3-4/2005 UINL - Notarius International

150 D. Ockl, Protection of the Purchaser of Immovables to be built in Italy Notarius International 3-4/2005
Another situation resulting in negative consequences
for the purchaser in the event of the vendor’s bankruptcy
may arise if the building collapses or defects manifest
themselves in the property. In such a case in regard to
the building contract, Article 1669 of the Civil Code provides
that if, during a period of ten years from the date of
completion, the construction collapses totally or in part as
a result of a defect in the ground or in the construction, or
presents a manifest danger of collapse or serious defects,
the contractor is liable to the purchaser or his successors
in title, provided that notice is given within one year of
discovery of the problem. The courts have extended the
scope of that legislation to others not mentioned expressly
in the provision of the Civil Code, declaring it applicable
to the vendor of the property whether he be an ordinary
builder or constructed the property under his own
direct management. 2 However, plainly such form of protection
is in fact inadequate in the event of the subsequent
bankruptcy of the vendor builder.
3. Registration of the preliminary contract
An initial form of protection of the purchaser was introduced
by Legislative decree No 699 of 31 December
1996, converted into Law No 30/1997. Amendments to
the Civil Code laid down an obligation to register in the
land registry preliminary contracts concerning real estate,
even if under construction or yet to be built, if such contracts
are drawn up in a public deed or in an authenticated
private document.
Registration confers priority: registration of the definitive
contract or of any other act entailing execution of
a preliminary contract or of a judgment for specific performance
of a preliminary contract, overrides registrations
entered against the transferor after registration of
the preliminary contract (Article 2645a, second indent of
the Civil Code).
Moreover, under Article 2775a of the Civil Code, where a
registered preliminary contract is not performed the
amounts standing to the credit of the intending purchaser under
the contract have special priority in regard to the property
forming the subject-matter of the preliminary contract.
None the less, that form of protection has proved to
be inadequate inasmuch as registration of preliminary
contracts is mandatory only in the case of contracts
drawn up as a public deed or in the case of an authenticated
private document. For a preliminary contract to be
valid mere written form is sufficient without any involvement
by a notary. Yet registration is not permissible
in the case of a private document which is not notarised.
In practice only a small proportion of preliminary contracts
are drawn up in a public deed or in an authenticated
private document. For reasons of cost the vast majority
of preliminary contracts are drawn up privately, and
are consequently not registered and do not enjoy the protection
resulting from registration.
4. The new legislation – scope
The problem of the protection of the purchaser of immovables
under construction remained unresolved and
had a strong social impact. 200,000 Italian families were
involved in around 9,000 bankruptcies of building companies
since 1995.
The new Legislative decree no 122 of 20 June 2005,
which entered into force on 21 July 2005, seeks to respond
to those protection requirements by introducing:
- an obligation to provide a guarantee in respect of sums
paid in advance,
- minimum mandatory content for the preliminary
contract,
- an obligation on the vendor to deliver to the purchaser
a policy against losses arising out of the building’s collapse,
- an obligation to cancel or subdiivide mortgages taken
out,
- a right of pre-emption in favour of the purchaser in
the event of compulsory execution in regard to the
property,
- amendments to the bankruptcy law,
- a solidarity fund for purchasers of immovables yet to
be built.
4.1 Requirements in regard to persons concerned
The requirements of the new legislation in regard to
persons concerned are as follows:
a) The vendor must be a builder, by which is meant
the undertaking or building cooperative which is promoting
the sale of or is selling an immovable yet to be built,
or has entered into any other contract, including a leasing
agreement, which has or may have the effect of providing
for the deferred assignment or transfer to a purchaser of
the property or of title to a property to be built, whether
it is to be built directly by the aforementioned entities or
construction is to be awarded to a contractor or in any
event carried out by third parties (Art. 1 (b) of the legislative
decree).
b) The purchaser must be a natural person. The legislation
does not therefore apply to companies or to collective
bodies of any other kind (Art. 1b of the legislative
decree). Moreover, initial commentators on the new legislation
question whether, by using the term ‘natural person’,
the legislature sought to refer to any natural person,
on a literal reading of the provision, or whether, in the
wake of recent legislative interventions in regard to consumer
protection, that term must be taken to mean a natural
person not acting in pursuance of entrepreneurial or
professional activity, which would follow from a narrow
interpretation of the provision.
4.2 Requirements in regard to subject-matter
The contract must concern immovables yet to be
built, that is to say those for which building pewrmission
has been sought, whether they are yet to be built or con-
2 Judgement of the Cassation Court: 20 March 1998, 2977, Foro
Italiano, 1998, 316; Judgement of the Cassation Court: 7 June 1994,
5514, Giur. Civ. 1994, voce Appalto, p. 54, Judgement of the
Cassation Court: 14 December 1993, 12304 in Foro Italiano, 1993,
voce Appalto, 62.