Once we had a verbal agreement to buy the property, I started to read about the purchase process. I found articles online written by fellow foreigners who had been through the process, real estate and advisory firms, and lawyers.
Not surprisingly, they all say to use a lawyer to manage the process. What’s surprising is that they’d even need to say it, but apparently, since a lawyer isn’t required by law, some people try to save a few bucks and do it themselves. (The “savings” here would be tiny. Attorney fees for a house purchase transaction are said to rarely exceed €4,000.)
Just for fun: here’s how a British site passes on their advice: “However, it is always important to engage the services of a solicitor at this point to ensure that your interests are well catered for throughout the entire process.”
Just in case: Let me loudly proclaim that I am not qualified to nor am trying to give legal advice. I’m writing this out just to provide context and background for our transaction.
In addition to the buyer, seller, and real estate agent(s), there are three other participants in the process.
- Avvocato: the lawyer. You hire.
- Geometra: like a supercharged surveyor. They examine not only the land itself, but perform other key activities. They are local and know the people and ins-and-outs of the system. You hire.
- Notaio: oversees the final contract signing, collects the taxes and fees, and registers the sale in the property register. Employed by the government, but receives an “honorarium” from you.
The “Typical” Home Purchase Process
(Before getting into any of this, you need a tax code, a codice fiscale. It’s sort of like a Social Security Number. Your avvocato can help.)
The purchase process has two, occasionally three, steps.
The step that seems to occur relatively infrequently, based on my reading, is a written offer/acceptance done quickly after a verbal agreement. It would contain contingencies for all the possible problems that might arise in the next step and would be accompanied by a deposit of some size, maybe 10%. Most of my sources recommend against doing this, unless there is a significant concern that the property might be sold to someone else before the preliminary agreement (step 2) can be completed.
It seems that this recommendation is driven by two aspects of the law in Italy, one codified and the other reality. The codified one is that once a written agreement is signed and a deposit is paid, the parties are bound to complete the transaction or face a significant financial penalty: the buyer would forfeit the entire deposit, while the seller would be required to pay twice the deposit back to the seller. Combine this with the reality that lawsuits in Italy typically take 5-7 years to resolve and it seems nearly everyone wants to wait until more facts are known about the property before signing anything.
The Written Agreement (Compromesso di Vendita)
Either directly from a verbal agreement or following the written offer/acceptance step comes the preliminary written agreement, called the compromesso. Here, the important pre-purchase due diligence takes place. The output is a written agreement accompanied by a deposit, which does then bind the parties as I described before.
This is a private agreement between the parties that doesn’t need to be officially submitted or registered with the government.
The compromesso covers, among other things:
- Identification of property in the national register of lands (NCT), citing register sheet and particular units of property and indicating them on a map
- Verification that the seller does have title to the property
- Identification of any potential limitations to purchase that might prevent getting full title, such as government obligations, liens, inheritance rights, and agricultural purchase rights*
- Identification of any easements for roads, trails, utility lines, etc.
- The agreed price and payment schedule. Usually, a down payment (caparra confirmatoria), typically 20-30%, is made. (This is the payment that binds the parties and activates the deposit forfeiture/double refund penalty.)
- The date for final sale. This must be at least 60 days after the compromesso is signed
Finally, sometimes this step is combined with the next one and the sale is handled all at once.
The Completion of Sale (Il Rogito Notarile)
This is a somewhat formal meeting of the parties to “close” the transaction. The notaio, who doesn’t just show up for this meeting but has been involved in the background work, presides. One key step is the reading of the contact aloud, of course in Italian.
Just what happens here when you are not a fluent Italian speaker is a little unclear. All sources agree that some type of services from an interpreter are required. Some say that if you have the contract translated into English by an approved interpreter, you can proceed and sign the documents yourself. Others say that an interpreter need be present and that you must give power of attorney to an Italian speaker, who then signs for you.
Either way, after the documents are signed and exchanged, the notaio collects the taxes and fees that are due. Following the meeting, the notaio officially registers the new owner in the land registry.
Armed with, or hamstrung by, all of this information, it’s time for me to tackle our contract head-on, in my first meeting with our avvocato, Giovanna.
* Just to add a complication when buying property in the country, old and complex Italian legislation entitles farmers, tenants and neighbors to be notified of a proposed sale and to have priority in buying agricultural land that is offered for sale in their immediate neighborhood.
Image source: www.pixabay.com License: CC0 Public domain. Free for commercial use. No attribution required.
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