The search for a private real estate lawyer has been increasing up to 27% annually for those who want to:
- Buy a house or land in Italy or abroad
- Sell a house in Italy
Up until 5 years ago, the assistance of a lawyer specializing in real estate law was only required if transactions exceeded 1 million euros.
But that is a whole new story now. Recently, even for businesses between € 80,000 and € 950,000, whether small or medium-sized buyers / sellers seek and request legitimate real estate legal advice from lawyers experts in real estate law, to ensure a safe management of the deal.
The need to receive preventive assistance, already starting from the negotiation stage, arises due to:
- The desire to avoid real estate lawsuits ( often too expensive, stressful, risky)
- The poor reliability of some sellers
- The insolvency of some buyers
The most common mistake many people make when getting into contracts in the real estate sector, is to seek advice from a real estate lawyer when it is already too late.
As a matter of fact, accurate sector studies have confirmed that a lawyer specialized in real estate law can actually guarantee:
- Security within the management of the business
- Controversy resolution at an early stage, in order to avoid future disputes
I am Gianluca Piemonte, a Italian lawyer specialized in real estate law both in Italy and abroad. In this article, I will talk to you about how I can support you in the field of real rights (commonly known as “real estate rights”).
1. Real estate in Italy: due diligence
A Italian lawyer specialized in real estate law initially deals with the so-called due diligence on behalf of the client.
Due diligence is an investigative activity that allows you to know more about the data and information object of the negotiation.
Thanks to this process, it is possible to evaluate the convenience of the deal and the overall safety of the operation.
Real estate due diligence allows you to:
- Identify the property, subject of the negotiation
- Know the origin of the property
- Evaluate whether the property can be sold, leased or rented free from weights and constraints (for example, knowing whether it is mortgaged, foreclosed, etc.)
There are different types of due diligence that can be performed.
Legal due diligence
Legal due diligence is generally the first activity performed, since it is the most important. It allows you to verify the property documents (deed of the origin of the property, cadastral surveys, weights and constraints, etc.).
A very common mistake of investors is to independently check the documents using the same ones that were provided by the seller. The real estate lawyer, on the other hand, would not carry out the due diligence using the documents provided by the other party per reference, but rather use those extracted from the Agenzia delle Entrate (AdE) – Registry of the Revenue Agency (IRS).
Economic due diligence
Usually, the economic due diligence is initially carried out by the customer in a summary, when he/she is interested in a particular property.
The most common mistake is to base the assessment on the basis of one single data ( balance between price /size).
The assessment, on the other hand, must base itself on one single market of reference, in a present and future perspective. In this context, it is necessary to evaluate the single price data based on the area of reference (in a selective way: city and non-region, district and suburban, street and non-district, floor and non-area) but also on the basis of the purpose of usage (home, office, commercial or industrial, hotels, shopping center, agricultural land).
Technical due diligence
The techinical due diligence is the last investigation to be carried out in the process, even though its role is crucial.
As a matter of fact, It allows you to evaluate different aspects of the property whether:
- Structural
- Plant engineering
- Environmental
The analysis will allow you to personally view the property and compare it with the floor plans, to ascertain there are not any building abuses or amnesties. Moreover, this further step allows you to assess the quality and state of the building, both in terms of the finishes and in terms of the structure.
It is also possible to pursue an in-depth analysis tied to costs and times for eventual adjustments:
- Renovation
- Change of usage
- Redevelopment
- Reconstruction
2. Negotiation
Did you know that 75% of real estate lawsuits could have been avoided simply through legal advice during the negotiation phase?
The purchase of a property is always preceded by a pre-contractual phase, during which negotiations are carried out between the seller and the buyer.
And it is precisely during this phase that it is necessary to collect the property data in order to carry out the due diligence we explained earlier.
Furthermore, at this stage it is a wise thing to carry out research also on the other party or on the agency acting as the intermediary, to better understand the seriousness of the negotiation and useful information.
