Hiring a solicitor to do the ‘conveyancing’ (everything that needs to happen to make the property officially yours) is an extremely important part of buying property.
Please remember that the conveyancing process exists to protect you. It helps ensure you’re getting everything you expected from the deal – and nothing you didn’t.
Some examples of this regarding the Italian context could be:
- arriving to find the kitchen has been completely removed when you wanted to keep it.
- a property with a swimming pool that was built without planning permission.
- local regulations which forbid you from changing the window frames.
- land with public rights of way over your property.
- a wall which has been moved without planning permission and contrary to current safety regulations.
We want to help you to avoid these becoming your responsibility. In addition to this, we often reveal minor issues that can also help with negotiation of the purchase price.
- 1 Property conveyancing in Italy: differences, costs, timings
- 2 Property Due Diligence Investigation: Technical and legal inspection for Italian real estate transactions
- 3 What is due diligence in real estate?
- 4 Legal due diligence
- 5 Technical due diligence
- 6 The role of the attorney or solicitor in your purchase
- 7 Find out why it’s important to hire a lawyer to do due diligence
- 8 Illegal Real Estate Transactions and How to Avoid Them
- 9 Company due diligence: acquiring a property in a business transaction
Property conveyancing in Italy: differences, costs, timings
To help you understand what is involved, here’s a closer look at conveyancing, and why the process is so important. Conveyancing is a number of legal and administrative steps needed to transfer a property from one person to another, which typically includes items such as: Legal searches, Property legal searches, Owner history, Legal rights over the property and land, Rights of way and property access laws.
Italy, like the US and the UK, does not legally require you to have a lawyer (also known as attorney/solicitor/conveyancer) to purchase a property. However, as you have likely found with your home country, in almost 100% of property purchases a lawyer is used to do the legal and technical checks of a property. This becomes even more important in Italy where the law can be incredibly complex and a missed check can mean you become liable for a financial penalty or worse, legally responsible for something more serious.
Having legal help is also something that can guarantee you about the timings of the buying process.
The process of purchasing a house in Italy is quite different from other countries: here this is a time-consuming endeavor. So, how long does it take?
The average timings when you ask for a mortgage are between 6-7 months and 8-10 months. If you already have the money, then you can finalize the purchase in 3-5 months, depending on whether there are irregularities to be remedied.
Here you can have a look at the following table, that outlines all the necessary steps involved and the average duration of each step. Then you have to consider that each purchase is unique, and various factors can significantly affect the timeline of the process. For example, obtaining a mortgage or buying a house at a judicial auction can add complexities and additional time to the process.
Then it’s important to consider various factors, such as the complexity of the purchase, the availability of the parties involved, and the workload of the notary, which can also impact the timeline significantly.
|Real Estate Agreement (via notary) – Compromesso
|Real Estate Agreement (via authenticated private deed) – Compromesso
|Purchase Proposal – Preliminare
|Mortgage Request – Richiesta Mutuo
|Final Deed – Rogito
|Purchase with mortgage request
|about 3 months
|Purchase with mortgage and seller who needs to move
|about 8-9 months
|Purchase without mortgage and free seller
What about the costs? The money you can spend vary according to:
- The cadastral value is a property’s assessed value and impacts the taxes and fees associated with buying property in Italy. The cadastral value is obtained by multiplying the cadastral annuity (indicated in the view) revalued by 5% by a certain coefficient established by law and varying according to the cadastral category of the same property.
- The real estate Agreement and Proposal are not mandatory. But they can prevent you from criticalities and problems regarding your purchase and what you want to do with that property.
- Notary costs are necessary only for the deed and should be factored into the overall cost. Notary fees in Italy vary depending on the property’s value and location.
- Main residences and second homes in Italy have different costs for the deed.
Remember: property purchases in Italy are possible for both residents and non-residents. With the help of a good lawyer a foreign resident should spend exactly the same amount of an Italian resident.
Property Due Diligence Investigation: Technical and legal inspection for Italian real estate transactions
Here at our firm, we are specialized in delivering an exceptional service regarding real estate affairs across Europe and Italy. On this page we are going to focus our attention on some specific aspects of the real estate law in Italy.
When it comes to purchasing or selling real estate property in Italy, the process can often be complex and daunting. A real estate transaction attorney plays a crucial role in ensuring that the transaction is legally sound and that the interests of the involved parties are protected. In this article, we will explore the role of a real estate lawyer (otherwise known as a real estate attorney), the importance of due diligence, and the differences between legal and technical due diligence when purchasing a property.
