Judicial real estate auction in Italy: government property auction

Property auctions in Italy

A real estate property is put up for auction when the owner falls into default on a loan and the bank or creditor forecloses on the property. The creditor can ask a judge to demand payment from the debtor. If the debtor is unable to pay the debt, the decree becomes enforceable and the creditor can use the property to satisfy their claim and put the property up for judicial auction. To guarantee the creditor’s interests, it is required that the auction comply with the principle of publicity and is offered to an unlimited number of people. Therefore, the offer is included on the Ministry of Justice’s website to fulfill this requirement.

Judicial real estate auction in Italy: Vendita con incanto and Vendita senza incanto

Italian law provides for two types of auctions: Vendita con incanto and Vendita senza incanto. 

Vendita senza incanto is a type of auction where participants make a bid in a confidentially sealed envelope. The bid must meet the reserve price and be made within a specific time frame. The envelopes are opened by the competent authorities pursuant to a specific procedure. If there are no offers that meet the requirements or if it is impossible to carry out this type of auction, then a public open auction (vendita con incanto) is held. In this type of auction, there is no minimum price and the property is sold to the highest bidder made on the specified auction date. The deal is provisional as bids can be accepted 10 days following the public auction. If a bid is made at least one-fifth higher than the winning bid, the auction is reopened exclusively to the participants of the previous auction.

The Italian Code of Civil Procedure states that everyone except the debtor can bid at the auction. The bidder typically is required to make a deposit equal to 10 % of the minimum auction price, the price at which the bidding will start. 

An offer is made by completing an application found on the respective court’s official website and submitting it in a sealed envelope. This offer can be made by the buyer or through a competent power of attorney. The envelopes are opened in the presence of the bidders at the specified auction time. The ‘successful bidder’ is the person offering the highest bid. The buyer typically has 120 days from the auction date to pay the full purchase price. If the balance is not paid within the specified time frame, the property goes back on the auction list and the “successful bidder” loses their deposit. All other bidders are refunded their deposits on the day of the auction.

Once the balance is paid in full, the judge signs an enforceable decree of transfer and the ownership of the property is immediately transferred. Any problems occurring after the transfer of ownership, such as an appeal by the previous owner or adverse possession of the property, is the bidder’s responsibility to execute any legal actions at their own expense. 

House auction in Italy: advantages and risks

There are many advantages to purchasing real estate in Italy through judicial auctions. All property transcriptions and registration costs are waived. Properties sold at auction normally sell below the market value. In addition, according to the principles of publicity and transparency, all real estate auctions in Italy are to be available on the Internet.

• The website of the Ministry of Justice is a user-friendly site containing an updated list of all properties on judicial auction. The site lists information such as property information, minimum bid price, and a .pdf file “Avviso” with information regarding the auction date, time, and place.
• The official page of the National Association of Judicial Auctions offers more detailed information about the properties on judicial auction with useful search engine filters (type and purpose of property, minimum and maximum price, location) and procedural data. It is not, however, in English and therefore less user-friendly to non-Italian speakers. 
• Local Italian court websites also have a section called Aste, meaning auctions. The search engine then redirects you to the website of the Ministry of Justice. 

Included in the information on the website is the name and contact of the professional delegated by the court (lawyer, notary, or accountant) who provides the necessary property and auction information. The contact of the appointed custodian who arranges property visits free of charge is also included. The names of the professionals are shown in the notice of sale. 

OUR SERVICES

We are a multidisciplinary team offering a full spectrum of services to prospective foreign investors who are interested in participating in the Italian judicial real estate auctions. Our legal department is composed of lawyers fluent in English and experienced in real estate law, with extensive knowledge of standing legislation and rules. Our internal real estate department consists of multilingual and licenced real estate agents and a real estate management team with a vast network of contacts and a native’s take on the real estate market and the red tape involved in purchasing a property. Our professional accountants, surveyors, and architects are available to assist in your real estate purchase.

Our team of experts will: 

• assist you in familiarization with the local real estate market and the procedures for purchasing a property by means of a judicial auction;
• inspect all preliminary documents on a listed property and provide advice pertaining to it;
• summarize our findings in a technical and due diligence report;
• discuss strategies for successful bidding;
• provide representation for offer submission and complete the administrative steps related to it;
• represent you and take the respective legal actions in the case of any burdens on the property.