3. Compensation for pre-contractual damage
Many believe that you are free to behave in any given way during the negotiation phase (making unreasonable proposals, hiding information, etc.).
Truth is, poorly managed negotiations can also lead to the obligation to compensate the other party for damage.
To give a concrete example, we have also provided assistance to customers who had carried out negotiations for the purchase of a house that had reached a suitable stage to pursue a reasonable reliance on the contract conclusion. For this reason, my customers had bought a garage in close proximity, a purchase which then resulted due to the lack of purchase of the house nearby.
The negotiations, therefore, must always be carried out with contacts and exchange of emails containing relevant content or agreed upon with the italian real estate lawyer.
4. Irrevocable purchase proposal
The first real formal act within the purchase or sale of properties is the option, better known as an irrevocable purchase proposal (“proposta irrevocabile di acquisto“).
This act is almost always proposed by real estate agencies and serves to guarantee them seriousness in the negotiation. In fact, the signing of the purchase proposal is accompanied by the payment of a deposit.
Agencies offer the purchase order proposal in a pre-printed form, leaving some understanding that it cannot be changed.
But the reality is that being able to intervene on the content of the proposal to protect one’s own interests should be taken into consideration. For example, being able to ask to change:
- Duration of irrevocability
- Amount of the deposit
- Right to commission or its amount
- Any clause to be adapted to the customer’s needs, and not just to the real estate agency’s ones
The irrevocable offer increasingly provides more guarantees to those who sell. That is why the buying party must be professionally looked after and guided by a professional specialized in real estate law. As a result, at another stage, you can avoid looking for a lawyer to follow your real estate cases (with more expensive court fees compared to a house-sale consultancy).
5. “Compromesso” or preliminary contract
The preliminary contract must have the same content as the final one, which is why it must be signed with a certain degree of caution and thoughtfulness
The second formal act, generally subsequent to the purchase proposal, is the so-called “compromesso” (technically called “preliminary contract“).
With the preliminary contract, all parties undertake the responsibility to conclude the subsequent final contract, where the essential characteristics are stated (such as the price).
In the abstract, the parties can directly sign the final contract after negotiations, avoiding the need for a proposal or compromise.
The main reasons a preliminary contract is often used for are:
- To link the signature of the final contract to specific conditions (for example a building concession, a job transfer, etc.)
- To verify certain circumstances before signing the final contract
The parties, therefore, do not need to physically go to the notary immediately for the final contract but can rather use the “compromesso” in order to “block” their willingness to purchase and sell.
6. Notarial deed in front of the notary
The preliminary contract must have the same content as the final one, which is why it must be signed with a certain degree of caution and thoughtfulness.
The second formal act, generally subsequent to the purchase proposal, is the so-called compromise (technically called “preliminary contract” – in Italian “compromesso” or “contratto preliminare“).
With the preliminary contract, all parties undertake the responsibility to conclude the subsequent final contract, where the essential characteristics are stated (such as the price).
In the abstract, the parties can directly sign the final contract after negotiations, avoiding the need for a proposal or compromise.
The main reasons a preliminary contract is often used for are:
- To link the signature of the final contract to specific conditions (for example a building concession, a job transfer, etc.)
- To verify certain circumstances before signing the final contract
The parties, therefore, do not need to physically go to the notary immediately for the final contract but can rather use the compromise in order to “block” their willingness to purchase and sell.
7. Notarial deed in front of the notary
At this stage, it is strongly advised to receive the draft of the deed to be signed in front of the notary largely in advance and to never go to the notary directly without having deeply read this draft. The draft of the contract must be read and studied with extreme attention, since a clause or even a single word is enough to violate your right or to benefit the other party in an excessive way.
At the time of the deed, it is only necessary to pay attention and make sure that the final version read by the notary coincides with the draft received previously.
However sometimes, the buyer or seller may reside abroad. In this case, the practice of the special power of attorney to sell or buy is widely used, thanks to which the power to sign the documents is transferred to another person (for example a relative residing in Italy or directly to a lawyer). In order to be valid, the power of attorney must be notarized.