After reading, you’ll be able to answer questions including:
- What is due diligence?
- What are some common issues that can arise during a real estate transaction in Italy?
- Can an Italian real estate law firm help me in the process of verifying a property’s title and ownership?
- How can a real estate transaction attorney help with financing a mortgage and tax issues?
What is due diligence in real estate?
Due Diligence in real estate investment are the checks you make to do a good investigation. Those checks are conducted before the deal. You could describe it as a buyer’s “homework” before deciding on the purchase, where a detailed inspection allows the buyer to ensure that the property is in the condition they expect and that the transaction is legal.
Conducting due diligence when buying a property: what you need to know
Before purchasing a real estate property, its legal status, history, functional and technical characteristics must be known. Completing an exhaustive expert analysis both provides the buyer with a guarantee as to the status of the property and provides an opportunity for the seller to present their property in a trustworthy manner. The analysis should be carried out in coordination with real estate lawyers who research the property’s legal status, and surveyors or engineers who study the technical characteristics of the property.
What is a due diligence report?
A due diligence report is composed of several parts providing a comprehensive understanding of the property and its features. This includes its location and accessibility, characteristics of the surrounding area, description of the estate including total area and disposition of the spaces, and a history of the property and its building. The introduction aims to familiarize the potential buyer with the property’s main characteristics and any documents related to it. The core of the report provides a thoroughly examined legal and technical analysis of the property to establish a comprehensive understanding of the property’s status. The report may also summarize any additional steps needed and the resources needed to complete these steps. Finally, recommendations and advice may be provided based on the findings.
The property due diligence is not always an obligatory document for closing the deal. In some of Italy’s regions, however, the associations of notaries have reached agreements to require a legal and technical due diligence to be presented upon signing of the final deed. In these regions a due diligence report is mandatory for the transfer of property and for finalizing the deal in front of a notary. The document may also be required by banks when applying for a mortgage or when using the property to guarantee a loan.
Real estate due diligence activities
- Legal: deed of provenance, cadastral (Italian Land Register) views, voluntary and judicial mortgages, leases.
- Technical and design: correspondence of the state of the premises to the Urban deposited plan, consistency of the quality and condition of the building, evaluation of the costs and time needed to adapt the property (repairs, renovations, change of use or redevelopment). This analysis includes environmental aspects, the plant engineering and the structure of the property.
- Economic: evaluation of the property with regard to its current and potential use, with respect to the area where it is located and the trend of the target market (residential, office, commercial or industrial).
The purpose of this thorough research is to conduct a comprehensive analysis and assess the value of a property based on data and information delivered through a precise theoretical-practical procedure. In fact, the Real Estate Due Diligence is carried out during purchases and sales, is used by institutional investors and precedes the purchase phase of a property. It is a real data collection that serves precisely to know in detail the history of the property, so as to be perfectly informed about the property you intend to buy and therefore its value.
Due diligence: how it is prepared and how it works
The Real Estate Due Diligence evaluation, being the set of data collected from several different sources, is drafted by preparing several parallel evaluations, that is, dividing them according to the type of information that needs to be acquired. Together they will provide a clear and complete evaluation of the real estate and property condition of a building.
In this way, we will have multiple complementary parts namely:
1/ Urban Plan Due Diligence
Which through viewings, cadastral plans and graphic representations, is carried out to check the cadastral regularity of properties taking into account such elements as:
- the correct inclusion of the building on the map
- the correspondence between the floor plan and the actual building
- the correspondence of the data shown in the view
- other basic information (address, floor number, interior, etc.)
2/ Administrative Due Diligence
This is an assessment of the ownership of the property aimed at checking for irregularities in the contracts of use and enjoyment.
Administrative Due Diligence paperwork is conducted in the following offices:
- Registrar of Deeds, for the issuance of title deeds
- Land and Building Cadastre, for verification of regular census
- Registry Office, to verify the existence or regularity of contracts
3/ Structural Due Diligence
Structural Due Diligence is carried out by comparing safety-related documentation with the visual inspection carried out on site, with the aim of verifying what the condition of the property is in terms of:
- Static capacity
- Degree of safety
4/ Building Due Diligence
It consists of an analysis of the zoning certificate aimed at verifying the conformity of the buildings according to current regulations. The building due diligence refers to urban planning and construction laws, ascertaining that:
- there are no territorial constraints
- there is a proper use of the property
- any building interventions carried out over time have been performed in compliance with the regulations.
