Buying Property in Italy: Due Diligence Before You Commit
Buying a property in Italy should be an enjoyable experience. Yet, behind the pleasure of finding the right house or apartment, there is a considerable amount that deserves to be established before a buyer becomes committed to the purchase. Some matters are immediately apparent; others are not. Ownership, mortgages and other burdens, easements, planning history, building compliance and possible restrictions involve different Italian procedures and records. The physical condition of the property is another matter altogether. The findings may influence not only whether to proceed, but also the price and terms on which a buyer is prepared to do so. This is why the relevant investigations are best undertaken before signing a preliminary contract or paying a substantial deposit.
There are therefore several areas which deserve particular attention
- Title and Ownership:
The first question is straightforward: who owns the property, and can they sell it? This means establishing the property’s ownership history through the relevant deeds and records, which may include purchases, successions, donations and other transactions affecting the property. Where, for example, ownership derives from a succession or donation, it may also be necessary to trace the title further back to the purchase or other transaction from which that ownership originated. Where the property is owned by a company or other legal entity, the relevant corporate ownership and authority to sell will also need to be established. The notary will undertake the searches required for the final deed. For a buyer, however, it is advisable to establish the position earlier — particularly before signing a preliminary contract or paying a significant deposit.
- Mortgages, Liens and other Burdens
A property may be affected by mortgages, liens, seizures or other registered burdens. These are investigated through the relevant property registers, including ispezioni ipotecarie available through the Italian Revenue Agency in the appropriate section. The notary will undertake the searches required for completion. For a buyer, however, discovering the existence of a mortgage or other burden only at that stage is unnecessarily late. Where relevant investigations have not already been undertaken, this should be addressed before the buyer becomes committed.
- Easements and Third-party Rights
There may be rights of way, access rights, rights concerning wells or water, pipelines or other infrastructure, or rights benefiting neighbouring properties. These matters can be particularly relevant in the countryside. A track may be shared, a well may serve more than one property, or access may depend upon rights established many years ago. There may also be pre-emptive rights in particular circumstances, including those affecting agricultural land. Such rights should be identified and understood before the buyer commits, so that the decision to purchase is made on a properly informed basis.
- Planning and Building Compliance
This is one of the areas where misunderstandings most often arise.
What exists physically today should be compared with the property’s authorised planning history. Depending on the property, this may require an accesso agli atti by the owner or with the owner’s authorisation, with the relevant Comune, examining permits, licences, authorisations and other documentation relating to its construction and subsequent alterations. Attention is needed where there have been extensions, conversions, changes to internal layouts, enclosed terraces or balconies, garages, outbuildings, swimming pools or other works.
The essential question is: Does what exist correspond with what was authorised, or, where no authorisation was required at the time, was it lawfully established? The cadastral official plans are far from being the answer to this. Cadastral and planning records have different functions, and the existence of a cadastral record should not be confused with proof of full planning compliance.
Planning and title investigations do not, however, establish the physical condition of the property. Where appropriate, the building itself may require a separate technical assessment, particularly in the case of older properties or those requiring renovation.
Moreover, any previous sale is not the ultimate guarantee. It is common to assume that if a property has been sold before, any irregularities would already have been identified. That cannot safely be assumed. Italian properties often have long histories. Regulations and building practices have changed considerably over the past 60 years and, in many cases, requirements were not fully or consistently observed, while works may have been undertaken without the documentation one would expect today, or without the relevant paperwork having been properly reviewed.
A purchase completed after 2020 may provide some additional reassurance where a technical report confirming urban-planning, building and cadastral conformity was prepared and the relevant documentation properly reviewed at the time. But this cannot be assumed simply because the property was previously sold and the transaction completed before an Italian notary. The point is to recognise that a previous sale is not the same as due diligence for the next buyer.
- Historic and protected properties
The historic and traditional character of many Italian properties is one of their great attractions. Being historic or traditional does not, however, necessarily mean that a property is formally protected. Where relevant, due diligence should establish whether cultural, landscape or other formal restrictions apply. This can be particularly important where a property is protected but the owner may not fully appreciate what the restriction means for alterations, renovation or the property itself. It may also have implications for ownership obligations and tax treatment. The existence of a restriction is not necessarily a disadvantage. It is simply part of understanding the property and its implications before committing to the purchase.
Choosing advice before choosing the property
There is one final point which is particularly worth considering for international buyers.
It is not unusual for buyers to arrive in Italy with properties already shortlisted from online portals, local contacts or previous visits, and only seek professional advice once they have found the property they would like to buy. Others seek advice only when an offer has been accepted and has already become a preliminary contract, where the offer itself was drafted to envisage this, or when a preliminary contract is placed before them with the question: “Should I sign?”
This can be rather late.
Timing is part of due diligence
A problem discovered before a preliminary agreement can often be clarified, resolved or reflected in the negotiated price and terms. The same problem discovered after a deposit has been paid may become a matter of contractual negotiation. Discovered later still, it can become a dispute. This is why due diligence ensures that the buyer has the information needed to make an informed decision while there is still freedom to decide. Investigations can remove the vast majority of risks from a property purchase; they do away with the risk of discovering some major issue after it is too late to deal with it from a relaxed stance. For any buyer and specifically international buyers, taking appropriate advice from the outset can make the difference between simply finding a property and understanding the property being purchased.
The purpose of due diligence is to replace assumptions with facts, and uncertainty with informed judgement. Before committing to buy a property, be aware of its facts — and select and rely on the professional qualified to establish them.
Dott. Linda Cesari