8. Assistance during the mortgage procedure
By now, almost all real estate purchases take place thanks to a loan granted by the bank.
While carrying out negotiations, it is very important to highlight this need to the seller.
There are several ways to protect yourself with the other contractual part before obtaining the loan. For example, the signing of a purchase proposal must always be preceded by the insertion of the clause “Purchase proposal is bound to the acceptance of a loan”. Therefore, you would not be exposing yourself to risks nor constraints before obtaining the loan from the bank.
Obviously, this is just an example written within an online article, but in practice, I also recommend other clauses to be adapted to the customer’s case.
Mortgage contracts are among the most complex within private law, so they are signed only when and if fully understood.
Above that, the Italian law provides several concessions that allow considerable economic savings. For this reason, it’s always a good thing to keep in mind all the information tied to the real estate sector.
9. Purchasing and selling a house in Italy
90% of our clients request the assistance of a real estate lawyer for the purchase or sale of a house in Italy (main cities concern Milan, Rome, Turin, Florence, Taormina, Noto, Capri, Cervinia; main regions Tuscany, Lombardy, Trentino Alto Adige, Abruzzo, Sardinia, Sicily, Apulia, Liguria, Basilicata).
Buying a house in Italy doesn’t just mean coming through an ad with nice photos and a good price. It is always a commercial deal that can cause the risk of a bad investment (real estate already mortgaged, unreliable payment methods, real estate with hidden defects, disadvantageous purchase and payment methods, unclear or compromising terms, etc.).
The Italian lawyers specialized in real estate law assist the client with each and every step, from the pre-contractual phase to the signing of the final contract. In addition, legal assistance can be extended to the clients of the law firm also for subsequent problems, such as property defects, release of the property by the tenant, etc.).
Buying a house abroad
On the other hand, 10% of our contacts seek real estate legal advice either for personal purposes (buying a house to live abroad) or for an investment (renting abroad, opening a business premises or shop abroad). In these cases, it is always advisable to rely on specialized assistance within the foreign country, always supported, however, by an Italian real estate lawyer.
In doing so, all relations with the other foreign real estate lawyer can be managed by an Italian lawyer who will be able to report and advise the client on all aspects of interest (legal, tax, organizational).
10. Advantages of having a lawyer experienced in real estate sales
The erroneous purchase of a house or land can involve very high risks that even a subsequent dispute in court may not be able to resolve. For this reason, the assistance of a lawyer specialized in real estate sales is appropriate starting from the very first stage of negotiations, the most crucial phase of the whole entire operation.
During the negotiations and the real estate due diligence it is in fact possible to filter all the interesting and uninteresting transactions, saving time, stress and money.
It is also possible to receive legal assistance during the mortgage agreement when purchasing a house, after a curated comparison with other contracts available throughout the Italian territory.
92% of real estate law transactions arise from online advertisements, whereas the remaining 8% come from agency contacts or advertisements written on paper.
For this reason, any purchase or sale in real estate law can be characterized by:
- Scams
- Untrustworthy or unreliable sellers/buyers
- Inappropriate business management
- Loss of opportunity
- Closure of the deal at a price which is too high for the market (if you are the buyer)
- Closure of the deal at a price too low for the market (if you are the seller)
- Non-compliance leading to a real estate lawsuit (litigation)
From reading this article, by now, you will have understood that the assistance of a real estate lawyer should not be seen as a cost, but rather as a benefit for a safe purchase. All while being able to avoid unnecessary or future expenses.
How to get assistance from a Italian real estate lawyer?
Here are 3 simple steps to follow:
- Get in touch with me by leaving a message from my page CONTACT US
- Tell me your goals and your needs
- Receive a free quote in a clear and transparent way
You will have personalized assistance for your specific case and will be constantly updated on the entire ongoing process. The goal will be to support you, and not to replace you, with the ultimate goal of carrying out all the trading operations with ease, clarity and safety.
Contact me and I will be happy to help you, just like I have already helped many other Italians in the real estate business.