foreigners on the same day). Ensure the notaio checks their paperwork —
has it been correctly notarised? Is it up to date? What powers does it
actually confer?
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