19.09.2011 – Liability of incompetent / dishonest estate agents – In this case an Italian estate agent had eagerly pressurized a buyer to sign a preliminary contract for the purchase of a property, to pay the deposit and the agent`s full commission. In bringing pressure to bear on the buyer, the agent had also repeatedly said that, the relevant property was free from charges / mortgages, so there were no reasons to delay exchange of contracts and, of course, payment of the agent`s commission. The unfortunate buyer was deceived in exchanging contracts and paying commission, before carrying out usual searches.

A competent Italian lawyer would be able to detect this kind of problems, by carrying out the usual searches, before contracts are exchanged.

However, upon attending to the completion of the sale, the buyer was shocked to find out that the particular property was subject to a freezing order (Ipoteca Giudiziaria), for an unpaid debt of the vendor.

This unfortunate buyer immediately lodged a complaint for criminal fraud (Truffa) against the agent and commenced civil proceedings against both the agent and the vendor, claiming to be refunded both the price and the commission paid. Unfortunately, the vendor, was later declared bankrupt so the only possible, effective, recourse was against the estate agent.

The Italian Supreme Court ordered the Italian agent to refund to the buyer both the commission and the sale price, with interest and costs. It was held that when assisting a potential buyer Italian agents must show the average competence and diligence of a good professional, or otherwise risk both civil and criminal sanctions. It is not good enough simply to repeat what the vendor said / wrote without checking and then, if problems arise, disclaim liability.

Italian estate agent as professionals are under a duty to inform potential buyers of matters known to them, or which they could easily find out, if they do not know or are not sure they should not make representations.

Avv. Claudio Del Giudice
Copyrights reserved – 04.11.2011