Italian legislation for the protections of purchasers of real properties to be constructed

IRC-BAU ITALIA, with a view to providing an efficient and transparent service, is keen to report the following text summarizing the law 122/2005 to protect buyers.

PROVISIONS FOR THE PROTECTION OF PROPERTY RIGHTS OF PURCHASERS OF REAL PROPERTIES TO BE CONSTRUCTED

Italian law number 122/ 2005 (protection for buyers of on-plan buildings) disposes warranties for consumers purchasing off-plan buildings by professional construction companies.

 

Due to law 122/2005, the constructor is obliged to :

  • At the subscription of the selling preliminary contract the seller has to provide a surety bond emitted by a Bank or an Insurance Company, equal to the sum the buyer is giving before final contract, otherwise the preliminary contract is unlawful and void.
  • In practice the surety bond guarantees the money paid by the buyer as a deposit, in fact the surety bond could be called-in in case the constructor falls in an economic crisis.

At the final deed the constructor has to give to the customer a 10 years insurance policy that covers the eventual damages caused by buildings defects, otherwise the buyer could raise a claim in a court and the contract will be invalidated.
The predicted surety bond could be enforce as well in case the constructor doesn’t provide the insurance policy to the Notary for the deed.

 

In practice the surety bond guarantees the money paid by the buyer  as a deposit, in fact the surety bond could be called-in in case the constructor falls in an economic crisis.

At the final deed the constructor has to give to the customer a 10 years  insurance policy that covers the eventual damages caused by buildings defects, otherwise the buyer could raise a claim in a court and the contract will  be invalidated.

The predicted surety bond could be enforce as well in case the constructor doesn’t  provide the insurance policy to the Notary for the deed.

Both the surety bond and the insurance policy must be compliant with the standard fixed by the Decree  to be emitted  by Justice and Development Italian Ministries within 16th of  March 2019 (as per Law 122/2005 article 3 and 4).

In the end the pillars of  Italian  law  about   on-plan building purchasing are two:

Protection of the customer from losing the payments done during building construction.

Protection of the customer against the damages and subsequent expenses connected to defects of the building.