5. Safety Due Diligence
This is a verification of the regularity of the documents inherent in the implementation of safety standards in the building, carried out through the inspection of:
- Fire prevention certificate
- Emergency plans
- Anti-seismic conditions
- Also at this stage, inspections will be carried out to verify the correspondence between these certificates and their actual implementation.
6. Environmental Due Diligence
This is the Due Diligence phase in which the conditions of the environment surrounding (as well as inside) the property are checked for sources of pollution or other potentially hazardous materials.
Legal due diligence
The purpose of the legal due diligence is to ascertain if the unit complies with all regulations and is available for sale with or without any burdens. Research is done on the ownership title and the property and title transfer history. The purpose is to determine the seller’s right to sell the property and any complications that might arise. A comprehensive research of all related documents is performed. Burdens and complications may result if a creditor issues a claim, if mortgages exist on the property, or if the property has been used as collateral. In addition, there may be third-party rights to the property (easements) including the right of passage, the right of parking, the right of a view, or an easement by law. Easements do not endanger the ownership title on the property, but do affect the owner’s exclusive use of it. A research of the registries and documents concerned will be completed in order to establish if there are any rights to it.
Further legal advice can be provided as to the taxation scheme applicable for the deal. The due tax may vary depending on various factors. This part of the report is to be completed by competent real estate attorneys and tax lawyers.
Technical due diligence
The technical part of the report aims to establish the unit’s characteristics and status and provides the potential buyer with an evaluation as to any steps that might need to be completed to guarantee full functionality of the unit. An expert surveyor/architect/engineer visits the site and studies the respective documentation to establish the state, maintenance, urban planning, and land registry status of the building. A report on the building’s installations and the unit’s planning status is included. An energy performance certificate and a certificate of habitability are included, both of which are mandatory documents in the case of sale and purchase of property. In addition, any building restrictions will be inspected and a verification on the data provided from the Land registry shall be completed.
Legal vs. Technical Due Diligence: What’s the Difference?
When purchasing real estate, both legal and technical due diligence are essential. While they share the goal of uncovering potential risks and issues, they focus on different aspects of a property.
Legal Due Diligence involves:
- Verifying the property’s title and ownership
- Ensuring compliance with zoning and land-use regulations
- Identifying any outstanding liens or encumbrances
- Reviewing contracts and agreements
Technical Due Diligence involves:
- Assessing the physical condition of the property
- Identifying any structural, mechanical, or environmental issues
- Evaluating the property’s potential for future development or renovation
Who is in charge of conducting the legal Real Estate Due Diligence Checklist?
In Italy, the tradition of a real estate transaction coordinator is slightly different from what is seen in other countries. The coordinator, often a notary, is responsible for overseeing the entire transaction and ensuring all legal requirements are met. This includes the preparation and signing of the final deed (sometimes called completion) known as the rogito.
The role of the attorney or solicitor in your purchase
The role of a real estate transaction lawyer in Italy is to guide clients through the complex legal process of buying and selling property. Their responsibilities include:
- Reviewing and drafting contracts
- Conducting due diligence
- Ensuring compliance with local and national regulations
- Advising on financing and tax issues
- Representing clients in negotiations and disputes
There are several reasons why hiring a real estate transaction attorney is important:
- They ensure the legal paperwork is correct. The attorney reviews and prepares all the required documentation like the sales contract, title paperwork, and deeds to ensure everything is legally valid and binding. Any mistakes in the paperwork can lead to legal issues down the road.
- They handle the financial aspects. The attorney oversees the exchange of funds between the buyer and seller and ensures all taxes, fees, and liens on the property are paid and cleared.
- They represent your legal interests. Real estate attorneys work on behalf of the buyer or seller to review the details of the transaction and identify any potential issues. They propose solutions and negotiate terms to protect their client’s interests.
Why You Need an Italian Attorney for Your Real Estate Transaction
When a foreign citizen wants to buy a property in Italy remotely, he will need to hire an Italian lawyer. Additionally, having an Italian attorney even when buying in person, is crucial from the initial sales contract drafting through to the final closing to have a real estate lawyer by your side. Their responsibilities will include:
- Reviewing and preparing the preliminary sales contracts (preliminare, compromesso) which binds the buyer to purchasing the property.
