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General Italian Law

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For some time now the Italian authorities have been trying to improve the transparency and reliability of the real estate market. Few years ago, new legislation was put in place to allow for the registration (trascrizione) of preliminary contracts, to protect buyers involved in long term property acquisitions from dishonest vendors. At the end of July 2005 a new raft of legislation came into force protecting buyers of residential buildings sold whilst still under construction.

The wrong that this legislation is intended to remedy is basically the case of an innocent buyer who exchanges contracts on a property still to be built / being built and pays a substantial deposit, only to find some time later and before completion of his acquisition that his vendor / builder is insolvent. Typically there will be banks and other financial institutions who have lent to the vendor / builder and have taken security over the very same property. In such a scenario, our innocent buyer could frequently find that his property will be sold by the banks or that the trustee in bankruptcy of the vendor / builder will not complete / sell the property, and any funds previously paid are not refunded.

A double whammy, in practice. To the loss of the dream property, the loss of the deposit paid is also added. A complete catastrophe both for any buyer, which could be even more shocking to foreign buyers unaware of the complex insolvency legislation. It has been calculated that over 200,000 Italian families have been suffering this fate in the last few years, in Italy. This has prompted the Italian legislator into action.

The new legislation is complex, as it is a combination of enabling legislation issued by the Italian Parliament, and delegated legislation which has only recently been published .

Leaving aside the technicalities and complex definitions, this new legislation provides that when a house /  property is sold before it is actually built (off plan) or still being built, then the vendor / builder must deliver to the buyer:

a) a bank guarantee (Fideiussione) covering all the sums paid before completion of the sale and delivery of the property, such as the legal deposit usually paid upon exchange of contracts (Compromesso stage) etc. This bank guarantee must provide for a bank / guarantor to refund the promising buyer, in case of insolvency of the promising vendor / builder, within 30 days of request and upon delivery of all the required documentation evidencing the sums paid the vendor / builder

b) a 10 year insurance policy (Polizza assicurativa indennitaria) for all potential building defects of the house / damages caused by its total or partial collapse, including third party damages. This insurance policy will be due upon completion of the acquisition (Rogito stage).

In addition this legislation now provides that a long list of detailed information and technical documentation has to be included / reported in any preliminary contract (Compromesso) for the sale of an Italian property under construction such as:
- a list of all planning permissions
- a full set of specifications of the building being sold
- a full list of all amounts and dates of any payment due
- full details of the bank guarantee (mentioned above)
- full measurements and maps of the building being sold
- full list of deadlines to complete constructions etc.

The drafting of the “Compromesso” frequently left to local agents, has now become a technical and legally complex operation, which may well take some time, and is probably better left to practising lawyers.

Very useful additional protection is also provided by this recent legislation. Where the property under construction was delivered to the buyer before both completion and the insolvency of the vendor / builder, then whether or not an application for refund under the bank guarantee is made, the buyer may also be entitled to a pre-emption right (Diritto di prelazione) over the property. This right will enable the buyer, to acquire the building under construction with priority over any other third party. If this is practically possible, both the sums paid to the insolvent vendor / builder and the building itself are safeguarded.

In addition where the house under construction is to be used as the main residence of the buyer or a member of his family within 12 months of completion, provided the correct market price has been paid, it will no longer be possible for the trustee in bankruptcy of the vendor / builder to claim it back (Revocatoria fallimentare) .

Finally this legislation provides for the setting up of a compensation fund (Fondo di solidarieta` per gli acquirenti di beni immobili da costruire) to be financed with a levy on local builders, aiming to compensate buyers who for any reason have lost their property following the insolvency of their vendor / builder. Although the funds available are likely to be limited at least in the near future, this fund is useful additional protection for innocent buyers.

It has been said that this legislation will cause an increase in the price of Italian properties currently being built and sold "off plan" as it will obviously require additional financial commitments on the part of vendors / builders.

This legislation will also involve additional costs for all buyers who frequently, in the past, used to declare a lower price in their Deeds of Sale (Rogito) in order to evade Italian taxes payable on completion. Considering the risks involved in losing the protection of this legislation and the other recent Italian tax legislation which is now increasing the controls and supervision of Italian tax authorities on this kind of transactions and on the sale of Italian real estate generally, it is in the buyers` interest to comply with the relevant legislation and declare the true and correct price in the Deed of Sale.

At the end of the day, whatever taxes may be payable on the acquisition of Italian real estate by private individuals, Italy is still one of the few countries where no capital gains tax is usually levied if the same property is later sold five years after its acquisition and where effectively there is only a 3% death duty tax payable instead of full blown inheritance tax, in most cases.

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My apple trees will never get across/
And eat the cones underhis pines. I tell him. /
He only says, "Good fences make good neighbours".
[Mending a Wall] Robert Frost (1874 - 1963)

And now that you own your Italian property, make sure you enjoy it without neighbour problems, or if you do have problems, at least make sure you know your basic rights and duties. This is only partial outline, in case of actual problems it is always advisable to consult an Italian lawyer.

Here follow some excerpts from the Italian Civil Code you may find useful:


Extent of the owner’s right - The owner has the right to enjoy and dispose of his property fully and exclusively, within the bounds and in compliance with the legal system.

Malicious acts - The owner is not entitled to act with the sole purpose of harming or causing nuisance to others.

Expropriation in the public interest - None can be deprived, wholly or in part, of his property except where this is necessary in the public interest. In such cases, the public interest must be legally declared and any expropriation can only be effected upon payment of a fair indemnity.
The rules as to public expropriation are provided by special legislation.


