Buying or selling Italian residential properties frequently involve the assistance of local Italian estate agent. It is important to establish the right relationship, from the very beginning, crucially, before any document is signed and any money is paid.
It is also important to realize that Italian estate agents law is very different from the English equivalent. To assume that estate agents are subject to approximately similar professional rules in England and in Italy is both deceptive and dangerous. It can lead unwitting British buyers into serious problems.
- Italian agents
Italian estate agents are called “Mediatore” and are defined as individuals or companies who introduce two or more parties to each other with a view to them doing business with each other, without being legally employed, having legal representation or being otherwise formally connected to either of the parties.
Professional Italian agents usually ask clients to sign a contract / form stating their remuneration. The law in Italy requires that such form should have previously lodged at the local chamber of commerce, which implies some form of control on the agent`s terms of business.
If a Mediatore does not forward his terms of business, he /she should be asked for them by any “Italian property-wise” buyer. It is useful to know the amount of commission that will be charged, from very beginning. If specific property details are included in the form, it will be necessary to ascertain whether any legal commitment to buy will follow signature of the form, as the Mediatore may really be presenting the buyer with a preliminary contract / offer to buy, rather than just his / her terms of business.
A potential buyer should always keep in mind that, under Italian law it possible for commission becoming payable, even if there was no previous agreement between the parties, even if the word “commission” (Provvigioni) was never spoken. Such right arises from the simple fact that the Mediatore has actually put in touch buyer and seller. Because no actual contract is actually required, commission (Provvigione) may be due also where any third party, not necessarily a professional estate agent, informally, puts in touch a buyer and his seller. So, every time an “intermediary” is involved in property transactions, it is important to ascertain, beforehand the potential cost (Provvigione), if any of such service.
On the Italian residential property marked, Provvigioni are usually paid by both parties, the buyer and the seller. Usually, at the rate of 3% (plus Italian VAT) of the property price. A Mediatore is also entitled to a refund of his out of pocket expenses.
It is advisable to enquire about these matters and to get written confirmation at the very beginning of the Italian property search. Because the legal implication of contractual documents may not always be fully appreciated when dealing with a foreign legal system, legal assistance is advisable, before any document is signed and before any deposit is paid out.
Under Italian law a “Mediatore” may have specific professional duties, depending on what may have been actually agreed with their client, and a general, overarching duty “to disclose facts and circumstances known to him, relating to the evaluation and security of the proposed deal, which may affect the decision of whether to enter into a contract”. As soon as a sale is agreed, a Mediatore is entitled to his commission.
Several decisions of the Italian Supreme Court provide that a Mediatore, in his role as independent intermediary, is only required to pass over information actually known to him about the particular property / deal, or any other circumstances which may be relevant to the parties.
Without a specific request / contractual commitment, a Mediatore is not required to carry out any property searches in order to find out the minute details of the legal title to the property offered for sale. Mediatore may innocently rely on the (biased / sometimes untrue) words of prospective vendors. This is why, whatever the initial assurances and promises, Mediatore`s information and residential property particulars should always be taken with a pinch of salt.
This is also why, independent legal advice is advisable, before any residential property contract is signed and any deposit is paid. Once the contract
has been signed and money paid, however good your lawyer, it may be too late!
A Mediatore`s duty is simply not to mislead, on the basis of what he / she actually knows at the relevant time. Misleading may, sometimes include suppling information which he has not previously checked. If there is any doubt, the law requires estate agents to abstain from proffering uncertain information. However, the line beyond which actual liability for damages arises under Italian law is blurred, not always clear and difficult to prove.
Under Italian law, the actual care and attention required of a Mediatore are the average, normal ones of professionals in his particular area / district. This may be difficult to define with absolute certainty. An Italian agent`s liability for damages is subject to a 10 years overall period of limitation.
- Italian agents in the courts.
Keeping in mind that under Italian law ruling of the courts are almost never a binding precedent, but only persuasive authority, it may be useful to consider recent court decision that have established the Mediatore`s line of duty to his clients:
- “ …The property is free of charges and prejudicial entries…” – The Italian Supreme Court has stated that a Mediatore is not under a duty to carry our any property searches, nor to check the legal title of a property. So, whatever the consequences, an Italian agent may not be liable…
- “.. The property is registered in a particular class at the local land registry and is entitled to tax rebates ….” – The Italian Supreme Court ruled that, without specific, express contractual commitments, a Mediatore is not under a duty to check the local land registry, nor to check whether the particular proposed acquisition will benefit from any tax rebates. A Mediatore is not a lawyer nor a tax consultant. So here, again, an Italian agent may walk away without liability, whatever the practical consequences for the buyer.
- Defects of the property – Here the Italian supreme Court has held that the Mediatore was liable, jointly with the vendor. Where the particular shortcomings reduce the value of a property and could have been discovered by using ordinary diligence a Mediatore will be liable for the losses caused. The buyer could then, also, withhold payment of commission … if still in time.
Finally, it should be noted that Italian agents are under a specific duty to register preliminary contracts (Registrazione del preliminare), where the parties to the contract fail to do so, and to pay Italian Registration Tax (Imposta di Registro) on the sales they have facilitated.
The above list is not complete.
There are several other issues, cautions and potential terms of business that should be negotiated in dealing with Italian estate agents, as the writer has found out from his own practical professional experience over the years.
The full list is almost never ending, like ever changing circumstances of life.
“Caveat emptor” : from latin – “buyers beware !”
Dr Claudio Del Giudice – Copyrights reserved – 15.01.2018