Buying a property with complicated history

07/28/2009 - 06:53

I am looking to buy a property in Tuscany (currently based in Milan) and have run into a series of complications that I'm hoping someone will have some experience of. Our avvocato seems horrified, but can't seem to explain the problems and implications in a way that I understand!1 - The property we are looking at is owned by a company that seems to qualify as a real estate company. It is over 300m2, so would normally be a de lusso property and attract 20% IVA. Except that the vendor seems to have cunningly divided it into 2 notional halves and registered the halves with the notaio (there are 2 separate schede catastali).No documents relating to the division appear to exist. The agent is proposing that we (husband and wife) buy the 2 halves separately, do a separazione dei beni and pay only 4% IVA. Is this likely to work? It seems extremely dodgy to me, given that the house is clearly in an undivided state.2 - Atti di provenienza for the 2 halves only goes back to the date the owner transferred them into the company he created (2007). The atto at that point contains a line stating the vendor has owned them for >20 years. Our lawyer is most agitated about this, because she thinks it increases the risk that someone else could have a claim to part/all of the property.I may be being un-Italian about this, but surely a notary checks the legal title is owned exclusively by the vendor before the rogito? Can anyone explain or point me to somewhere I can understand what the legal implications are? 3 - The property has been used to obtain financing for a variety of the owner's businesses, and as such has around 15 charges against it. Again, our lawyer thinks this is a disaster, especially as we need a mortgage on the property. But surely there is a process for collating all the charges registered against a property, and the notary has to verify they have been extinguished before he signs over title.If anyone has any advice or thoughts on any of the above points, I would be really grateful.

Topic

Buying

Location

Tuscany

Comment

even run... would think your lawyer might well be telling you to do this in any case... it seems that practically everything is wrong.. one serious concern say that the notary does their job and finds all loans attached to the property because of the facts you stated regarding the seeming willingness to bypass all regulations is that in between the final act and it being registered in your name the present owner could very well attach other loans to what is a property you have paid for but not legally registered to you... unlikely maybe.. has happened and basically from what you describe this property would be better suited to an Asta rather than a private sale... it seems to me that whichever agency is selling it is not reliable either as the suggestions being made are not for your good as regards tax avoidance... if indeed an agency is involved

Many thanks for your reply. I am trying hard to justify not walking away as we love the property, but its not easy. There is an agent involved, but they are close to the buyer and consequently I hesitate to trust them 100%.Your comments are not disimilar to our avvocato's re the ipoteche on the house. I just find it hard to comprehend that if a) the buyer represents that the property is to be transferred free of charges and b) the notary confirms that all know charges have been extinguished, that someone could come along afterwards, claim the property to cover unpaid loans and walk off leaving me with nothing. Can that really happen? And if so is any transaction safe?

maybe garda or charlotte oliver can explain more clearly... what happens is that when you sign the rogito the notary then has to register it...this can take weeks...generally not longer...and it that space of time the property is in what you might term as lmbo... its yours in the sense you paid money for it.... but the previous owner is still registered as such...which means someone dishonest could either sell the property quickly again... or what seems likely in your case ... get another loan... the other problem which easily becomes apparent is that an owner of a property could default say on payments of ICI, TV licence, enel or whatever .... basically anthing to do with a state entity and then that debt will be assigned to the owners property... if you have bought the place meantime the debt will then be attached to your property... i know not fair and in general unlikely ... but the problem is with your description of the facts in this sale it seems somewhat more likely than not...all i can say is that you need to trust your legal advice... who might not be saying all they know about the seller or agent involved... just trying to protect you without getting into trouble locally.... in that sense you are luckythe other point and one that i will often get taken to task on is that not all notaries are honest... and will sometimes be collaborating with either agencies or sellers in mis leading(at the very least ) buyers... we have a well renowned example here in abruzxzo where as many happy customers are reflected by as many not so happy when they find nothing much has been checked when they relied upon the fact that a notary was impartial... even more spoke english... lulling them even further... removing indeed one of the smaller safegurads a translator...who often because they are working for you as a client will spot anomalies and maybe just maybe act as an unofficial lawyer... and not accept blatant lies... after all they too have to sign the documents.... and being outside the circle wil sometimes be able to offrer independant advice....to put this in perspective... we would not take on a property to sell with these sorts of problems...just not worth it... and basically it would not conform to what any agency here would regard as acceptable standards as regards the legal paperwork... well not any... but you understand what i mean...however you like the place... i dont know everytyhing... and its obvious it must be something special... to even consider whats been proposed so get second opinions privately... suggest you PM either Garda or Charlotte Oliver...

I'd avoid the property like the plague - tax dodge, plus charges against it etc etc - run like h*ell

I would only go ahead if you have a notaio you trust implicitly.It seems to me that there is an attempt to defraud the tax office - not unusual in itself, but with serious consequences for you if they catch you.The lack of atti di provenienza is more worrying. It seems that he has this property in usucapione with an original title dating from 2007 - which lays you open to the possibility, even if remote, that someone will come along in the next 18 years and claim the property is theirs. As far as debts on the property - the only way you can protect yourself is to transcribe the compromesso - which costs about the same as the final act - and will then at least put you as No1 in the list - even if the seller promises to extinguish debt on the property in the compromesso, it doesnt mean that he will - unless you have a fab notaio who will trot along to the creditors office on the day of the act to pay off all the debts on the property. If he doestn you only have recourse through the legal system which will take years. As Adriatica says there is a limbo between the signing of the act and the registering, though I have all my client acts registered in 2 days - or in one day if there is a situation like yours - 2 weeks seems ridiculous to me - but again you need a good notaio who will send a functionary to register the act immediately. Any property like this with so many problems should be on the market for well, well below the market price as you are expected to take many risks with the purchase. Unless its a house you cant exist without, Id leave it well alone.

