Lawyer for Italian property purchase

Question: Do I need a lawyer for my Italian property purchase?

Answer: Although people are not required by law to appoint a lawyer for an Italian property purchase, international buyers can experience a much smoother, more efficient and safer experience when they are assisted by an Italian lawyer.

For an international transaction regarding Italian real estate, people look for a lawyer with a solid reputation and a significant track record of cases in international real estate, estate planning and tax matters.

However, often the first thing foreign buyers who do not speak Italian focus their research on is finding Italian lawyers who speak English fluently.

Indeed, if your Italian lawyer speaks English, not only will your communication be faster and more efficient, but you will also avoid the risk of important points being lost in translation.

While this is important for communication, it’s essential for legal matters.

For example, certain Italian legal terms are often translated into English terms that have different meanings and different legal consequences. Let’s look at the relatively simple English word “deposit”.

This is often used in Italian property transactions to refer to the amount of money a buyer pays to secure the purchase. In particular, it is used to translate the Italian words “caparra” or “acconto”. In some other cases it is also used to translate the similar Italian word “deposito”.

The choice of the correct Italian term is extremely important. This is specially true if something goes wrong and one of the parties, after the deposit payment, is in breach of contract. Here are some examples that show the different terms that  “deposit” actually refers to in Italian:

1. When “deposit” is used to translate “Caparra Confirmatoria”: If one party is in breach of contract, the other party can claim compensation (in an amount equal to the deposit), without proof of having suffered any actual loss. For example, if the buyer is in breach of contract, the seller can retain the deposit entirely. If the seller is in breach of contract, the buyer can claim the deposit back in addition to a compensation equal to the deposit amount. However, if the documented losses are higher than the deposit amount, the fulfilling party can opt to claim full compensation, even if it exceeds the deposit amount.
2. When “deposit” is used to translate “Acconto”: The deposit qualifies as an advance of the purchase price. To claim compensation, the fulfilling party must provide proof of the loss suffered and the direct connection to the breach of contract. For example, if the buyer is in breach of contract, the seller can retain the deposit only with respect to the amount of documented loss. If the seller is in breach of contract, the buyer can claim back the deposit  in addition to compensation of documented loss. Additionally, in either case, if the documented losses are higher than the deposit amount, the party in breach of contract is fully liable for the entire loss amount.
3. When “deposit” is used to translate “Deposito”: Typically, this is an improper translation as deposit is a “false friend” and being similar is mistakenly chosen to translate deposit. The Italian word “deposito” is correctly used when the transfer of money is done without transfer of possession. For example, you can transfer funds to someone as a fiduciary deposit under the agreement that you will provide the recipient with further instructions as to what to do with the funds.

As you can see, these three translations all relate to a money transfer, however, each has a very different legal meaning and implication.

Whatever Italian legal document you are signing, make sure you work with an English-speaking Italian lawyer who can advise you about these and other Italian language nuances.

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