"Preliminary Contracts" in Italian Property Transfers May Now Be Filed With the Italian Land and Estate Registrar Law Decree no. 669/96, converted into law no. 30 of 28/02/97, has introduced an addended Art. 2645, called "2645-bis", of the Italian Civil Code. This new article provides the possibility of registering "preliminary contracts", that is the contracts by which the parties undertake to enter into a future final contract transferring the title in given real estate (or any other right therein), with the Italian Land and Estate Registry (Conservatoria del registro immobiliare). In the event that the preliminary contract is executed by way of a notarial deed, or that its signatures are authenticated, such registration is legally required, and performed by the intervening Notary Public.
The aim of the registration of the preliminary contract (which is effective for a maximum of three years) is to anticipate the legal effects of the registration of the final contract, which is to give the registering purchaser priority over any subsequent registrations (of purchase titles or other rights in rem or security interests, such as attachments, hypothecs, mortgages).
The latest reform has the essential goal of protecting the prospective (i.e., the executory) purchaser, who has been traditionally the weaker party in the real estate market, on the heals of a number of recent notorious insolvencies and frauds in the property market.
Furthermore, the prospective purchaser, having paid in full or in part the purchase price, has been granted a priority credit with respect to the real estate concerned (Art. 2775 bis of the Italian Civil Code) in the event of the bankruptcy of the promissory vendor (Art. 72 of the Italian Bankruptcy Law).
Lastly, an ad hoc provision was introduced (Art. 2825 bis of the Civil Code) limiting the liability of the purchaser arising from security interests in the property to the portion of the debt related to the portion of the property which is the subject of the preliminary contract.
Needless to say this rule introduces a negative element for the other creditors, such as the suppliers or the builder's financial backers, whenever they are not armed with adequate guarantees.
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.