Many thanks to Adriatico and Ram for the information. It will be invaluable if we do eventually go ahead with the purchase. Though I have to say I'm a lot less convinced about it than I was yesterday. The idea of an irate lender, previous owner or tax official turning up on the doorstep to claim the property would keep us awake for years to come!You have been a great help.

Perhaps I should change my name to Victor Meldrew!Am I really to believe that when a house is sold in Italy the 'debts' stay with the house - and not with the previous owner who amassed the debts in the first place?You must be joking (actually that might have been John McEnroe!).Say the owner has so much debt that he HAS to sell the house to pay them off. Having now sold the house, can he walk away with the cash in his pocket secure in the knowledge that the new owner will have to pay his debts off for him?Because that's what the answers in this thread imply.

I think that's what McEnroe used to say !

Drat - I think you're right (but we MUST keep on thread)

WILL you behave yourself and try to contribute something other than facetious comments,mark my words young lady ,you are going to get eaten if you do not mend your ways

Debts in Italy are on the property not the person - and it is possible that a house is sold with debts even though the compromesso will state that the property must be sold free of debt. As the only recourse is through the courts, it means that some people are happy to sell a property with debt knowing it will take years before they are brought to book. Believe it!

Thank you Ram. I confess I am gobsmacked.

But isn't a debt is on the property in the UK too? If the Land Registry in the UK made a mistake and transferred a property without a deed of cancellation from a lender, it might well be the same result there. So the difference would seem to be that it's more common for notaries to make a mistake than the Land Registry!I guess that could mean either not picking up on all the outstanding charges, or that the time delay between a lender registering a charge and it appearing on a database of some sort is long enough that the property could be sold in the meantime.Hence Ram's tip about frogmarching the notary to register the deed of transfer, which I will bear firmly in mind.

Debts are treated differently in different parts of Europe, some on Assets (i.e House) some on possesions. Italy and France both have a clauses where debts can be reclaimed from an asset if lending/services were secured against it. TheUK I believe is softer on this and will persue through Banks and Courts only not agianst New Home Owners.

That's my understanding Gromit.I've certainly heard of people having problems with credit ratings because their address has a black mark against it due to the previous occupants however.

If we are all one in the European Union why don't we all start singing from the same hymn sheet and standardise all laws?I mean what's the point of having an EU if we are all going to retain our own legal anomolies?Yes every country should retain the right to it's own identity and form its own parliament but when it comes down to legal transactions such as buying houses and cars etc there should be a common understanding.Ah maybe one day!

"but when it comes down to legal transactions such as buying houses and cars etc there should be a common understanding". Like common house buying rules in England and Scotland?

Yes really! I am not saying we should all adopt the English way of doing things. Scotland has opted for the bid system although they also use fixed pricing. I believe the way we buy and sell houses in England and Wales is too stressful. You cannot be sure the house is yours until contracts have been exchanged and completion set. You could spend a small fortune on surveyor and legal fees only to have the vendor change their minds at the last moment. That can't be right!I would like to see a system where a price is legally agreed and should any of the parties default a penalty should be paid. This would hopefully make people think more carefully before entering into the agreement.

For a start, you'd have to get rid of that pesky Napoleonic code the continentals insist on using and get them all used to our far more antique Roman system

Sorry Conrad but the Scottish system is also flawed. Once you bid it is legally binding on the buyer and only binding on the seller if they accept your bid.In a boom market there can be several people chasing the same property - and I know of people who have paid for surveys -then bid and have lost the house - sometimes for an underbid of just £50.00 - which is just as stressful as gazumping IMHO.This has changed a bit and people will now sometimes accept a bid "subject to survey" but the house is only yours subject to "concluded missives" and no money changes hands until the "date of entry" - so people can pull out right up to the last minute and you would have to take them to court to get any money back - however in my experience this rarely happens. From Conrad's post:"I would like to see a system where a price is legally agreed and should any of the parties default a penalty should be paid. This would hopefully make people think more carefully before entering into the agreement".That is my understanding of the Italian System anyway - if you put down a deposit and signed the preliminary contract ,and then the vendor decided against selling to you, then the vendor has to give you double the deposit back in compensation - again you may have to take them to court.I think housebuying is a stressful situation in any country and in any language!Jinty

Thank you Jinty. I was not inferring that Scotland was a good model for a universal european system. I am an engineer and know little of current european laws but would be interested if anyone knows of any country be it within the EU or not that seems to have a fair and moral system. The start of this thread questions if an italian property retains it debts and it appears it does but surley that should never be allowed to happen. No more than should people anywhere end up out of pocket when someone without good cause pulls out of a legal process at the 11th hour.

Further to another thread about the length of time it takes to conclude the purchase "on the day" my vendor had his bank there and one of the cheques - had to go to the toilet

Sorry about that.. my son thought that would be amusing...Anyway, the vendors bank rep was there to collect the cheque for the outstanding mortgage on the property so I hope that there are no other outstanding debts on the property we have bought but even my basic understanding of Italian is that the vendor has commited to the fact that there are no other debts on the property. He did not however mention "rights of way" but that's another story...