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International Property Sales – applicable law

The legal framework regulating international property sales is set by the Italian Law together with international treaties.

In international property sales, if there there is a conflict between Italian and International laws, Italian law will prevail. Art.51 of the Italian law n. 218 (31st of may 1995) states that a real estate conveyance will be regulated by the law of the place where the property is located.

International Property SalesThe Rome Convention binding all EU Member States (19th of June 1980) regulates the applicable law to contractual obligations.

The signatories to a contract may choose applicable law for the whole, or a part only, of a contract and select the court which will have jurisdiction over disputes. By mutual agreement they may change the law applicable to the contract at any time (the principle of freedom of choice).

If the parties have not made an explicit choice of applicable law, the contract will be governed by the law of the country with which it is most closely connected, according to the principle of the proper law (place of habitual residence or place of central administration of the party performing the contract, principal place of business or place of business responsible for performing the contract). However, specific rules apply in the following case:

  • where the contract concerns immovable property, the law applicable by default is that of the country in which the property is situated.

As a consequence, where the property is located in Italy and the sale involves individuals who are resident in Italy or in other States, the transaction will always be submitted to the legal requirements of the Italian law.

The jurisdiction of courts in civil and commercial matters

EC Regulation 44/2001 lays down rules governing the jurisdiction of the courts in civil and commercial matters. A judgment given in a Member State is to be recognised automatically, no special proceedings being necessary unless recognition is actually contested.

According to this Regulation, in the case of real estate transactions, the exclusive jurisdiction will belong to the Courts of the country where the property is located. Consequently, if the property is located in Italy, the exclusive jurisdiction will belong to the Italian Courts.

If you are uncertain as to what your situation is, it is advisable contacting an Italian lawyer specialized in property matters.

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