Protection of buyers of off-plan property under Italian law

Purchasing a property under construction (so-called immobili da costruire) in Italy entails the need to secure the capital paid before the building is put into use. Here, the Italian legislator provides for a special form of buyer protection, which is one of the strongest in Europe.

The obligation to provide a guarantee (Fideiussione)

The main instrument of protection is the imposition on the developer of an absolute obligation to provide the purchaser with a guarantee (surety) issued by a bank, an insurance company, or an authorised financial institution.

What does such a guarantee secure?

• All amounts paid: The guarantee protects every sum paid to the developer by way of advances or deposits up until the transfer of ownership of the property.
• The risk of bankruptcy: In the event of the developer’s crisis or an interruption of construction, the purchaser is assured of recovering the funds paid directly from the guarantor.
• Continuity of protection: The safeguard remains in force until the signing of the notarial deed (Rogito) and the establishment of a property right to use the unit.

Why is this safeguard crucial?

Under Italian law, the failure to provide this guarantee at the signing of the preliminary contract may result in the nullity of the contract itself. This is a mechanism intended to eliminate unfair practices and ensure full security for investors, particularly those from abroad, who are not always familiar with local market realities.

The ten-year insurance policy

It is worth remembering that, in addition to the financial guarantee, the developer is also obliged to provide an insurance policy (Polizza indennitaria decennale). It protects the purchaser against damage resulting from structural defects in the building for a period of 10 years from the completion of the works.