This country-specific Q&A provides an overview to real estate laws and regulations that may occur in the Italy.
It will cover the most pertinent issues including ownership structures, restrictions, transfers, taxes and environmental contamination.
This Q&A is part of the global guide to Real Estate. For a full list of jurisdictional Q&As visit http://www.inhouselawyer.co.uk/index.php/practice-areas/real-estate
The Italian culture and business environment are highly legalistic in nature, and they are governed by a significant number of laws and regulations.
The real estate market in Italy, one of the asset classes historically preferred as an investment by the Italians, has not lost its attraction and, despite the recent changes in the Italian market and the cautious economic growth, it remains an appealing sector.
The good performance of the Italian real estate market emphasizes both the residential and non-residential assets, where foreign capitals confirm their dominant role and with major international players continuing to invest. Office and retail are the preferred asset allocation of investors, with Milan and Rome as primary target destinations.
Other increasingly significant trends include investment growth in the logistics sector (especially in Northern Italy) and in high quality real estate assets, as well as in redevelopment projects, with a great focus on town planning and environmental issues.
How is ownership of real estate proved?
By means of appointment of a notary public in order to carry out the appropriate Real Estate Register’s investigations and to provide an updated twenty-year notarial report (relazione notarile ventennale) attesting and fully clarifying the ownership title to the asset, according to the “continuity of filings” rule, i.e. an uninterrupted chain of ownership whereby all the previous acquisition deeds proved to have been filed properly.
Are there any restrictions on who can own real estate?
Foreign investors are not restricted from purchasing real estate assets subject to the principle of reciprocity and the bilateral agreements, if any.
What types of proprietary interests in real estate can be created?
The notion of “proprietary interest” finds no proper equivalent under Italian law. However, ownership rights in relation to real estate may differ as follows:
- (Absolute) ownership: It is the right to use and dispose of an asset in a full and exclusive manner. In practice, in relation to a real estate asset, such right may be limited by several circumstances (e.g. due to laws protecting assets having an artistic or cultural value, building laws, environmental laws, etc.), by means of a contractual agreement (e.g. a lease or bailment agreement) or by virtue of limited in rem rights (such as easements, usufruct, etc.)
- Joint ownership or co-ownership (comunione): Similar to the notion of “joint tenancy” under common law, it is the ownership right of a whole asset shared by two or more persons, each for an ideal quota of such asset. The creation and dissolution of the joint ownership, as well as the use and rights of the co-owners, is regulated by the Italian civil code.
- Condominium (condominio negli edifici): It is a special kind of joint ownership related to real estate, which is created when, in a certain building, independent units owned by several persons (each of such persons having an “absolute” ownership right on the respective units) coexist with common parts which are structurally and functionally connected with the complex of such independent units (e.g. the foundations of such building, lifts, stairs, water plants, etc.). In this case, such common parts are co-owned by all the owners of the independent units on the basis of quotas (so-called millesimi) determined on the basis of the value of each independent unit compared to the value of the whole building. The regulation of the rights and duties of the co-owners of the common parts (condomini), as well as the management of such common parts, is provided by a specific section of the Italian civil code and largely refers to a specific condominium regulation to be adopted pursuant to the law.
Is ownership of real estate and the buildings on it separate?
In principle, an entity owns both the land and the building(s) on it and, in particular, the owner of the land on which a building is to be erected will also acquire the ownership of such building, once erected, by operation of law.
This rule is derogated in case a superficies right (diritto di superficie) is granted to a person different from the owner of the related land, in relation to a building either already existing or to be built.The holder of a superficies right is entitled to use and dispose of the building as its sole owner, e.g. by granting rights to third parties or even by transferring the building (and the related superficies right).
A superficies right can be either temporary (i.e. having an expiry date) or perpetual. In case of temporary superficies rights, upon the expiration of the relevant term the right ceases, and, notably, all rights granted to third parties by the holder of the superficies right cease, and the ownership of the building is transferred to the owner of the land by operation of law.
