Question: What title checks does an Italian real estate agent do? And what if the realtor does not disclose to the buyer the existence of a lien?
Answer: The Italian Supreme Court has affirmed that, if a buyer and a seller sign a purchase offer with the assistance of a licensed real estate agent, the latter is liable for title issues that existed before the buyer signed the purchase offer and which the agent would have been able to learn about had he/she adopted normal due diligence standards.
For example, a real estate agent can (and should) easily check the title to make sure there are not any liens, or ownership issues, etc.
If the real estate agent finds any title issues, he/she has a professional obligation to disclose them to the buyer before the purchase offer is signed.
Although the above might sound obvious, unfortunately it is not the norm.
In fact, often real estate agents do not do any title search and just add the following text in their purchase offer template: “the seller declares that he/she is the full owner of the property and that there is no lien or other prejudicial record against the title”.
According to Italian case law, such term is not sufficient to successfully shield the real estate agent from damage compensation claims from a buyer who placed a purchase offer for a property that actually presented prejudicial record or other easily detectable title circumstances that, had they been known by the buyer before singing the purchase offer, would have altered his/her decision process. And the real estate agent must refund any commission paid by the buyer.
However, suing a real estate agent to seek compensation and commission refund might be very expensive and might take years to get a final judgement in Court.
Therefore, before signing a purchase offer and/or releasing any deposit funds, it is strongly advisable to do a thorough due diligence at least on the following aspects:
- Lack of liens and other prejudicial records;
- 20+ year recorded ownership;
- Lack of transfers by inheritance or gift deed;
- Seller’s solvency and lack of involvement in bankrupt companies.
However, for a more thorough approach, have an independent legal advisor with experience in international transactions review your specific case circumstances and the title and provide you with personalized advice about possible options and a suggested course of action.
Tab 2 content.
Book a Consultation
*Full refund for cancellations up to 1 hour prior to meeting time.
Contact us
I would like:
• Legal assistance – I am considering paying for legal advice/assistance
• General information – I am not interested in paid legal services
General information
Please find general information on our website using the search field at the top right corner of any page or by using any of the top dropdown menus to see information by subject.
• To share my resume
Send us your resume
If you are fluent in Italian and have an Italian degree, please check available positions in the Italian version of this page
• An interview – I am a journalist, author or content creator
• To share information about my business or services
• To report a website issue
• To leave a comment or suggestion – I am not interested in paid legal services