Buy Safer Your Home In Italy With the Escrow Services

Introduction

When engaging in property transactions in Italy, managing the deposit and balance payments correctly is crucial for safeguarding the interests of all parties involved. This article delves into the significance of utilizing an Italian Notary Public’s escrow account, emphasizing its role in providing the highest level of legal protection against potential creditors.

Understanding Escrow Deposit and Balance Payments

Buyers typically submit the deposit to signal their commitment to the purchase-sale contract, whereas sellers receive the balance upon closing unless otherwise agreed.

Key Contract Clauses and Considerations

When handling payments directly, it is essential to incorporate specific clauses in the purchase offer or reason for money transfer. These clauses should address nature, date, and method.

Payment Nature

In Italy, different deposit types offer varying legal protections. Opting for a “caparra confirmatoria” (confirmatory deposit) provides the highest level of security compared to an acconto (part payment or retainer). Seeking legal advice is crucial to comprehend the implications based on your specific situation.

Date and Method of Payment

Establishing a clear payment schedule and consequences for delays or non-payment is advisable. Payments in Italy are typically expected immediately or upon the creditor’s request.

Significance of an Italian Notary Public’s Escrow Account:

For maximum security, utilizing an escrow account provided by an Italian Notary Public is recommended. This account ensures exclusive full legal protection for held funds against potential creditors, offering a secure safe method that mitigates risks.

Seeking Expert Guidance

While some law firms may offer escrow account services, prioritizing the safety of funds is crucial. At Govoni, we advocate for our client’s best protection, suggesting the use of our Italian Notary Public’s escrow account for your transactions.

Opting for an Italian Notary Public’s escrow account provides the highest legal protection against potential creditors.

The Notary’s Role in Real Estate Transactions with Mortgages

When a buyer seeks a mortgage to purchase a property, the notary plays a crucial role in safeguarding all parties’ interests. Essentially, they become a custodian managing the monetary sums related to both the mortgage and the sale. Hence, it’s imperative to engage professionals capable of ensuring a secure and worry-free property purchase.

Payment Process

Each time either party requests depositing the price with the notary, the payment follows a specific procedure. The buyer executes the payment but doesn’t hand it over to the seller. Instead, it’s deposited into the notary’s dedicated bank account. Qualifying this payment as made to the notary is crucial and based on legal considerations.

In the case of a purchase with a mortgage, three parties are involved in the deposit: the seller, the buyer, and the bank. The notary receives the sale price, taxes, fees, advances, and fees on a dedicated bank account. After verifying the transaction’s regularity, the notary proceeds with the mortgage and sale deed signing and transcribes the deeds. Finally, the notary delivers the sums to the seller.

In both scenarios, the escrow ensures:

  • Proper execution of the mortgage and sale.
  • Protection of the rights of all involved parties.
  • Security in the payment of the sale price to the seller.

Advantages

  • Increased security for all parties involved.
  • Simplicity and speed in handling procedures.
  • Certainty of a successful transaction outcome.

Prejudicial Formalities and Deposit of Price: Key Points to Note

What are prejudicial formalities?

These are constraints that may burden a property, such as mortgages, liens, or seizures, potentially impairing the owner’s right to freely dispose of the asset.

What happens if there are prejudicial formalities in a preliminary sale?

The prospective buyer may fail to obtain ownership of the property.

To protect the prospective buyer, the notary can receive the amounts paid as a deposit or down payment and deposit them into the dedicated bank account. This shields the funds from any subsequent prejudicial formalities.

What if the preliminary agreement has been transcribed?

In this case, prejudicial formalities cannot be invoked against the prospective buyer.

Chain Sales: The Notary’s Role with escrow

Imagine wanting to buy a house but needing to sell yours first to finance the purchase. In such cases, a “chain sale” may be necessary: selling your house (first sale) and using the proceeds to buy the new house (second sale).

Our professionals can handle both sales securely and transparently, protecting everyone’s rights.

Here’s how it works

First sale

  • The notary receives the sale price from the first buyer.
  • They verify there are no prejudicial formalities on the property.
  • If everything checks out, the notary holds the price in a dedicated bank account.
  • The sale is then transcribed into the public property register.
  • If the transcription is successful, the notary releases the price to the first seller.

Second sale

  • The notary receives the sale price from the second buyer.
  • They verify that the first seller owns the property.
  • They also check for any prejudicial formalities.
  • If all verifications pass, the notary retains the price in the same dedicated bank account as the first sale.
  • The second sale is transcribed in the public property register.
  • If both sales are successfully transcribed, the notary releases the price to the second seller (who is the first buyer).

This ensures:

  • The first seller receives the price of their house only after the sale is transcribed, with no prejudicial formalities.
  • The second buyer obtains ownership of the house only after the first seller receives the price, and their sale is transcribed.

If you are buying a property in Sardinia or somewhere else in Italy or have any inquiries about payment methods, feel free to reach out.