In Italy only an Italian Notary Public’s escrow account benefits from full and complete legal protection against possible creditors.
There are two main payments you are expected to make when buying a property in Italy,or that you will receive, if you are selling an Italian property; the deposit and the balance.
The deposit is usually paid upon purchase offer acceptance and it is aimed at confirming the parties’ intention to proceed with the purchase-sale contract. The balance is customarily paid upon closing, unless otherwise agreed.
The main contract clauses regarding the payment of the deposit and the balance
If you decide to manage the payments directly between yourself and the vendor, make sure that the purchase offer and/or the payment description expressly refers to the following aspects:
- nature of the payment (especially for the deposit):
- date of payment;
- method of payment;
The nature of the payment:
in Italy we have different kinds of deposits, with different legal effects and levels of protection for the parties involved in the transaction. The highest protection is given by a caparra confirmatoria (confirmatory deposit), as opposed to an acconto (part payment, retainer).
Be sure to seek competent independent legal adviceon this aspect, depending on your particular situation and case scenario.
Date of payment:
If the parties do not agree anything specific, as per Italian civil code, payments are usually meant to be made immediately, or upon creditor’s request.
Depending on your needs, case scenario and expectations, it could be useful to provide a different payment schedule and/or agree on possible effects in case of delayed or lack of payment.
Method of payment:
If you have already taken all advisable precautions on the above, be sure you handle this aspect properly too. Generally speaking, the safest way to make/receive a payment, is a certified check (banker’s draft). Should one or more of the parties not have a bank account in the same country, cashing a foreign certified check could be complex and time consuming.
If this is the case, the best option for the parties to a transaction may be to use an escrow account service, provided in accordance with the law by an Italian Notary Public. Bear in mind that if asked by one or both parties, to proceed with the payment through a Notary Public’s escrow account, neither the Notary Public, nor other party can legitimately refuse. The Notary can, however, apply a reasonable additional fee for handling the money transfer.
Some law firms offer a so called, escrow account service too. The idea behind offering this service is to make payments easier for the parties to the transaction. However, this is not always the case and we do not offer this service to our clients. The reason De Tullio Law Firm chooses not to do this is simple: to protect our clients.
In Italy only a Notary Public benefits from full and complete protection against possible creditors on funds held in an escrow account. Other professionals’ bank accounts, even if they are using an account specifically nominated as an escrow account, cannot benefit from the same level of protection. Other professionals might offer you the use of their so-called, escrow account, but, in fact, the funds in that holding account, may be accessed by the professional’s creditors at any time.
Would you risk your money? Would you gamble? Certainly not!
Now you know: The safest way to proceed with a payment (especially upon property purchase closing) is by using the Italian Notary Public’s escrow account
If you are thinking of, or are in the process of buying a property in Italy and have a question, please get in touch for a FREE preliminary consultation.