Italy: Due Diligence In Real Estate: What It Is And What It Involves

Last Updated: 9 June 2017
Article by Calogero Boccadutri

The practice of Real Estate due diligence is becoming more and more widespread, during real estate acquisition negotiations, in order to verify that the acquisition is not hiding any unpleasant surprises before any offers are made.

To be sure of making a good deal it is always good not to buy blindly but rather to place your trust in professionals.

Real Estate Due Diligence is the complete survey of a property or real estate asset. It brings together all the knowledge and information that is useful for the buyer to know before proceeding with the purchase.

It contributes to speeding up the purchase time, gathering all the information useful for the transaction in advance.

Real Estate Due Diligence confers the right value to the property, makes a complete analysis of it from a construction, city planning or environmental point of view, the urban compliance removes any doubt about the existence or fewer obligations, of collateral and clarifies who the property is attributed to.

Real Estate Due Diligence happens by bringing together all possible data relating to the property and by crossing them amongst themselves.

You begin by studying the documentation; you proceed by requesting their missing integration, if necessary, and by carrying out technical surveys for verifying compliance between what is written down and the objective reality of the facts. Also in this case, if inconsistencies or losses have been verified, you should proceed by completing or correcting the thing that is not right.

Although by themselves, by dealing with data coming from different camps, for practice, Due Diligence can be divided based on the arguments that are examined.

Cadastral Due Diligence

Cadastral Due Diligence serves to check the cadastral regularity of the properties through land registry searches, cadastral plans and graphic representations.

The correct insertion of the building onto the map will be verified, the similarity between how much is represented in the plan and the real state, the similarity between what is shown in the registry with the documentation relating to the titleholder plus other basic information like the exact address, the floor number, the inside.

Administrative Due Diligence

Administrative Due Diligence consists in the ascertaining of the ownership of the property, in control of the eventual existence of burdens or taxes and in the verification of those that can be usage and enjoyment contracts. The office put in charge of the issuing of original acts is the Land Registry Office, while the examination of the regular census, of the potential registration of mortgages or of the presence of ties and servitude could be made at the Land and Construction Property Agency.

In order to verify the existence of lease agreements or the use of spaces, the request is made at the Registry Office.

Structural Due Diligence

In order to carry out a correct structural Due Diligence you need to compare the documentation present on the subject of security with the physical inspection of the site.
You need to verify the real structural conditions of the property, its statistics and the level of security that the structure has.

Due Diligence for Installations

For a correct Due Diligence for installations you need to understand that there is a compliance law for installations that can be found in the properties.

The electric usage is analysed, as well as air-conditioning and all other mechanical installations.

A visual analysis of the site must always correspond to the analysis of the planning documentation.

Due Diligence for Construction

The phase of urban/construction Due Diligence consists in verifying the compliance of properties with the current urban/construction regulations.

The certification of the urban destination will be analysed, complete conformity is verified in line with urban planning.

You need to state that there are no territorial ties (environment, monumental, infrastructure or landscape).

What is important is that the property is used correctly and that there are construction operations in the course of the year (authorisations, planning permission, habitability/compliance certificates, concessions...), which have been carried out in line with legal standards.

Due Diligence for Security

Due Diligence dealing with security is made up of the verification of documents to do with the carrying out of security regulations.

You will need to check that there is a fire prevention certificate, and that emergency plans have been agreed and that anti-seismic conditions exist.

Due Diligence for the environment

It has been verified that in the environment surrounding the property, or in the property itself, no sources of pollution or dangerous materials can be found.

Our team of lawyers specialising in international and corporate Real Estate (real estate law), can assist Italian or foreign investors during real estate acquisitions and disposals in Italy and abroad.

We provide the assistance of professionals that handle bringing together full and deep Due Diligence that protects against unforeseen events.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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