It often happens that, after a prospective property has been inspected and chosen, substantial agreement is reached with the other party even if this is not yet formalized in written form.
It is advisable to contact a notary at this early stage before signing the preliminary contract (the so-called “compromesso”).
In the preliminary contract, both signatories undertake to stipulate the definitive sale contract by a certain date and on given conditions.
The preliminary agreement (even if concluded privately), gives rise to commitments that are legally valid and binding for the parties (and may be enforced by a court).
It is clear, then, that it is important to carry out all the above series of searches and checks (vendor's full right of ownership, property free of all encumbrances and covenants, land registry and town planning/regulatory compliance) before signing the so-called “compromesso” (agreement to purchase) which, as has been pointed out, is not only legally binding for the contracting parties even if written privately, but not least because in practice it means the future purchaser must at the same time pay a sum of money (often a huge one) as an advance on the final agreed price. By immediately putting the matter in the hands of a notary, then, the purchaser gets a complete legal picture of the situation, obtains essential information and advice for the success of the conveyance and avoids the risk of signing a preliminary contact (with the consequent commitments and payment of monies) that he might not have signed at all if he had known the complete situation or in any case would not have agreed to on those terms and conditions.
The notary's intervention brings his legal training to bear on both parties in an impartial manner (thus guaranteeing the interests of the vendor as well), advising as to the best solutions for the specific case, carrying out all the necessary searches and checks (these are in any case needed for the subsequent definitive contract), preparing the preliminary contract and in that way sometimes conciliating and arbitrating, where possible, the divergent positions of the parties (e.g. as to advances on the sale price, as to the fixing of the date for settlement – since he can evaluate, after reviewing the whole case, how much time is needed for the technical steps to arrive at settlement, as to the consignment of the keys, just to cite a few of the more delicate points that statistically cause most trouble between the parties).
So although very frequently nowadays estate agents, in addition to their traditional role as mediators, also write the “compromesso” contract, it is generally advisable before signing to consult one's notary who will be handling the definitive contract, so that, after perusing the draft of the preliminary contract, he can provide all appropriate information and suggestions as set out above.
A 1997 law makes it possible to register preliminary contracts so long as they are a public document or an authenticated private agreement (so the "intervention" of the notary is indispensable); the law also states that they become invalid as though they had never existed if, within one year of the date agreed by the parties for settlement of the definitive contract and in any case within three years of the above registration, the definitive contract has not been registered: registration, with its “reservation” and "officialising" effect, protects the purchaser from possible non-completion by the vendor, particularly in the case where the latter decides to sell to a third party a property already promised to the purchaser.
Registration in such cases fulfils an essential function in the protection of the prospective purchaser, because it renders the preliminary contract “assertable erga omnes”, in the sense that no party not involved in the “compromesso”, after it has been registered, can maintain he was not aware of the preliminary agreement and therefore of the fact that the property was basically “reserved”: the registration of the preliminary contract protects the purchaser from any prejudicial event that may affect the property (e.g. mortgages or foreclosures) between the preliminary and definitive contracts; in the case of bankruptcy of the vendor, too, the registration of the preliminary agreement makes it much easier to recover all or part of any monies paid over (in bankruptcy proceedings, a promisee purchaser has a privileged position with respect to other creditors).
Finally, it must be emphasized that, as regards the registration of the preliminary contract, the duty imposed by law on any deposit (0.5%) or advance payments (3%) is recovered at the time of the definitive contract, in the sense that the duty paid is deducted from the amount of duty owing upon registration of the definitive contract.
The only fiscal charges on the contracting parties are the fixed registration tax and stamp duty, besides the costs of registering the transaction and the fees for the notary's services (consulting, preparation, witnessing and registration of the contract).
So, while the transcription of the preliminary contract and hence the intervention of a notary are optional for the parties (but certainly advisable in the light of the above guarantees they offer), it is still incumbent on the parties and now on the real estate agency to register the contract, even if it is stipulated privately.
The notary will be able to provide all necessary information as to the nature of the document to be signed and as to the content of the document, so as to avoid unpleasant surprises.