Italy has recently introduced a new rule for the real estate transactions: today, funds for the completion of purchase of Italian property could be held in a escrow account by the Notary in charge for the transaction.
On the other hand it is worth to precise there is no obligation to follow this prescription, as it is more about a specific buyer/third part request.
Deposits connected with a purchase proposals and preliminary agreements are not part of this new law.
This law applies for those ongoing property transactions started from the 29th August 2017.
These bonded fund will not produce any revenue for none of the parties involved in the transaction; Notary use to charge a small fee for this service, which is typically around 200€.
How it works?
The notary will hold funds until the deed of the sale has been filed/registered (30 days since the signature) and /or any burdens are still present on the title deed.
Technically the payments (bank transfer or the bank check) shall be issued in the name of the Notary.
Once the title registration is done, the transaction is completed successfully; This provides protection to the buyer in the period between signing the deed of sale and its registration.
The Notary’s duties:
– Must have a bonded client account (registered according with the Italian Law 124/2017) where the notary can receive funds from customers for the payment of property real estate
– Has no right to any interest eventually produced by the bonded client account
– Can use funds only for the payment of the designated property
This type of account benefits of a specific legal protection, so no creditors or other kind of legal issues can attack the funds.
It is necessary to include in the Deed of Sale the fact that the payments will be performed through the Notary escrow account; Payments details and the escrow account have to be exactly identified including all the related banking payment instructions.
Written by Avv. Alessandro Clemente – The Italian Property Lawyer