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ACQUISITION PROCESS:
KEY STAGES
• Foreign investors wishing to carry out real estate transactions
do not need any prior authorization.
Negotiations
• As a preliminary step, a non-disclosure agreement is
proposed by the seller/agents in order to allow access to the
property, information and documentation (not compulsory).
• The would-be purchaser issues a letter of intent which may be
indicative or binding (not compulsory).
• Discussions are usually pursued within the frame of a
preliminary agreement providing for an exclusivity period
during which the due diligence exercise is carried-out and at
the expiry of which the would-be purchaser is expected to
confirm its initial offer.
Preliminary contracts
• Preliminary contracts provides for the terms and conditions
of the sale whereas the final transfer remains subject to the
fulfillment of certain conditions.
Bilateral undertaking to Sale and Purchase Agreement
(compromesso di vendita)
• Is the reciprocal undertaking to sell and to purchase where
both parties are committed to transfer the property.
• The transfer remains subject only to the fulfillment of
condition precedents.
• It may be recorded in the public records to prevent the seller
to sell to any other party. Recording is mandatory in the off-
plan preliminary agreement used in the construction business.
• If breached by the vendor it may trigger a court decision with
a compulsory transfer of the asset or the payment of the
double of the deposit.
Option to buy (opzione di acquisto)
• Is the bilateral agreement or the unilateral declaration
granting one party the option to buy a real estate asset. It may
be formulated as option to a preliminary agreement or option
to a final transfer, according to the wording used.
Deed of sale
• Is the deed according to which the ownership of a property
is transferred from the seller to the buyer; it is necessarily
notarized and usually it is the fulfillment agreement of the
preliminary contract.
• There is no re-negotiation of the terms and conditions of the
sale which have been agreed at the stage of the preliminary
contracts.
• The sale shall be registered recorded in the public records
book (Conservatoria dei registri immobiliari).
• Warranties (i) for claims over the property aiming to evict the
purchaser and (ii) for hidden defects, are the two mandatory
warranties which by law are incumbent upon the seller of a
real property.
Off-plan sales (vendita di cosa futura)
• Used for selling buildings that have not yet been constructed.
• The seller is committed to erect the property in accordance
with agreed specifications, price and deadline; the seller
provides the purchaser with completion and defects
guarantees.
• The purchaser pays the price gradually along the construction
steps until completion.
• At the date of the deed of sale, the transfer of ownership
automatically applies to the land and existing construction.
• The seller remains liable for construction defects under ten-
year legal constructors’ warranties for structural defects.
• Rarely used because of the risk connected with the automatic
transfer (i.e. in the event of bankruptcy of one party).
COMMERCIAL LEASES
• Leases of buildings used for commercial purposes are covered
by specific provisions codified in the Civil Code.
• Certain provisions of the commercial leases may be freely
agreed by the parties, such as:
–– the initial rent (which can not be variable);
–– the service charges.
• However, commercial leases must comply with some
mandatory rules.
Duration: initial term of the lease
• May not be less than 6 + 6 years: the parties may agree on a
longer term.
• Leases longer that 30 years must be recorded in the public
records book (Conservatoria dei registri immobiliari).
• Unless otherwise provided, the lessee may terminate the
lease on expiry of each six-year period.
• The lessor may not terminate the lease at the expiring of the
first six year period unless needed for restructuring of the
building.
• At any time the lessee may terminate the lease for grave
motivations (gravi motivi). This clause may not be mitigated
or voided in the lease contract. The motivations (i.e.
liquidation of the company, closing of the regional office,
grave crisis in the market sector etc.) are evaluated by the
court if the termination is challenged.
• At any time the lessee has a pre-emption right to purchase
the premises, if the seller is going to sell. This does not apply
if the seller sales the whole building.
• At any termination the lessee has the right, if forced to leave
for termination of the contract and not for breach of payment,
to receive a compensation from the lessor equal to 18 months
of rent.
Lease of business branch (affitto di ramo d’azienda)
• To avoid the limitations of the Civil Code, the lease of
business is often used, specially in premises located in
shopping centres.
• The parties need to demonstrate which branch of business is
leased.
• In the shopping centres the general licence to open and
operate the centre helps to deem the single premise as branch
of one main business.
Transfer of business in the lease contract
• Principle of freedom of assignment of the business apply to
lease of business only. Right to sublease may be granted in
the lease agreement.
58 Investors Guide to Europe 2015