What are common ownership structures for ownership of commercial real estate?
There are no specific limitations on ownership structures under Italian law. Commercial real estate assets are usually owned through SPVs—mainly Italian limited liability companies (società a responsabilità limitata)—or real estate investment funds. Decision on the investment structure is normally taken in light of existing ownership structure, tax efficiency, governance, operational needs or regulatory requirements.
What is the usual legal due diligence process that is undertaken when acquiring commercial real estate?
Legal due diligence is an essential step to be carried out by investors prior to the acquisition of a real estate asset. Usually, the legal due diligence exercise on the asset covers:
(ii) Encumbrances (e.g. easement rights, mortgages, deed of undertakings, other third parties’ rights)
(iii) Condominium regulations
(iv) Building permits / Town-planning / Certificates (e.g. fire prevention, fit-for-use, etc.)
(v) Trading and operational licenses (e.g. in case of retail assets or hotel)
(vi) (Business or property) lease agreements in force
What legal issues (if any) cannot be covered by usual legal due diligence?
Certification of title to an asset is issued by a notary public only (the Italian “certificate of title” is a 20-year notarial report, i.e. the relazione notarile ventennale, showing chain of title 20 years back in time); legal due diligence would typically elaborate on critical aspects flagged in the 20-year notarial report in terms of implications in the context of the transaction, recommendations, contractual protections, etc.
Moreover, legal due diligence does not cover the correspondence of the legal outcome with the factual situation of the relevant asset (e.g. the correspondence between building permits / cadastral data and factual status, the matching between scope of a license and factual situations / activities actually operated in the asset, etc.).
In light of the above, it is advisable for an investor to appoint—in addition to the lawyers in charge of the legal due diligence and a notary public in respect of the 20-year notarial report—also technical advisors (including environmental experts) to carry out technical due diligence; the outcome of such analysis is to be reviewed by the lawyers to identify legal implications of the issues flagged by the technical experts.
What is the usual process for transfer of commercial real estate?
From a general standpoint, the sale process of real estate property is structured and implemented through the following phases:
Phase 1: Execution by the parties of a preliminary and non-binding agreement (such as letter of intent, heads of terms, memorandum of understanding, non-binding offer) (Non-Binding Agreement), and commencement and execution by the prospect purchaser of a legal, tax technical and environmental due diligence exercise over the target real estate property (the Due Diligence). In more detail:
a) Non-Binding Agreement: basically, the parties agree upon (i) key terms of the acquisition transaction, on the basis of which they shall lead and carry out negations, and (ii) exclusivity obligations and periods over which the prospect purchaser may conduct and complete the Due Diligence and the parties commence, and should complete, negotiations with a view to finalize a binding sale and purchase agreement. Terms and conditions of Non-Binding Agreement have no binding nature (exception made for the exclusivity obligations) but oblige the parties just to negotiate on a good faith basis along the lines of and complying with the transaction key terms (the more the key terms are detailed and exploded under a Non-Binding Agreement, the more the parties may not stand back from them over negotiations). Therefore, a possible breach of terms and conditions (other than acclivity obligations) of a Non-Binding Agreement might lead to just a so-called “pre-contractual” liability of the defaulting party.
b) Due Diligence: From a legal perspective, the Due Diligence is mainly and generally focused on the following matters: (i) ownership title, (ii) encumbrances and third parties’ rights burdening the asset, (iii) restrictions to the transferability of the asset (such as, statutory pre-emption rights), (iv) occupancy / letting status of the asset, (v) zoning, town-planning and building-law matters, and (vi) pending and/or threatened litigations concerning the asset.
