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PURCHASE HOUSE IN ITALY: THE FINAL CONTRACT OF SALE

Purchase contract in Italy

Generally, the purchase is a contract that links the transfer of an ownership of goods or rights in return for a certain fixed price; more generally we can say that the real estate market is the formal agreement by which a party, the seller, transfers to another, the buyer, the property of a given property in exchange for payment of the agreed price.

The final contract of sale, and in particular of a living house, it is usually signed with the support a notary. A "simple" agreement between the parties, however, is in itself sufficient to perfect a valid contract of sale (which should still have all the essential elements of the contract). However, it is not enough to achieve other purposes, mainly the transcription of the sale in the Registri Immobiliari, with effects that we will see later.

Here, therefore, it is necessary the intervention of the notary, who shall be invested to draw up the contract in the required form to be transcribed: the public deed or authenticated private agreement.

The parties are required to submit a personal identification document (e.g. identity card, passport, driving license,...) and social security number (preferably produced by Health Insurance Card, which has replaced the old security number, or codice fiscale), which is necessary to the notary for the fulfillment of taxes. It is important to remember that all the non-residents that want to buy a property must apply to the social security number assignment before the sale.

Secondly, the seller and the buyer must inform the lawyer about their marital status, very important for the consequences that the matrimonial property law has on the validity and effects of the sale.

The parties can chose to not intervene personally to the sale, giving a power of attorney to sell or buy, so that the invested representative, personally appearing before the notary accompanied by the proof of identity (which will be annexed to the agreement), will perform all acts necessary to the success of the contract in the name and on behalf of the person who gave him the power of attorney (which is very useful for non-residents who are abroad or at least for those unable for any reason to go to the notary day of the conclusion).

The notary is also required to verify that the contract is not invalid, and therefore he must play an important role in the control and monitoring of the process, before responding to the parties. In this respect it is necessary that the contract should include a reference to the building permit and that, if also a piece of land is sold with the property it has to be indicated to the original contract and the certificate of urban use of the land itself - issued by the competent local authority - has to be attached. These requirements are mandatory, so if not met the contract will result invalid. It is void but it can be "fixed", it can be, in fact, eliminated later, after observing certain procedures. Still, under penalty of nullity of the contract, the seller must ensure compliance with the state of affairs of cadastral data and floor plans.

Finally, in the contract shall be inserted a special clause whereby the buyer confirms receipt of the information and documentation, including the certificate, in relation to the certification of the energy performance of the buildings; the contract must be accompanied by a copy of the energy performance (Art. 6, paragraph 3-bis of Legislative Decree no. 192/2005). In case of failure to report or allegation, the buyer and seller have to pay, jointly and in equal parts, a fine of between €3.000 to €18.000. The payment of the fine does not exempt from the obligation to file the original or copy of the EPA within 45 days.

The notary then plays a fundamental role: to ensure that the ownership over the property is not legally "defective", preventing the buyer to ask for an extinction guarantee. The notary in fact, before proceeding to the conclusion of the contract, performs all the necessary checks in the land register, intended to ensure that the property is actually owned by the seller, that the same property is not encumbered by mortgages, foreclosures, property rights of others, and so on. Also the other certificates of the property will have to be declared (feasibility, safety and energy efficiency).

In addition, with respect to payments made on or after July 4, 2006, art. 35, paragraph 22 of the Decree-Law no. 223, 2006, both parties - seller and buyer – are charged with the obligation to make a special declaration in lieu of affidavit containing the detailed description of the method of the payment agreed for the sale. The parties must communicate the check number or bank account with whom the price of the sale has been paid, the amount, the account number from which it is drawn or the indication of the issuing bank. All this in order to make the process clear and transparent as possible.

In addition to the above, the mentioned parties are obliged to declare, in the same way, if one of them or both have asked (and used) a mediator and, if so, what was the amount of expenses (and related methods of payment) incurred for mediation.

Last important function for the notary is then to require the timely registration of the contract of sale in the Registri Immobiliari.
The transcription in the Registri Immobiliari is a form of advertising for acts that generally relates to real estate markets/affairs and has multiple meanings.
First, the transcription is intended to provide a general overview of all legal cases of real estate properties; in fact, the main events that relate to a particular property are recorded in it.

But the most important function is that, the transcription allow the parties involved to let all the third parties know about the contract and, more in general, the sale.
If in a contract of sale, the property is transferred with effect between the parties, the transcript makes the transfer known to all, and especially "effective", that it takes effect against third parties. This is of major importance: the so called ‘priority of transcription’ is used to resolve conflicts between multiple potential buyers of the same property from the same seller.

It may seem impossible for that to happen, but sometimes it can happen that a seller can try to sell to more people the exact same building: beyond the obvious injustice of this behavior, our system provides that, among multiple buyers of the same property, prevails the one who first wrote down the contract in the Registri Immobiliari. So it is possible that between two buyers, although the former is the only one who has purchased the property, the second buyer will prevail and considered to be the owner because he first transcribed his act.

To the first buyer, then, for being late in the transcript will only have the chance to proceed to the resolution of the contract to the seller. The principle of priority applies not only to resolve the conflict among multiple buyers, but also to determine whether other acts transcribed or recorded are effective against the buyer: for example, a mortgage or a seizure or a seizure against the seller, if made after the registration of the sale, are ineffective against the buyer, and so it is like they never happened.

The transcription in the Registri Immobiliari is then an action of the utmost importance, that notaries must execute with extreme care and responsibility.

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