1. First stage - THE IRREVOCABLE PROPOSAL TO PURCHASE
Once the buyer has identified the property he or she likes, he or she sends the seller (in the form of a registered letter, fax or by signing a contract delivered to the broker) the UNREMOVABLE PROPOSAL TO PURCHASE, i.e. a written document in which he or she undertakes to purchase the property at a given price, terms and conditions.
The following data must necessarily appear in the irrevocable purchase proposal:
- Identifying data of buyer and seller;
- Identification data of the property (address, description, cadastral data, etc.);
- Deadline for acceptance within which the seller must give consent to the sale;
- Time limits and terms of payment;
- Date and place of the future Preliminary Deed and/or Notarial Deed;
It should be noted that the Irrevocable Purchase Proposal is a unilateral act and binds only the buyer for the duration indicated in the contract;
If the vendor does not respond within the term set by the purchaser, the latter is free of any obligation;
The seller is entitled to reject the proposal. If he accepts it, he must sign it and send it to the buyer via the agency, in which case the parties are committed to each other;
The purchase proposal is accompanied by a down payment (cheque as guarantee or bank transfer) usually from Euro 10,000.00 to Euro 20,000.00 or more, depending on the importance of the property;
- in the first case the cheque, left as guarantee, is handed over to the seller upon acceptance, the amount of which will become a Deposit with Signature on the final price, agreed between the parties;
- in the second case, the bank transfer will be paid in favour of the seller in a time frame agreed between the parties as stated in the irrevocable purchase proposal, normally between 5 and 7 days from acceptance, this practice will be conditioned to a ‘Suspensive clause according to art. 1353 c.c.’.
At this stage the real estate agency requires the buyer to sign an acknowledgement of commission for the work performed. This acknowledgement shall only be paid if the seller accepts the proposal.
If more than 30 days elapse from the date of acceptance of the irrevocable purchase proposal to the compromise or preliminary agreement, the irrevocable purchase proposal itself is subject to registration with the Inland Revenue Agency, the costs being borne by the purchasing party.
2. Second phase - THE PRELIMINARY OF SALE
Usually 1/2 weeks after signing the irrevocable purchase proposal, the seller and buyer sign the compromesso or preliminary sale agreement, which is the contract that precedes the notarial deed and in which all the aspects that will then be formalised in the final sale deed must be clearly defined.
As such, the Deed establishes the right and duties of the purchasing party to acquire the property under the conditions and within the terms set forth therein. Normally the signing of the preliminary agreement is accompanied by the payment of the deposit (a sum of money that the buyer pays to the seller prior to the conclusion of the deal as a guarantee of fulfilment or as a penalty in the event of unjustified withdrawal, usually 20/30 % of the final agreed price).
As stated in Art, 1755 of the Civil Code, the parties shall pay the commission to the real estate agency as agreed with the agent. If the contract is terminated for cause by the buyer, the seller is entitled to retain the deposit by way of compensation. If, on the other hand, the contract is terminated for cause by the seller, the buyer is entitled to compensation equal to double the deposit (Art. 1385 Civil Code). In this case, mediation to the real estate agency is owed in any way by the parties.
The compromise or preliminary sale agreement must necessarily contain the following data
- identification data of the buyer and seller
- description of the property (cadastral data, cadastral plans, provenance, etc.);
- price of the property;
- method and timing of payment (bank transfer, bank/circular cheque, etc.), these will in any case be the same as those indicated in the possible irrevocable purchase proposal; - date of notarial deed;
- presence of any liens or rights (easements, mortgages, etc.); in the case of a bank mortgage, the vendor must settle it in favour of the bank by or at the time of the Deed - report of urban conformity of the property;
- arbitration clause to be used in the event of termination;
- date and signature of the parties;
By law, the preliminary is subject to registration with the Revenue Agency. The costs related to such registration vary depending on the length of the contract itself, the number of annexes and the advances provided for in the contract.
The purchasing party may choose between two ways of transcribing the preliminary sale agreement
- the registration of the preliminary sale and purchase agreement must be carried out at the Registry Office in the same way, either by the real estate agency or by the Notary, the costs for registration are: a Euro 16.00 revenue stamp for every 100 lines of text, a Euro 1.00 revenue stamp for every A4 attachment, 0.50% on the amount of the deposit provided for as an advance in the preliminary sale and purchase agreement, otherwise if it is an advance on the price, it will be 3%. In addition to the payment of the mortgage tax in the fixed amount of Euro 200.00.