Phase 2: After execution of a Non-Binding Agreement, and in parallel with the Due Diligence, the parties start and progress negotiations with a view to enter into a binding sale and purchase agreement, which, generally, has preliminary nature (the PSPA). The PSPA provides for the parties’ obligation to complete the transfer of the target real estate property, through execution of the final sale and purchase agreement (so-called “closing”), at the terms and conditions set forth thereunder. The PSPA is negotiated by the parties taking into account the outcomes of Due Diligence and generally provides for, amongst other terms and conditions, (i) the seller’s representations and warranties and consequent indemnification obligations and (ii) possible conditions precedent upon occurrence of which the closing is conditional. It is quite common that at the execution of the PSPA (so-called “signing”), the purchaser is required to pay a portion of the purchase price as down payment or earnest money.
Phase 3: should the terms and conditions (including possible conditions precedent) of the PSPA be meet, the parties consummate the closing, through execution of a final sale and purchase agreement (also referred to as transfer deed) before a public notary. In this context, the ownership title to target asset is transferred from seller to the purchaser. Usually, the transfer deed does not supersede the PSPA and has no novative effect (“effetto novativo”) in relation to PSPA’s terms and conditions. The transfer deed shall be filed (“trascritto”) with the competent Real Estate Registries (“Conservatoria dei Registri Immobiliari”) for publicity formalities vis-à-vis third parties.
Is it common for commercial real estate transfers to be effected by way of share transfer as well as asset transfer?
Both “share deal” and “asset deal” structure are frequently used to complete real estate transactions. The main driver between such structures (other than the difference in the transferred asset that, in case of “share deal”, is the stake in the target company owning the real estate property), is the tax regime. The “share deal” structure is more convenient in terms of transfer taxes (it does not entail mortgage and cadastral taxes, which apply to the “asset deal” transfer), but it could be less efficient whenever the purchasing entity is an Italian real estate fund.
The “share deal” structure is generally implemented through the same phases summarized above, with the following specifications:
a) As to Phase 1, the Due Diligence generally includes accounting, financial and a more in-depth tax analysis. From a legal perspective, the Due Diligence is extended to corporate matters, ownership of target company, encumbrances, third parties’ rights burdening the stake-holdings in the target company, and limits to their transfer as well.
b) As to Phase 3, the transfer deed (in such a case, having as object the stake in the target company) shall not be filed with the Real Estate Registries, but shall be registered with the competent Companies’ Register.
On the sale of interests in land does the benefit of any occupational leases and income automatically transfer?
Upon transfer of a real estate property leased through a lease agreement (contratto di locazione), the purchaser automatically (and by operation of law) succeeds into the lease agreement in lieu of the seller, and the lease profits (i.e., rents) pertain to the purchaser as from the closing date.
What common rights, interests and burdens can be created or attach over real estate and how are these protected?
Two kinds of rights, interests and burdens may be imposed legally over real estate: public and private.
The public burdens on the asset may derive from an expropriation procedure, registered with the real estate registries (e.g. for the passage of cable pipes or electric or water network). Moreover, the asset may be burdened by means of a decree of the public authority, issued with reference to environmental protection or cultural goods and heritage protection. Finally, public easements on real estate may be set forth by the general masterplan or by means of a town planning agreement (e.g. easements of public use).
The public burdens are normally registered with the real estate registries and are included in the town planning destination use certificate (Certificato di Destinazione Urbanistica), issued with reference to the asset.
The private ones include a wide number of cases, which, with specific reference to real estate, can be exemplified as follows:
- Mortgages and other privileges: Mortgages are the most common form of security granted against real estate assets in Italy. The mortgage deed must be in notarial form and registered with the competent property register(s) (Conservatoria dei Registri Immobiliari). Being in rem rights, mortgages do not cease in the case of a transfer of the burdened property. Various other privileges also have statutory priority against other creditors’ claims. Special privileges over real estate assets prevail over mortgages.
- Limited in rem rights: In relation to real estate, the most relevant examples are—other than superficies rights, in relation to which please refer to question 5 above—easement rights and usufruct rights which, being in rem rights, can be enforced vis-à-vis third parties and do not cease in the event of a transfer of the relevant property.
Easement rights consist in a burden imposed on a (so-called “serving”) real estate for the benefit of a different (so-called “dominant”) real estate owned by a different person. Some examples are easements of way, easements of power line, easements of water line.
