The so-called "Competition Bill" came into force on 29 August 2017. This law created a general turmoil in the real estate sector, as it put into effect a 2013 rule by many called "price deposit" by the notary.
Don't want to read the whole article? Get the video summary! 😉
What is the deposit of the price by the notary?
Paragraph 142 of the law of 4/8/17 n 124 sanctioned changes to the law of 27/12/13 n 147 which introduced a new rule to be applied in case of real estate sale.
The law thus amended paragraph 63 (Article 1 of Law 147/2013):
The notary or other public official is required to pay into a specific dedicated current account:
c) the entire price or consideration, or the balance thereof, if determined in cash, in addition to the sums intended to extinguish unpaid burdens or expenses or other charges due upon receipt or authentication of deeds of transfer of the ownership or transfer, establishment or extinction of other real rights over real estate or companies, if requested to do so by at least one of the parties and in accordance with the assignment expressly conferred; ….
Translated into the language of the people:
At the time of the notarial deed, you can ensure (by appointing the notary in time) that the balance paid for the purchase of the house - the difference between the price of the house minus the deposit or the advances you have already paid - can be deposited on a current account in the name of the notary, and not delivered directly to the seller.
What is the price deposit from the notary for?
For those who deal with real estate it is a well-known thing, but for those who are approaching the purchase of their first home for the first time, what I will write in the next lines may not be taken for granted.
Basically the role of the notary is to certify the veracity of the declarations of the parties and the conformity of the transfer of the asset from the seller to the buyer. When you make the deed once you have paid the due and signed the deed, the house is "legally" yours. In reality, even if the deed is "public", the only parties to know of the sale are only the parties involved. To ensure that anyone can ascertain that you are the new owner of the house, the notary must perform another fundamental operation:
The transcription of the deed to the conservatory of real estate registers.
A national register, which allows anyone to verify the properties on the Italian territory (with the exception of Trentino and Friuli Venezia Giulia). This operation guarantees the famous "opposability to third parties" or, once the deed of sale has been transcribed, no one will be able to claim rights on the property, and everyone will be able to know that the house is yours.
Where is the catch?
The transcription operation is not done immediately by the notary. Sometimes (depending on the speed of the public official you are contacting) it can take up to 30 days (maximum deadline for tax compliance) between the date of the deed and the registration in the conservatory. Furthermore, once the sale has been "filed", the conservatory can take up to 11 days to ensure that the transcription is visible to all.
In this limbo the house is still "formally" registered to the seller.
Why has the notary's price deposit been introduced?
Usually, the day before the parties sign the deed, the notary makes the appropriate checks in the conservatory to ascertain that there are no privileges transcribed on the property that could harm the property right to be transferred (e.g. mortgages of creditors, injunctive decrees , causes etc … etc ..). The objective limit of this inspection is that some transcripts (for example the injunctions issued by the judge) once issued by the competent body take several days to be "visible" with a notary's registration.
What does this mean?
If you have to make the deed on October 20 and there is a privilege established on the 18, or 19, the notary will not see the transcription of that deed (because it will be visible on the 22 or 23 for example), you pay the house, you make your own moving beautiful beautiful and …. zak !! you find a mortgage on the property in the name of the seller.
Obviously I don't want to scare you, the case mentioned is an extreme possibility, but it can happen. And trust me: if I tell you it is because it happened.
Returning to us, the subsequent amendment rewrote Article 66 of which I quote the excerpt of our interest:
… In the cases provided for by letter c) of paragraph 63, register and publicize the deed in accordance with current legislation, having verified the absence of further prejudicial burdens and formalities with respect to those existing at the date of the deed or by this resulting, the notary or other public official shall immediately arrange for the release of the amounts deposited in favor of the entitled parties. If in the deed the parties have provided that the price or consideration is paid only after the occurrence of a certain event or the fulfillment of a certain service, the notary or other public official releases the price or consideration deposited when the proof, resulting from a public deed or authenticated private deed, or according to the various probative methods agreed between the parties, that the event inferred in condition has occurred or that the service has been fulfilled.
This is the key point.
The notary does not pay the seller until the property is 100% transferred free of privileges and any transcription.
In short, the maximum guarantee.
The rule, however, is optional, for those who are not interested you continue to do everything as it has always been done ….. on trust! 😉