Real Estate Due Diligence and Real Estate Law
Preliminary Legal Analysis and Risk Management in Real Estate Transactions
The acquisition of real property rights requires a preliminary technical-legal verification phase aimed at identifying all risk factors connected to the transaction. Inadequate real estate due diligence is the main cause of post-acquisition disputes, often resulting in financial losses exceeding the original investment. The complexity of Italian real estate law, marked by a layering of urban planning regulations, landscape protection constraints, and tax provisions, mandates a rigorous methodological approach that eliminates any legal uncertainty.
Document Verification and Title Analysis
Verification of the Chain of Title
Reconstructing the legal history of the property is an indispensable prerequisite for assessing the reliability of the ownership title. A twenty-year review of property transfers must detect any defects in the conveyance chain that could affect the enforceability of the acquired right. The analysis of land registry records requires specific expertise in interpreting registrations, inscriptions, and annotations, which may reveal the existence of real rights of guarantee, easements, building restrictions, or limitations on disposal rights.
Verification of the property’s cadastral identity is central to assessing the correspondence between the factual and legal status. Cadastral discrepancies can invalidate conveyance acts and prevent registration in the land registry. Our practice includes systematic control of cadastral maps on file and verification of their conformity with the actual property condition, employing technical analysis tools that detect even minimal discrepancies.
Urban Planning and Building Compliance Check
Verification of the property’s urban planning compliance requires integrated analysis of administrative documentation and applicable planning regulations. The review extends to original permits, any construction-phase variations, and certificates of testing or habitability issued by the competent authority. The presence of even minor unauthorized constructions may render the transfer deed ineffective and impede mortgage financing.
Property compatibility with current urban planning instruments must be verified by analyzing municipal master plans, regional landscape plans, and sector-specific regulations that might impose usage or transformation restrictions. Our experience managing complex urban planning cases enables early identification of critical issues and formulation of regularization strategies minimizing risks for the purchaser.
Legal Restrictions and Limitations
Landscape and Environmental Constraints
Verification of landscape restrictions imposed by the Cultural and Landscape Heritage Code requires particular attention in Sardinia’s territory, known for a high density of protected areas. Constraints under Article 136 of the Urbani Code concerning properties of significant public interest, and those under Article 142 concerning legally protected areas, impose substantial limitations on property transformation and require specific authorizations for any construction work.
The 300-meter coastal zone is subject to a statutory landscape restriction, although its precise delimitation can raise interpretative uncertainties requiring technical verification. Our consultancy includes analysis of official cartography and, if necessary, activation of verification procedures with competent authorities to clarify delimitation doubts.
Easements and Real Rights of Use
Identification of easements encumbering the property requires cross-checking cadastral documents, land registry records, and actual conditions. Non-registered easements may still produce legal effects if established by prescription or through the owner’s intended use. Verification also includes easements for power lines, aqueducts, gas pipelines, which may not appear in cadastral documentation but significantly limit property use.
Constitution of real rights of use on investment properties requires specific assessment of compatibility with the operation’s purposes and the duration of encumbrances. Usufruct, right of use, and habitation may substantially restrict availability and impact economic valuation. Our expertise in managing complex real rights enables us to structure negotiated solutions that protect investor interests without jeopardizing the transaction.
Tax and Fiscal Analysis
Taxes on Real Estate Transfers
Correct tax qualification of the real estate transaction determines the application of the most favorable tax regime and prevents disputes with the Revenue Agency. Registration tax, VAT, mortgage, and cadastral taxes have differentiated regimes depending on the buyer’s subjective status, the property’s use, and transaction characteristics. Verification of the requirements for tax benefits necessitates specific documentary review and assessment of compatibility with EU state aid regulations.
Purchases from construction companies or VAT-registered sellers are subject to VAT with differentiated rates depending on cadastral category and intended use. Sales of building land are always subject to VAT, while sales of buildings may be subject to registration tax or VAT depending on options exercised by the seller. Our consultancy includes analysis of the seller’s tax documentation and verification of the regularity of exercised VAT options.
Tax Compliance and Reporting Obligations
Fiscal management of real estate investments requires specific reporting obligations that vary according to the investor’s status and property use. Properties owned by non-business individuals contribute to overall income as real estate income, while those held by companies contribute to business income. Property rentals may benefit from tax regimes that require specific elections and compliance.
Managing relations with the Revenue Agency demands particular attention to documentation and record retention supporting the deductibility of expenses incurred. Tax assessments on property values may be challenged through dispute procedures requiring specific expertise in property valuation and sector regulations interpretation.
Management of Real Estate Litigation
Petitory and Possessory Actions
Protection of real property rights involves differentiated procedural tools requiring strategic assessment of factual and legal circumstances. The action for recovery of possession under Article 948 of the Civil Code protects the owner against unlawful possession but requires rigorous proof of ownership and illegitimacy of possession. Possessory actions protect qualified factual situations and may be exercised even by non-owners who demonstrate qualified possession.
Managing complex real estate disputes requires expertise in using the most suitable procedural instruments for the controversy’s characteristics. Our experience with actions for adverse possession, recovery, and denial enables us to design effective litigation strategies that maximize chances of success and minimize litigation costs.