Dear all.

My apologies for this long article, but please accept my contribution for all who are about to perform (re)construction works of property in Italy.

The first essential advice I can give you before entering into a contract with a Construction or Renovation Company is: call your legal advisor requesting him to draft a contract between you and whichever Company you have chosen to carry out the work.

A professionally drafted contract is your best protection if any problems connected with the works arise.

Whether this is because of defective material, poor execution of works, variations from the agreed plan or a request for additional money, a professionally drafted contract in both the English and Italian language will prevent a lot of problems and stress and often save you a considerable amount of money.

Below I have summarised the Italian legislation covering this topic.

The contractor is responsible for defects and unauthorized variation of works.
If there are visible defects, the client should not accept the works otherwise he will lose the right to his guarantee (art. 1667, first paragraph of the Italian civil code).

In order to formally contest the works the client should request his legal advisor to notify the contractor through a formal letter of default.

If the client accepts the works, and defects and/or unauthorized variations of works are visible, he will lose the right to a guarantee unless the contractor omitted the defects and variations maliciously.

The contractor is acting maliciously, when; although aware of the defects and/or variations, does not clearly declare such things to the client.

Hidden defects

The acceptance of work, does not compromise the clients guarantee in reference to hidden defects.

Such defects can be contested when they are discovered.

In order to resort to the guarantee the client, through his lawyer, should do the following:

- Report the hidden defects within 60 days of their discovery.
- Take legal action within 2 years from the end of works.

If one of the two above- mentioned obligations is not complied with, the client will lose his rights to the guarantee.

In cases where the contractor not only omitted to confess the defects, but also behaved in a malicious manner in order to hide those defects, the time limit for legal action is extended to 5 years.

Fault of the contractor

Once the defects and/or the unauthorized variations have been proven, the fault of the contractor is considered as presumed, so it will be his responsibility to prove the absence of negligence.

Cover of the guarantee

According to article. 1668 of the Italian civil code, in the case of visible or hidden defects the client is entitled to take 4 possible legal courses of action:

1) He can request the elimination of the defects and/or variations, the total cost to be borne by the contractor;
2) He can ask for a reduction of the price;
3) If the variations or the defaults are very serious he can request the dissolution of the contract;
4) He can request to be compensated for damage.

Responsibility of the contractor for new builds

Article 1669 of the Italian civil code provides particular regulations for new builds.

In such cases the contractor will be responsible for collapse (total or partial), evident danger of collapse or serious defects in the construction.

Jurisprudence has extended this accountability to renovation works expected to last for a long time e.g. paving and waterproofing on a roof.

The contractor’s responsibility will last for 10 years from the date of completion of the works.

The defective work should be contested formally with a legal letter of default drafted by your lawyer and addressed to the contractor within 1 year of its discovery.

Under Italian Law the client has one year from the time of the recorded delivery of the letter of default to start a legal action in court against the Contractor.

Once serious defects are highlighted the contractor is presumed to be responsible unless he is able to prove the opposite.

Examples of serious defects

There is a very significant jurisprudence defining the meaning of “serious defects”.

In broad terms those defined as serious defects are the ones seriously jeopardizing the use of the property or the ones having a significant impact on essential structural elements such has solidity, efficiency and duration of works.

Here are some examples of serious defects highlighted by the jurisprudence:

- Detachment and rupture of a significant number of tiles;
- Inadequacy of thermal insulation;
- Defective heating system jeopardizing the normal use of the property.
- Defects concerning the roof of the property causing infiltrations of water.
- Inefficiency of the plumbing system;
- Defects of the chimney or flue jeopardizing a normal use of the property.

The inspection of works

Article.1665 of the Italian civil code offers to the client the possibility to inspect works before they are signed off.

Such a right exists also during the execution of the work.

It is highly recommended to involve your lawyer in this process and an independent surveyor.

According to art. 1665 par. 4 if the client accepts the works at the point of signing off without requesting an inspection or without contesting; the works are presumed to be accepted.

The work is also implicitly considered as accepted, when the client accepts it without making any type of formal objection.

The direct consequence of this is the loss of the guarantee for visible defects or unauthorized variations, (an exception is made for those ones maliciously not declared by the contractor).

At this stage the contractor will be entitled to the final settlement of his fees.

Avv. Giandomenico De Tullio
Italian Law Firm - Property Lawyer - Buying Italian Property Real Estate Law Advisor - Law Firm Lawyers Puglia in ITALY

You have answered questions my husband has had since I brought up the topic of buying in Italy. Thanks

In essence, the central tenet underpinning Avv De Tutllio’s post is that there is a real need to carry out due diligence on the builder, not only to be sure that you get contractual guarantees, but also to ensure you appoint a company with professional, as well as commercial integrity and thereby avoid, in primis, unwanted surprises with the standard of work, followed by lengthy litigation, and in secundus, problems regarding the responsibilities of both contractor and client.

With regards to the latter, it is important that you understand your obligations and responsibilities in the following two areas, as these have far reaching consequences:

1) Where the client, or legal entity is a person and the client’s responsibilities vis-à-vis the builder’s employees and their salaries. What does this mean? It means that if you have engaged a building contractor to renovate your property and the builder fails to pay his employees, they can, pursuant to article 1676 of the Civil Code, initiate direct action against you for pay that is owed. The claim is however, limited to the balance outstanding at the time. In other words, if you have a renovation contract worth 100K euro, and you have already paid the builder 50K and he fails, for whatever reason, to pay his employees, then the claim can be made on the balance of 50k euro.


2) Where the client, or legal entity is a company. The client in this case may be a limited company for example. Here we are concerned with the client’s responsibilities vis-à-vis contractor and subcontractors employee national insurance contributions and benefits. In essence, if these are not paid by the builder, the client is liable to pay them within two years (and without financial limit) from the date of completion of building work, in accordance with D.Lgs 276/2003. Of course this does not apply to the majority, being that they are individual persons buying and renovating a property, although many investors, especially those purchasing prestigious real estate, farms for agribusiness, or tourist/historical complexes are companies, and are thus subject to these laws..

Finally, in additon to all the checks that need to be carried out (which a competent legal professional can do), it is also important to obtain, if practicable, some bank guarantees to guaratee the builder’s obligations.

__________________
CJ
Magical Marche &
Luchetti & Partners Studio Legale Tributario