Do’s and Don’ts When Buying a Property

Dont be rushed or pressured into signing a compromesso or proposta di acquisto.  These are important documents and shouldn’t be taken lightly.  The compromesso is legally binding and once signed you have to complete the purchase or lose your deposit, unless you have clauses inserted to protect your interests

At the time of the act, your translator should make you aware of the clauses about false declaration.  It is now illegal to not declare if you have used an agent (qualified or unqualified) in the transaction. Not only illegal, but expensive, as the fine is 10.000 euros.  Any decent agent will have no problem being named in the act, if they ask you to declare a private sale they are not acting in your interests and are exposing you to a penal sentence.  On the promise of saving you VAT on their fees they are not only acting illegally but for the foreseeable future can set the Guardia di Finanza on your trail, and that is really not advisable.

It is illegal in Italy for someone who is not registered and qualified to act as an estate agent.  Even the person showing you the house should be registered as an estate agent.  While this may seem nitpicking, its basis is important.  A non registered agent has no right whatsoever to ask you for commission.  It is illegal for them to do so.  Any contract they ask you to sign is worth less than the paper it is written on.  In fact, you are wholly within your rights to refuse to pay a penny to an ‘agent’ who is not registered.  They can do nothing about it, and bear in mind that if the shoe were to be on the other foot, this ‘agent’ would have no problem at all not paying you damages if they sold you a property which was not all it seemed.   Any agent who is not registered with the Chamber of Commerce, or does not display a VAT number, is illegal and you have no protection under the law from malpractise, negligence or incompetence.

A registered agent has the right to ask for his commission at the point of compromesso.  Usually they will ask for half at this point and half at the final act of rogito, but they can ask for 100% at the compromesso as according to the law, ‘the contract has been concluded due to his intervention’ at that point.  A non registered agent has no rights in this respect and if you have chosen to use a non registered agent, it is imperative that you refuse point blank to pay a penny until the final act is signed and you are the legal owner, and furthermore, happy with your purchase

Any sale of a property in Italy must be passed through the Italian legal system, ie. a notaio.  Property cannot be sold legally in another country even if the vendor and the purchaser are non Italians.   Any sale carried out in such a way does not exist in Italy, and you will not be the new owner of your dream home

Unlike the UK, a registered agent in Italy must be independent.  He acts for both the buyer and seller, taking commission from both.  He cannot represent either party, and cannot be in league with one or the other.   If he is found to be so, he has to pay a heavy fine, and can lose his licence. An unregistered agent has none of these restrictions and, as is often the case, acts wholly in the interests of the seller.

The rate of agents commission is advised by the local Chamber of Commerce.  In Sicily it varies between 2 and, now more commonly, 3%.  An agent who asks for more than this is simply being greedy and you should refuse to pay. Unregistered agents tend to ask between 4 and 6%.  You are under no obligation to pay a penny to unregistered agents.  If anything, you should negotiate to below the standard rate as an unregistered agent is not paying either tax or VAT on their earnings

While many English language books urge you to use an English lawyer in the buying process, in an uncomplicated sale, it is not necessary.  A notaio is independent by law, and does all the necessary checks on a property.  A good notaio working on your behalf means that the English lawyers do nothing apart from translate his report.  As some lawyers charge upwards of 10.000 pounds for this service it is well to be forewarned.

There are some qualified agents whose approach leaves a lot to be desired.  The practise of ‘flipping’ a property is not illegal in Italy. However, if the flipping is done by a friend or relative of the agent, it is more than likely that the agent is party to it and is earning on the deal.  This is illegal.   It works like this:  The agent finds a house on sale for 50.000, a bargain!  His friend signs a compromesso with the owner for that price, and says he will sign the act within 6 months.  The property is immediately put back on the market with the agent for 75.000.  Somebody buys the house and pays 25.000 deposit which goes straight into the pocket of the person who signed the compromesso.  At the date of the act, the buyer meets the owner for the first time and pays the 50.000 direct to the owner.   Free market capitalism at work! But if the agent is party to the deal he is collaborating with one of the parties, taking a back hander, and should be reported.

Since the financial crisis many agents have quietly closed their VAT numbers but continue to work; in some cases not even closing their office.  This is illegal, and when they ask you to pay them under the table you must refuse. You are not obliged to pay these people a penny.