- Conducting legal and technical due diligence on the property. This includes researching the property’s zoning regulations, building permits, certificates of occupancy, easements, etc.
- Negotiating the final terms of the deed of sale (il rogito notarile) and preparing the final sales contract.
- Organizing the signing of the final contract in front of a public notary (il notaio), Who officiates the process and formally transfers the legal title from seller to buyer.
- Registering the deed of sale and new title in the Land Registry to finalize the sale.
- Providing legal advice and guidance to their clients throughout the transaction.
Find out why it’s important to hire a lawyer to do due diligence
Doing your due diligence is important. Not only because real estate transactions involve large amounts of money, but also to help you avoid unpleasant surprises regarding building permits, limitations regarding changes in the destinazione d’uso, mortgage requirements… everything about your future plans!
Illegal Real Estate Transactions and How to Avoid Them
Illegal real estate transactions can take many forms, including:
- Fraudulent conveyance or misrepresentation of property ownership
- Failure to disclose material defects or issues
- Non-compliance with zoning, land-use, or building regulations
- Unlawful eviction or dispossession
Contact ILF attorneys now and start considering your investment in the safest way
Here is a list of the due diligence best practices to avoid major risks when buying a property:
|Utility System Compliance
|Certificate of occupancy
|Original Purchase Deeds Inspection (up to 20 ys)
|Verification of any structural discrepancies between the plan deposited and the real property status.
|The utility system must comply with current laws, unless pre-1967 installations
|The property must have the Certificate of Habitability, the requirements for being used as a residence
|In the case of property derived from inheritance or donation, check for the absence of third-party rights.
|If the seller is a society – Company Due diligence
|Verification of structural requirements to the activity to be operated in the premises to be acquired.
|Facilities in compliance with legal sanitary standards.
|Verification of the necessary licenses aimed at carrying out the business
|In the case of rural properties, check the absence of right of first refusal intended for professional farmers.
Company due diligence: acquiring a property in a business transaction
A company due diligence is part of the legal due diligence given a purchase of property owned by a company or other legal entity. The legal due diligence intends to establish the ownership titles, burdens and third party rights over a property subject to a sale, and purchase agreement. A technical due diligence, explained below, is usually done as well. The two documents give the potential buyer an extensive understanding of the real estate unit and its status and features. It is drawn up by the joint work of lawyers, accountants, engineers and surveyors.
A company due diligence for the purchase of a real estate property enables the buyer to avoid any potential future revocation actions by better realizing the financial status quo of the seller company. A creditor claim of company assets, including the company real estate, can hinder the sale of the property. Completing a company due diligence on a company owned property is a vital step for closing a successful purchase deal.
The content of a company due diligence generally includes basic information about the company and involves an analysis of the company’s solvency, shareholders’ rights, assets and liabilities, and recent balance sheets and income statements. These investigations are used primarily to determine the company’s ownership and ascertain whether there are any parties that might have rights over the given property. All the information obtained needs to be carefully analyzed and presented within the due diligence report so that the interested party can analyze the financial capacity of the company and choose whether to enter into any contractual agreements with it.
What we do here at Italy Law Firms
- attentive inspection of all publicly disclosed documents of the company assets;
- report, advise, and translate all documents;
- complete an exhaustive survey of the seller’s rights and solvency;
- comprehensive research on the property’s status;
- on-site visits of the property and research and review its plans;
- full summarization of our findings in a company due diligence report.
Our expert team of real estate agents, lawyers, accountants, architects, and surveyors leads foreign investors smoothly through the entire process of purchasing a property in Italy.
Specifically we assist foreign investors by:
- providing due inspection of all preliminary documents and informing clients on the content, providing translations when necessary. Documents include land register plans, energy rating certificates, and certificates of habitability;
- completing a survey of the seller’s rights and solvency in the case of a property owned by a legal entity;
- ascertaining property rights and burdens on the property;
- carrying out on-site visits, studying the property and its plans;
- evaluating the property;
- offering an itemized summary of our findings in a technical and due diligence report.
The contents of this page should not be taken as an authoritative statement of Italian law and practice. Neither the author nor the publisher are responsible for the results of actions taken on the basis of information contained in this summary, nor for any errors or omissions. This text is not intended to render legal, accounting or tax advice. Readers are encouraged to seek professional advice concerning specific matters before making any decision.