Usufruct rights give the holder the right to enjoy the relevant asset (owned by a different person), including its profits, with the obligation to respect its economic destination (i.e. in case it concerns land, the holder is not entitled to build on such land). Usufruct rights necessarily have a limited duration: If a shorter term is not provided, such duration is equal to the life of the holder, if a natural person, or to 30 years, if a legal entity.
Further examples of limited in rem rights are rights of use (diritto d’uso) and rights to inhabit a house (diritto di abitazione), which are in practice, rather uncommon, limited kinds of usufruct rights.
- Statutory pre-emption rights: The State may have a pre-emption right on real estate assets with historical/landscape value. Purchase deeds for those real estate assets must be firstly served on the relevant public authority and are conditional upon the exercise of the state’s pre-emption right.
Are split legal and beneficial ownership of real estate (i.e. trust structures) recognised
The placement of real estate properties in a trust is commonly used in Italy to better manage prospective hereditary issues as well as to protect assets from potential creditors, in full compliance with Italian laws.
Real estate trusts are also accustomed in our country to keep both the family's real estate assets gathered over time and for the benefit of minor children in the framework of judicial separation or divorce, with the purpose of protecting their own residence.
Following the approval of L. 112/2016 (so called “Legge sul dopo di noi”), aimed to promote the well-being, social inclusion and autonomy of people with severe disabilities, real estate trusts have also become a useful tool to guarantee residence to the weakest family members.
In real estate trusts the settlor can transfer to the trustee either the full ownership or the bare property of the immovable good, which can be given in usufruct, rented, sold or be burdened by the right of residence, according to the rules settled in the Trust Deed.
What are the main taxes associated with commercial real estate ownership and transfer of commercial real estate?
The main taxes associated with the ownership and the transfer of commercial real estate are the following:
Law 27 December 2013, no. 147 introduced a new real estate properties tax called “IUC” (imposta unica comunale) which is split into two real estate taxes described below.
The municipal tax (“Imposta municipale propria” so called “IMU”) applies on the possession of the real estate.
Companies and individuals are subject to IMU in respect of their real estate properties (buildings, land suitable for building, rural land) located in Italy. The taxable base is the income as entered into the cadastral register (“catasto”) on January 1 of the relevant year, increase of five percent and multiplied by a coefficient ranging from 55 to 160, depending on the cadastral classification of the property. The cadastral classifications depends on the nature of the real estate, and commercial real estate properties are classified under the “D” categories or C/1 category for the shops and C/2 category for the warehouse or A/10 category for the offices.
The general tax rate is 0.76 percent, but each municipality in which the real estate property is located may increase or decrease the rate by a coefficient. The municipalities may decrease the rate to 0.4 percent in the case of real estate assets held by companies or other entities liable for corporate income tax.
The companies and other entities subject to corporate income tax (IRES) can deduct the 20 percent of IMU from the taxable base. Conversely IMU cannot be deducted from taxable base for Regional tax on productive activities (IRAP).
The tax on the common indivisible services provided by the municipality (“tassa sui servizi indivisibili” so called “TASI”) applies to the real estate.
The taxable base of TASI is the same taxable base of IMU.
The general tax rate is 0.1 percent, but each municipality in which the real estate property is located may increase or decrease the rate by a coefficient. In case of lease agreement, the TASI is split between the landlord and the tenant in a percentage established by the municipalities.
In addition to the corporate income taxes applicable to the capital gains realized from the sale of the real estate and to the rental income deriving from the lease of the said real estate, the main transfer taxes associated to the transfer of real estate are VAT, Registration tax, Mortgage and Cadastral taxes. The application of the said transfer taxes depends on the features of the transaction (i.e. nature of real estate, nature of the seller or purchaser).
The sale of commercial real estate is subject to VAT if the seller is a construction company (VAT entity) and the sale takes place within the period of five years from the construction or the renovation works. The ordinary VAT rate is 22 percent (in certain cases the 10 percent VAT rate applies), and the taxable base is the sale-price.
