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The preliminary contract (“contratto preliminare” also called a “compromesso” - link to guide)is a true contract that obligates both parties to sign the final contract.
The preliminary contract stipulates the main elements of the transaction such as the sale price and the identity of the property in question, its address and a detailed description (floors, rooms, etc.) with data from the Land Registry and the date of the final contract. It should also define all mutual obligations to be fulfilled before the handover of the property. In the case of sale of properties under construction, the law stipulates special rules for the preparation of the preliminary contract. It is not mandatory for the preliminary contract to be drawn up by a notary public, but it is nevertheless useful to have a notary clarify what the obligations are that arise from it.
In the case of:
- substantial advance payments,
- a long time between the preliminary and final contracts
- a seller at risk of insolvency,
in order to ensure maximum protection for the prospective purchaser it is important that the preliminary contract be drawn up by the notary using an authenticated private or public deed, so that it is transcribed in the Land Registry. In all other cases, the need for transcription can be evaluated with the assistance of a notary.
Transcription serves to reserve the purchase of the property. It's no longer just a private agreement between buyer and seller, it has become legally binding towards anyone (technically it is "enforceable against third parties") and the seller, as a result, cannot sell the property to someone else or grant a mortgage over the property or create a passive servitude or grant any other prejudicial right over the property. Any creditors of the seller will not be able to register a covenant on the property promised for sale, or seize it. From the moment of transcription of the preliminary contract, the property is "reserved" to the prospective purchaser, and any transcription or registration will not affect that.
At the time of registration of the preliminary contract the following taxes must be paid; they will be recovered at the time the final contract is signed:
- 0.5% on the deposit
- 3% of down payments against the sale price.