 Caveat Emptor
Legislation in Italy, albeit prolific, offers the same protection to overseas buyers as it does to Italians. However, the majority of problems arise in fact when buyers neither speak the language nor understand the culture. Italians operate in a different environment to one we are accustomed to in England for example, and although some of the formalities may appear to be similar, the legal system in Italy is really very different. When you compare Civil Law and Common Law the two systems present a number of outstanding differences.
Buying a house in Italy is a relatively safe process, but a lot of buyers tend to make false assumptions about their legal rights and contractual obligations. There are always risks involved, which can easily be overlooked when someone is getting carried away by the dream of owning a property in Italy. In fact, a survey I looked at showed that 80% of buyers believed that the rules in Italy differed significantly from back home, 40% did not know what their rights were under Italian law and 43% were unaware of what their contractual liabilities were. In another survey, 50% of respondents said that they found Italian property law to be confusing.
Whereas Italian convention dictates that the house buying process should follow a particular path, the burden of responsibility must still rest with the buyer. This means that the buyer needs to be aware of any potential risks and take the necessary steps to mitigate them. Moreover, people need to careful, especially in a country where there is no cooling off period after you have signed the contract.
Selling properties in Italy comes under the general category of mediazione. Over recent years the legislation has changed and anyone operating as un agente immobiliare or mediatore is bound by certain rules and regulations which are set by law. This does not stop anyone from acting as an “estate agent” however. In fact, there are many middlemen masquerading as estate agents. The problem is that many of these middlemen neither have sufficient knowledge of the law, nor do they fully understand town-planning regulations, or are they technically competent to advise a client regarding renovation.
For example, I am currently dealing with a client who purchased a house through a middleman. This particular property is very large and requires a substantial amount of renovation work. The client has approached my company to discuss renovation because she received no prior advice because the middleman was only interested in making the sale (and getting his commission). She cannot afford to enjoy her dream home because she cannot afford to renovate it. These occurrences are not uncommon.
Buyers need to know that the Italian Civil Code governs real estate transactions. This spells out exactly who is entitled to practice as an agent and what their responsibilities are. Moreover, the law clearly stipulates that anyone practicing as an estate agent or mediatore in Italy without being iscritto is not entitled to receive any commissions.
I am of the opinion that being iscritto is a start, but not a foolproof guarantee. What counts, among other things, is professional integrity. I also think the point is whether the industry implements and enforces certain standards of performance and whether they are acceptable or not? Judging by the relatively poor performance of some organisations and individuals operating in this business, together with their debateable standards, I am inclined to think not, although perhaps the root of the problem stems from the fact that there are certain unconquered loopholes in the law.
I would add that those of us who operate in this business (licensed agents, interpreters, service providers, property management consultants etc) have a responsibility towards our clients, especially when we are dealing with large amounts of their money and their future hopes and dreams. Mistakes are always possible of course, but there’s nothing worse than negligence, utter disregard for the client or failure to take responsibility when things go wrong, something that most middlemen appear more than happy to do.
Most middllemen and illegal operators will be unaware of the new provisions contained in both Legge 23 Dicembre 2005 n. 266 also known as the Legge Finanziaria and Legge 4 Agosto 2006 n.248. Some of these provisions focus on property transactions. Property has always been seen as a sign of wealth. There are major economic advantages in owning property. It is also easily traceable. These new provisions not only improve the rules concerning the transfer of title, but also ensure better collection of capital gains. They are also aimed at tackling tax evasion and money laundering.
My advice to anyone embarking on a quest to find his or her dream home in Italy is to avoid dealing with:
n Unlicensed procacciatori, brokers or agents
n Ex-pat and other non-Italian operators who, masquerading as agents, dabble in real estate without possessing the proper skills and knowledge
n Any other individuals operating abusivamente (illegally)
n Where a conflict of interest may arise. For example, someone working full time in the public sector
If you do throw caution to the wind then it will be difficult for you to seek remedial action when things go pear shaped. Ignorantia juris non excusat - ignorance of the law excuses no one.
Overseas buyers should follow the same principle that is used in common law countries– that of caveat emptor (let the buyer beware). Remember, post contract litigation is costly, lengthy and time and energy consuming.
When in doubt, seek proper, professional advice right at the beginning. Don't leave it in the hands of just anyone, especially non-qualified practitioners.
__________________
CJ
Magical Marche &
Luchetti & Partners Studio Legale Tributario
Last edited by CJ; 01-30-2007 at 03:28 PM.
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