The sale of commercial real estate is exempt from VAT, if the seller is a VAT entity, other than a construction company or a construction company if the sale takes place after five years from the completion of the construction or renovation works. However the seller has the faculty to opt for the application of VAT in the deed of sale, and VAT applies through the reverse charge mechanism.
The lease of commercial real estate is exempt from VAT, but the landlord has the faculty to opt for the application of VAT at the ordinary rate on the rent.
In case of sale of commercial real estate by a seller that is not a VAT person, the sale of commercial real estate is out of scope.
The Registration tax applies to the transfer of commercial real estate at the lump sum of €200. In case of sale of commercial real estate by a seller that is not a VAT person, the sale of commercial real estate is subject to a Registration tax at 9 percent rate on the sale-price or the higher fair market value of the real estate.
The Registration tax applies at the 1 percent rate to the lease agreement.
Mortgage and cadastral taxes
The Mortgage and Cadastral taxes respectively apply at 3 percent rate and 1 percent rate on the sale-price or the higher fair market value. However, if an Italian real investment fund is part of the transfer (as seller or purchaser), the Mortgage and Cadastral taxes apply at 1.5 percent rate and 0.5 percent.
In case of sale of commercial real estate by a seller which do not qualifies as a VAT person, the sale of commercial real estate is subject to Mortgage and Cadastral taxes at the lump sum of €50 for each tax.
What are common terms of commercial leases and are there regulatory controls on the terms of leases?
The commercial lease agreements are regulated, mainly, by Italian Law no. 392/1978 (the Tenancy Law) and, residually, by the Italian Civil Code.
The Tenancy Law’s provisions have mandatory nature, the parties may usually depart from them only whenever the departure is in favor of the tenant and, as consequence, any departure aimed at procuring an advantage to the landlord and at weakening the tenant’s rights set forth by the Tenancy Law may be challenged and declared null and void.
Effective November 12, 2014, the Italian commercial lease market underwent profound deregulation. As a result, parties can now depart from the provisions set out in the Tenancy Law in favor of either the landlord or the tenant, provided that the commercial lease agreement provides for an annual rent higher than €250,000.00, and the leased property has not been declared of historical interest by a local administrative order. As a result of this deregulation, although certain rules established by the Italian Civil Code still apply, the Italian commercial lease agreements market is deemed to be in line with international market standards.
Here below is a brief overview of the main provisions of the Tenancy Law, being noted that they may be departed from in favour of the landlord only whenever the requirements above are met:
a) Term: Minimum initial term is equal to six years (or nine years, for hotel-use property). At the expiry of the first period of six (or nine) years, the lease is automatically renewed for an additional period of six (or nine) years, and so on at the following expiries, unless one of the parties notifies the other party of its intention not to renew the contract at the relevant expiry date, by way of a 12-month prior notice. At the expiration of the first period of six (or nine) years, the landlord is entitled to prevent the automatic renewal of the lease agreement exclusively on the basis of reasons set forth by the Tenancy Law; this restriction does not apply at the expiration of the subsequent terms.
b) Rent and adjustment: The rent is freely negotiable by the parties. It is generally a fixed amount, but could be provided for a minimum guaranteed amount, plus a variable portion based on some economics (usually, the tenant’s revenues within the leased premises). On the contrary, the rent adjustment is disciplined by the Tenancy Law and is adjusted on a yearly basis according to ISTAT index variations. The adjustment can be equal to 100 percent of the variation ascertained by ISTAT index only in case of leases whose initial term is longer than the minimum term of six (or nine) years.
c) Security deposit: It is up to three monthly rent instalments. Should the parties agree upon the delivery by the tenant to the landlord of a (insurance/bank) guarantee, such collateral does not have to comply with the above three-month limit. The delivery of a guarantee may be provided either in lieu of or in addition to the payment by the tenant to the landlord of the security deposit.