- otherwise, if the purchaser prefers to transcribe at the Conservatory of Real Estate Registries, he will have to use the Notary, the cost of which varies according to the value of the transaction. The costs of registering or transcribing at the Conservatoria dei Registri Immobiliari, the compromesso o preliminare di compravendita, are to be borne entirely by the purchasing party.
3.Third phase - THE NOTARIAL SETTLEMENT
From the signing of the compromesso or preliminare di compravendita to the notarial deed, the time may vary from two to six months or more depending on what has been agreed and signed by the parties in the preliminary itself.
The notarial deed is drawn up by a Notary Public chosen by the purchaser and is therefore effective as a Public Deed of Purchase and Sale pursuant to Article 2699 of the Civil Code.
The stipulation takes place in the presence of the contracting parties and the representative of the real estate agency. The deed is drawn up in writing and is read aloud by the Notary who, as a public official, authenticates the signature of the parties by which the transfer of ownership of the property is sanctioned.
The notary's task prior to signing the deed is to carry out the necessary checks to verify that the property complies with town planning and tax regulations and that it is not encumbered by mortgages or other encumbrances. In the notarial deed of sale the agreements and conditions set forth in the preliminary deed are substantially repeated with any variations, clarifications or amendments that may have become necessary in the meantime. At the same time as signing the deed of sale the purchaser pays the amount due for the purchase of the property and settles the Notary's fee including registration fees, registration taxes and transcription of the Deed in the Land Registry.
The balance can be settled in two ways
- bank draft (made out in the name of the seller) for which you must make arrangements and have it drawn up in advance by your bank specifying the exact amount and the exact letterhead.
- bank transfer (which I recommend), the mode of payment of the balance by bank transfer is anticipated a few days in advance (8/9) to the dedicated account of the Notary availing itself of Law n. 124/2017 Art. 1 Paragraph 63 et seq., following the transcription in the Land Registry by the Notary, the same will send a bank transfer to the seller
The notarial deed must contain the following data
- indication in letters of the year, month, day, municipality and place where it is received
- personal data of the notary as well as the notarial district in which he is registered
- identification data of the contracting parties;
- identification data of witnesses and/or qualified interpreters, in the case of foreigners who do not understand Italian
- correct identification of the property sold (description, cadastral data, consistency (the properties with which it borders) accompanied by the floor plans of the property and the accessories (cellar, attic, garage, etc.);
- provenance of the property or indication of the previous transfer of ownership;
- indication of the constraints and limits to the alienability of the property (any active or passive easements insisting on the property);
- clauses contained in the preliminary contract, supplemented if necessary by further details.
- price and terms of payment;
- agreements on the handover of the property and on the buyer's takeover of active and passive encumbrances (when these are not contextual to the deed);
- Energy Performance Certificate (APE);
- Urban Conformity Report, drawn up by a qualified technician;
- Urban Destination Certificate (only for agricultural land);
Decree Law 112/2008 (art. 35) effectively abolished the obligation to attach to the notarial deed the declaration of compliance of the systems (Law 46/90) with the safety standards existing at the time of installation or following modifications to the same only if the interventions on the property took place after 1990.
Although it is no longer necessary to attach this declaration, it is nevertheless advisable to specify in the deed the state of the installations and their compliance with the standards. The Notary registers the final deed of sale at the Inland Revenue Office and transcribes it at the local Land Registry. At this stage the notary registers all real rights such as dwelling rights, usufruct, easements, emphyteusis, etc.
If the purchasing party avails itself of a loan for the purchase of the property, at the same time as the deed, the notary also executes the mortgage deed and subsequently registers the mortgage in favour of the lending bank.
Generally, in such cases a representative of the bank attends the signing of the Deed. At the conclusion of the reading and signing of the Deed, a request may be made for the stipulation to be used for any communications to the Municipality or for meter changes. It is necessary to wait approximately 10/15 days for a certified copy of the notarial deed to be issued.