Buying or selling Italian residential properties frequently involves the assistance of local Italian estate agents. 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 realise that Italian estate agency 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 misleading and dangerous. It can lead unwitting British buyers into serious problems.
- Italian estate agents
Italian estate agents are called “Mediatore” or “Agente Immobiliare“.
“Mediatore” are defined as individuals or companies who introduce two or more parties to each other with a view to their doing business with each other, without the “Mediatore” being engaged, having legal representation or being otherwise formally connected to either of the parties.
Italian professional estate agents (Agente immobiliare), on the other hand, usually ask their clients to sign contracts stating their terms of business and commission. The law in Italy requires that such contract / terms of business should have previously been lodged at the local chamber of commerce, which implies some form of control over the agent`s terms of business.
If a Mediatore / Agente Immobiliare 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 the 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 estate agent 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 to become payable, even if there was no previous agreement between the parties, even if the word “commission” (Provvigioni) was never spoken. Such right to commission 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 “Mediatore“, informally, puts in touch a buyer and his seller. So, every time an “intermediary” is involved in an Italian property transaction, it is important to ascertain, beforehand whether a “Mediatore” or an “Agente immobiliare” is involved and the potential commission (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 or even, simple informal dealings and enquiries, may not always be fully appreciated when dealing with a foreign legal system, legal assistance is advisable, before any intermediary is contacted, any document signed and before any deposit is paid out.
In Italian law a “Mediatore” may have specific professional duties, depending on what may have been actually agreed with his 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” or an “Agente Immobiliare” is entitled to his commission, he does not need to wait for the completion of the sale.
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, but has no other detailed legal obligations.
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 and checked with independent professionals.
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 supplying information which he has not previously checked. If there is any doubt, the law requires Italian 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 care and attention required of a Mediatore is the average, normal one of professionals in his particular area / district. This may be difficult to define with absolute certainty. An Italian estate agent`s liability for damages is subject to a 10 year overall period of limitation.
2. Italian estate agents in the courts.
Keeping in mind that under Italian law rulings 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 out any property searches, nor to check the legal title of a property. So, whatever the consequences, a Mediatore 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, a Mediatore may walk away without liability, whatever the practical consequences for / predicament of the buyer.
- Defects of the property – Here the Italian Supreme Court has held that a Mediatore was liable, jointly with the vendor. Where the particular shortcomings reduce the value of a property and could have been easily 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.
It should be noted that Italian agents (Agente immobiliare) 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.
3. Why “Mediatore” is particularly insidious to foreign buyers / Italian property owners
Recent decisions of the Italian Supreme Court have clarified the role and entitlement of a “Mediatore” as opposed to a professional / corporate Italian estate agent (Agente immobiliare).
“Mediatore” is a form of estate agency, that may not be known outside Italy and poses a substantial threat to unwitting foreign buyers / vendors in Italy.
- A “Mediatore” (as opposed to an “Agente immobiliare“) may claim commission even where there was no written nor oral contract. A recent decision of the Italian Supreme Court stated that commission was due to a “Mediatore” simply on the basis of the fact that either the buyer or the vendor had accepted and benefited from this activity / assistance. Here, buyer and vendor had been put in touch with each other by the “Mediatore“, without prior formalities nor further engagements.
- A “Mediatore” only needs to put the parties to the property sale in touch with each other, in order to claim commission. A “Mediatore” does not need to participate nor assist with the subsequent negotiations and formalities leading to the completion of the Italian property sale.
- Unless otherwise agreed both the buyer and the vendor must pay commission to their “Mediatore“
- The subsequent intervention of another “Mediatore” or estate agent, normally will not displace the original “Mediatore” entitlement to his commission. Particular attention is required to avoid multiple commission claims.
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 many years.
The full list is almost never ending, like ever changing circumstances of life. The assistance of a legal adviser will almost certainly prove a good investment.
“Caveat emptor” : from latin – “Buyers beware !”
Dr Claudio Del Giudice – Copyrights reserved – 25.09.2018