Hiring the service of a trustworthy Italian Solicitor providing independent legal advises is certainly the ideal decision to go through a stress free process and being sure to rely on the support of a professional making the purchaser very best interest.
Legal due diligence is the process of collecting, understanding and assessing all the relevant documents and information related to the property transaction; it confirms the right value of the property, highlights the potential risks involved into the transaction and so help setting the right buying strategy; it’d be surprising how determinant could be the result of the analysis when it comes to estimate the value of a property (besides its mere market price).
Ideally it should be committed before presenting any Offer or formally entering the negotiation (i.e. LoI); nevertheless it can be carried out also in a second phase, so immediately after the submission of the Proposal of Purchase.
The whole process itself involves a complete analysis of the documentation, and in particular includes the legal check of the title of ownership and its history making also sure there are no prejudicial inscriptions, debts of burdens against the property, the compliance with the city planning, environmental, urban and cadastral regulations. It happens by bringing together all possible data relating to the property and by crossing them amongst themselves; obviously it is about a “dynamic control” type, meaning your Lawyer has to ask for the integration of the evidences eventually missing and suggest the legal solution to each specific case.
It consists confirming about:
- the previous and actual ownership of the property, and in particular checking the eventual existence of any kind of restrictions against the property (burdens, debt, taxes, adverse registrations, mortgages, servitudes, ties, etc.)
- the status of the possession/detention of the property, and in particular carrying out the formal checks about the existence of lease agreements or the use of premises; the request is made at the Revenue Agency.
It mainly refers to the existence of the proper authorizations (i.e. building permit, certificate of habitability, building legalization, etc) confirming the legitimacy of the construction and the conformity to its proper use (Residential, Office, Retail, Industrial, agricultural, etc.) with the current urban/construction regulations; This part of the analysis is of crucial importance as the non compliance with these rules makes the property not saleable.
Cadastral Due Diligence consists checking the cadastral regularity of the property through land registry searches, cadastral plans and official graphic representations.
Structural/Installations/Security Due Diligence
In some case it is also required to check the real structural conditions of the property, its statistics and the level of security that the structure has.
Also it is important to get the certificate of compliance of the installations.
Due Diligence dealing with security instead is made up of the verification of documents referring to the security regulations (i.e. fire prevention certificate, anti-seismic conditions).
Energetic efficiency (APE)
The certificate of energetic efficiency (APE) is mandatory for each transaction; at the end of the Legal Due Diligence process the Consultant has to make sure that the property has one and if not present then it is necessary to make it; it is a document typically provided by the seller (and at his expenses) and has to be attached to the Deed of Sale.
Written by Avv. Alessandro Clemente – The Italian Property Lawyer