d) Withdrawal: The landlord is not entitled to early withdrawal from the lease agreement (the landlord may just prevent the automatic renewal of the lease at the relevant expiry dates). The tenant is entitled to withdraw from the contract: (i) should a tenant’s withdrawal right be expressly set forth under the lease agreement, and/or (ii) upon occurrence of the so-called “serious reasons” (“gravi motivi”). In such latter case (“serious reasons”), the tenant is entitled to withdraw at any moment from the lease upon occurrence of the “serious reasons” and subject to a six-month prior notice. The Tenancy Law does not specify events or requirements falling in the “serious reasons” definition; these are supplemented by Italian case law which states that the “serious reasons” would occur in presence of events or circumstances that:
- Are unforeseeable and unexpected at the time of execution of the lease
- Are independent from tenant’s will
- Do not fall in the normal entrepreneurial risk of the tenant
- Cause the maintenance of the lease to be excessively burdensome for the tenant if compared to the benefits of the tenant arising from using the leased premises.
e) Sub-lease and assignment of contract: Under the Tenancy Law the tenant is entitled to sublease the leased promises or to assign the lease agreement whenever the sublease or assignment takes place in the context (and as item) of the assignment or lease of the tenant’s going concern.
In addition to the above, should the activity of the tenant involve dealings with the general public of users and consumers (contatti con il pubblico degli utenti e dei consumatori), such as in the case of retail activity, the following mandatory provisions of the Tenancy Law shall further apply:
f) Goodwill Loss: In case of lease termination by the landlord (landlord’s fault or landlord’s denial to the lease renewal), the tenant is entitled to a goodwill loss indemnity corresponding to 18 (or 21, for hotel-use property) times the amount of the monthly rent. The amount of the goodwill indemnity is doubled in the event the real estate unit is leased to another tenant carrying out thereunder the same activity of the previous one. The tenant is not entitled to any goodwill indemnity in case the lease termination depends on the tenant (tenant’s fault or withdrawal, etc.).
g) Pre-emption rights: Should the landlord intend to sell the leased premises (through “asset deal structure”) during the lease or to re-lease it at the expiration of the lease, the tenant is entitled to a pre-emption right, respectively, to purchase the leased premises or to lease it at the same terms and conditions offered by a third party prospect purchaser or tenant (as the case may be). The tenant loses its pre-emption right to purchase the leased premises, should the landlord transfer the whole real estate complex of which the premises is part; also, the tenant loses its pre-emption right over the new lease in the event of termination of the previous agreement because of its own breach or withdrawal. Based on the sale object and structure, the tenant’s pre-emption is excluded and should not apply (e.g., the landlord intends to transfer within the same transaction and to the same purchaser the entire building - so-called “en bloc” sale - and the tenant is leasing just a portion thereof).
How are use, planning and zoning restrictions on real estate regulated?
Pursuant to Italian Constitution, the competence for land management and planning belongs to the State for the provision of general principles and to the regions and municipalities for the set of detailed regulation.
Consequently, the main general acts ruling the use of land are:
a. The town planning law (legge urbanistica), approved by each region
b. The general masterplan (regolamento urbanistico), providing town planning rules applicable to the whole municipal territory and the building regulation (regolamento edilizio), providing rules for all building interventions carried out in the municipal territory, both approved by the municipalities
c. Detailed regional and/or municipal regulation regarding environment protection, noise zones, heritage and cultural goods protection, etc.
The restriction burdening specific portions of land can be set out by means of executive plans and relevant town planning agreements (i.e. plans jointly drafted by the Municipality and private subjects regarding the development of a precise plot of land).
Within the general masterplan the municipality provides the uses and building interventions allowed in each portion of the municipal territory. If the theoretically possible uses are indicated under the general masterplan, the concrete use of an asset is indicated by the building permit, issued for its establishment or for its change.
Who can be liable for environmental contamination on real estate?
The case of environmental contamination is subject to the “polluter pays” principle.