Subsoil and air space - The ownership of land extends to the subsoil , with anything that may be appurtenant to it and the owner can freely dig and carry out any work which will not damage his neighbour`s. This rule does not apply to anything which is subject to the laws on mines, quarries and peat-bogs.
Anything subject to the legislation on antiquities and fine arts, on water or hydraulic works and other special legislation, is also excluded.
The owner of the land cannot object to the actions of third parties which are carried out at such a depth, or so high up in the air space, that cannot possibly affect him.

On fencing the land - The owner can always fence his land, at any time.

On hunting and fishing - The owner can not prevent the access of hunters, except where the property is fenced in as provided by the law on hunting, or crops are being grown which may be damaged.
The owner can always prevent the access of anyone who does not have a licence issued by the authorities.
Any fishing is subject to the consent of the owner of the land.

On neighbours` access to land - The owner must always allow access and passage across his land to his neighbour when this is required in order to repair walls and other buildings. Where any damage is caused, a fair indemnity is due.
Similarly, the owner must allow access to anyone who wishes to collect his property which has accidentally ended up on the land, or to collect any animal which has escaped. The owner may avoid such access of third parties, by delivering up to them their property or animals.

On interference - The owner cannot prevent smoke, heat, smell, vibrations and similar matters / nuisances originating from his neighbour’s property for so long as these matters came within what is normally accepted, considering the nature of the neighbourhood.
In applying this rule the Courts shall balance the interests of the owner with the interests of the economy.....(etc.)


On distances between buildings
- Buildings belonging to adjoining owners must either be fully joined to each other or must stand at a minimum distance of three metres from each other. Local regulations may provide for a wider minimum gap.

Compulsory joint ownership of boundary walls - The owner of land next to a boundary wall of his neighbour may apply for the joint ownership of the full or a section in height of such wall, on condition that it will apply to its full length. In order to obtain such joint ownership payment must be effected for the value of 1/2 of the wall in question and of the land on which the wall is built.

Compulsory joint ownership of walls other than boundary walls - Where a wall is less that half a meter away from the boundary, or less than half of the minimum distance otherwise provided by local regulations, a neighbour can apply for the joint ownership of such a wall only if he intends to build on or next to the wall itself. In this case payment is due for the value of one half of the wall and for the value of all the land taken up by the new building, except where the owner prefers to extend his wall up to the boundary.
Any neighbour wishing to acquire such joint ownership must first ask the other owner whether he prefers to move the wall up to the boundary or otherwise to pull it down. The owner must then reply within the next 15 days and must complete any building or demolition work within the following 6 months.

Assumptions as to ownership of dividing walls - The wall running between adjoining buildings is assumed to be jointly owned up to the top of the buildings. Where the buildings in question have different heights, up to the point where one building is higher than the other. Similarly dividing walls between courts, gardens, kitchen gardens or fields are assumed to be jointly owned.

Sole ownership of dividing walls
- Boundary walls between fields, courts, gardens or kitchen gardens are assumed to be fully and solely owned by the owner of the land on which the slope at the top of the wall allows rainwater to run.... (etc.)

Repairs to the jointly owned boundary wall - All owners shall share the cost of repairs and re-construction required by a jointly owned wall, in proportion to their entitlement, except where the repairs or re-construction are due to the acts of one of the owners.
Any joint owner of a jointly held wall may avoid these expenses by renouncing his rights over the wall, on condition that the said boundary wall does not support any of his buildings. In any case such renunciation will not apply to the owner who caused the requirement for the repairs / re-construction in the first place.

Compulsory minimum distances for wells, water tanks, ditches and pipes - Where one party wishes to dig wells, build water tanks, septic tanks or manure tanks near boundaries, even where any boundary is marked by a wall, he shall allow a minimum distance of two metres between the boundary and the nearest internal part of the above works.
Any pipes carrying dirty or clear water, gas pipelines and similar must be located at least one metre away from any boundary. All applicable provisions in local regulations are excepted.

Compulsory minimum distances for trees
- Anyone wishing to plant trees next to his boundary shall comply with the minimum distances provisions in local regulations and customs. If no such regulation or custom applies the following minimum distances from the actual boundary will be required:
1) Three metres for forest trees - forest trees are those trees whose trunk, on its own or with branches, reach a substantial height such as walnuts, chestnuts, oaks, pines, cypresses, elms, poplars, plane trees and similar trees
2) One metre and a half for trees which are not forest trees. These are trees where the branches grow out of the trunk at a height of less than three meters
3) half a meter for vines, bushes, hedges and fruit plants not exceeding two and a half metres.
Such minimum distance must however be at least one meter for alder, chestnut and similar trees / hedges, which are cut back to their base periodically, and two metres for robinia hedges.
The distance must be measured between the boundary and the external bark of the tree at the time of planting, or the line of planting itself.
Such minimum distances are not compulsory where there is a boundary wall, on condition however that the trees will not be allowed to grow higher than the wall itself.

Trees at an illegal distance - A neighbour can always apply for an order that trees or hedges which are planted or grew naturally at a distance from the boundary which is less than the above, be removed.

Cutting of overhanging branches or invasive roots - Where tree branches of a neighbour overhang over the property of another, the owner can always compel his neighbour to cut them back, similarly such owner can himself cut any roots invading his property, subject to local regulations and customs.
Unless local customs otherwise provide, any fruit naturally dropping from the neighbour’s overhanging branches, belongs to the owner of the land on which it fell... (etc.)

WARNING: Please keep in mind that these are only the outlines of the relevant detailed legal provisions, if you have any serious concern / problem you must always consult an Italian lawyer. I cannot accept any responsibility for the points dealt with in this section unless I have first given specific professional advice on the matter.

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