Completion

The final step

Completion (closing or exchange of contracts), called atto in Italian, is the name for the signing of the final deed ( rogito, atto di compravendita or scrittura privata), which is drawn up by a notary.

The date of completion is usually six to eight weeks after signing the preliminary contract, as stated in the contract, although it may be moveable. Completion involves the signing of the deed of sale, transferring legal ownership of the property, and paying the balance of the purchase price, plus any other payments due such as the notary’s fees, taxes and duties.

When the necessary documents concerning a purchase have been returned to the notary’s, he will contact you and request the balance of the purchase price (i.e. less the deposit) and, if applicable, the amount of a mortgage. He will also give you a bill for his fees and state taxes, which must be paid on completion.

Final Checks

Property is sold subject to the condition that it’s accepted in the state it’s in at the time of completion, so you should be aware of anything that occurs between signing the preliminary contract and completion.

Before signing the deed of sale, it’s imperative to check that the property hasn’t fallen down or been damaged in any way, e.g. by a storm or the previous owners. If you’ve employed a lawyer or are buying through an agent, he should accompany you on this visit. You should also take an inventory immediately before completion (the previous owner should have already vacated the property) to ensure that the vendor hasn’t absconded with anything that was included in the price or purchased separately, e.g. carpets, light fittings, curtains or kitchen appliances, and that they’re in good working order where applicable. You should also ensure that expensive or valuable items (such as kitchen apparatus or antique fittings) haven’t been substituted by inferior (possibly secondhand) items. Any garden ornaments, plants and shrubs present in a garden when you viewed it should still be there when you take possession, unless otherwise stated in the contract.

Some vendors will go to amazing extremes, for example removing not just light bulbs, but bulb-holders, wiring ( flex) and even ceiling roses as well as bulbs, plants, shrubs and trees from the garden!

If you find that anything is missing, damaged or isn’t in working order, you should make a note and insist on immediate restitution such as an appropriate reduction in the amount to be paid. In such cases it’s normal for the notary to withhold an appropriate amount in escrow from the vendor’s proceeds to pay for repairs or replacements.

Although you or your lawyer should already have checked that there are no encumbrances, e.g. mortgages or loans, against a property or outstanding debts, it’s important for you or your lawyer to go to the land registry and check ALL entries up to the day of the completion (this could be done a few days earlier and then you need only examine entries since the last check on the day of completion).

SURVIVAL TIP
You should refuse to go through with the completion if you aren’t completely satisfied, as it will be very difficult or impossible to obtain redress later.

If it isn’t possible to complete the sale, you should consult your lawyer about your rights and the return of your deposit and any other funds already paid.

Declared Value

The deed of sale includes a declaration of the price paid by the buyer. In Italy, it’s customary for the declared price to be less that the actual price paid, in order that the buyer pays lower fees and taxes, although this is illegal. If you’re tempted make an under-declaration ( sottodichiarazione) and the buyer agrees to it (most will), make sure that it isn’t less than the property’s value recorded at the local land registry ( catasto).

The declared price is usually between 10 and 20 per cent below the actual purchase price in cities, where property values are well documented, but in rural areas prices are often under-declared by 50 per cent or more. However, the authorities have been revising property values in recent years and fiscal values are now closer to actual values in many areas. If you under-declare the value too much, the tax authorities may make their own valuation and tax the parties accordingly, which may also result in a fine. Take advice from your estate agent and/or lawyer when declaring the value on the deed of sale.

Signing

The final act of buying is the signing of the deed of sale ( rogito), which takes place in the notary’s office. Before the deed is signed, the notary checks that all the conditions contained in the preliminary contract have been fulfilled.

It’s normal for both parties to be present when the deed is read, signed and witnessed by the notary, although either party can give a representative power of attorney ( procura). If you’re married, you must produce your marriage certificate so that it can be noted whether the property is to be owned jointly by both spouses ( comunione dei beni) or by one only. If you don’t understand Italian, an officially accredited interpreter must be present or a power of attorney must be given to your agent or lawyer. This can be drawn up by your agent or lawyer or a notary in Italy or by a foreign agent or notary and authenticated by an Italian consulate in your home country, although the latter procedure is more complicated and expensive.

Payment

The balance of the price after the deposit and any mortgages have been subtracted must be paid by banker’s draft ( assegno circolare) or bank transfer. The money can be transferred directly to the seller’s bank account or you can pay by banker’s draft, which is the better method, as you will have it in your possession (a bank cannot lose it!) and the notary can confirm payment immediately. It also allows you to withhold payment if there’s a last minute problem that cannot be resolved.

If you and the buyer are of the same nationality, you can agree that the balance is paid in a currency other than euros, although the notary must also agree to this. In this case, the money should be held by a lawyer or solicitor in the vendor’s or buyer’s home country.

After paying the balance due and receiving a receipt you’re given the keys, but you aren’t the legal owner until the property has been registered (see below).

Registration

There are no title deeds as in the UK, for example, and proof of ownership is provided and guaranteed by registration of the property at the land registry ( catasto). The land registry’s stamp is placed on the deed of sale, a certified copy of which is available from the notary around two to three months after completion. If you have a mortgage, it’s also recorded at the land registry. The original deed is retained indefinitely by the notary.

Registration is of paramount importance; until a property is registered, you aren’t the legal owner. It’s also important to check your copy of the deed of sale after registration to ensure that it’s correct in every detail.

Formal notification of the purchase must be given to the local police authorities ( questura) via a form usually provided by the notary.

This article is an extract from Buying a Home in Italy. Click here to get a copy now.

Further reading

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