This means that the operator whose activity has caused an environmental damage will be liable for it and shall carry out the remediation.
Nevertheless, if the polluter does not remediate, and the Municipality carries out the remediation in its place, an in-rem burden (onere reale) may be imposed on the asset.
If the area is polluted, this could impede its development. Consequently, and even if he is not required to do so by the law, in addition the owner who has not caused the pollution can be interested in replacing the polluter and carrying out the remediation, in order to avoid the encumbrance of the asset with an in-rem burden (onere reale).
Is expropriation of real estate possible?
Expropriation of real estate is possible only (i) for public purpose, (ii) if the public purpose is validly declared and (iii) if an adequate indemnity is paid in compensation to the owner.
The expropriation procedure consists of:
- When approving the general masterplan, the public authority identifies the areas where works of public interest shall be realized and imposes an easement on such areas for a five-years period (apposizione del vincolo).
- The public authority declares the public interest of the works to be carried out on the eased area (dichiarazione di pubblica utilità dell’opera) (e.g. for infrastructure purposes or town planning purposes).
- The public authority defines the amount of the indemnity to be paid in compensation to the owner (determinazione dell’indennità di esproprio).
- Following the fulfillment of the payment of the indemnity, the authority adopts a decree of expropriation (decreto di esproprio).
The public authority shall notify all the interested parties at every stage of the procedure in order to allow them to take part in the procedure. If the works of public interest are not realized, the expropriated estate is returned to the owner.
Is it possible to create mortgages over real estate and how are these protected and enforced?
A mortgage is created by written notarial deed and must be registered with the competent local Land Registry to be perfected against third parties.
The secured creditor shall send the debtor a formal notice of default requesting the immediate (generally within 10 working days) payment of the outstanding debt encompassing interests and expenses. This notice is generally delivered through registered letter.
The foreclosure proceedings shall be preceded by the service of the title empowering to levy foreclosure.
The attachment of immovable assets is accomplished by serving the debtor with the pleading of attachment (atto di pignoramento), which should contain inter alia the indication of the attached assets and the rights over such assets, and transcribing the same pleading with the relevant land registries. Once the pleading of attachment (atto di pignoramento) is served upon the debtor, the following occurs:
(a) The judicial officer (or the distraining creditor) shall transcribe the pleading of attachment with the relevant land register and deposit a copy of the pleading with the court's clerk office.
(b) Within the following 10 days, the title empowering to levy foreclosure and the order of payment shall be filed with the clerk office.
(c) The attached assets are put under custody (also the debtor may be appointed custodian of the relevant asset).
(d) The foreclosure procedure formally begins.
Are there material costs associated with the creation of mortgages over real estate?
The creation of a mortgage over the real estate is subject to the Mortgage tax at the two percent rate.
With regard to the operations related to medium-long term credit facility agreements made by banks and other entities (e.g. undertakings for collective investments, insurance companies, etc.) it is possible to opt, in the same facility agreement, for the substitute tax at the ordinary rate of 0.25 percent on the amount of financing granted in each year or on the amount of funds given to open a credit line. The discipline of the substitute tax provides that the said operations related to medium-long term credit facility agreements (including the related guarantees) are exempt from the Mortgage tax, Registration tax, Cadastral tax, Stamp duties and Tax on governmental concession. In this case, the creation of a mortgage over the real estate would be exempt from mortgage tax at the two percent rate.
Is it possible to create a trust structure for mortgage security over real estate?
Unlike in other law systems in Europe, parallel debt structures are not admissible in Italy. Italian law security will have to be granted in favor of each secured creditor and not to a trustee or security agent. The role of the trustee is not recognized in Italy. A security agent is appointed to act as agent (mandatario con rappresentanza) of the beneficiaries under the transaction security documents governed by Italian law and shall not be considered as a trustee of the beneficiaries under such documents.
What is the main legislation relating to commercial real estate ownership?
The real estate ownership is regulated by the common provisions provided under the Italian Civil Code.