Preliminary purchase contract: step by step assistance from Great Estate


Preliminary purchase contract: step by step assistance from Great Estate

Great Estate Network , Real Estate Insights Oct 04, 2023 2 Comments

Find out everything you need to know about the preliminary purchase contract and the services that the Great Estate network can offer you in this regard.

THE PRELIMINARY PURCHASE CONTRACT

The preliminary purchase contract, commonly known as a compromise, is a real written contract that serves to mutually and legally bind the seller and the buyer to stipulate the definitive sales contract.

This must take place in compliance with the methods, terms and price established in the contract itself; with the compromise the two parties undertake to stipulate the definitive contract of sale in the presence of a notary: only following this stipulation will there be the definitive transfer of ownership.

THE ELEMENTS OF THE COMPROMISE

The preliminary contract must contain some essential elements, the lack of which entails the invalidity of the contract: the consent of the parties, the written form, the exact determination of the real estate, and the price of the sale.

In addition, the preliminary contract usually contains other clauses, called accessories, such as the deadline for signing the definitive contract (which can be simple or essential), the penalty, and the deposit. The latter can be confirmatory, consisting of the payment of a deposit of money: it can range from a minimum of 10% to a maximum of 30% of the agreed price (percentages however completely left to negotiation between the parties).

It is important to know that the more complete, detailed and exhaustive the content of the preliminary contract is, the fewer doubts will arise when signing the definitive contract.

THE FORM OF THE PRELIMINARY SALE CONTRACT

The preliminary contract must have the same form as the definitive sales contract under penalty of nullity. In fact, pursuant to art. 1350, first paragraph no. 1 of the Civil Code, contracts that transfer ownership of real estate must be made by public deed or private agreement, under penalty of nullity.
The parties can therefore proceed independently through private deed, or contact a Notary and conclude the “compromise” by public deed or authenticated private deed.
This last option is essential if the preliminary contract concerns properties to be built or under construction (Legislative Decree no. 122/2005, art. 6).

THE REGISTRATION OF THE COMPROMISE

The preliminary contract must b e registered with the Revenue Agency within 30 days of signing.
The registration obligation applies to:

  • on the parties;
  • on the Notary, if the preliminary document is drawn up in the form of a public deed or authenticated private agreement;
  • on any real estate broker who favored the conclusion of the agreement between the parties and who in this case remains jointly and severally liable to the latter.

The costs expected for registration are as follows:

  • the fixed registration tax of 200 euros
  • the stamp duty: 16 euros for every 4 pages and in any case every 100 lines
  • the proportional registration tax equal to 0.5 of the confirmation deposit and 3% of the sums foreseen as a deposit on the sales price, if the deposit is not subject to VAT. However, if it is subject to VAT, the registration tax is applied at a fixed rate. These costs will then be deducted from the cost due for the registration of the definitive sales contract.

THE TRANSCRIPT OF THE COMPROMISE

Once stipulated, it will be possible to proceed with the transcription of the preliminary purchase contract in the Public Real Estate Registers: a very important act since, following it, any other operation concerning that same property, subsequently transcribed, will not have effect on the buyer. This means that any sales, mortage registrations, foreclosures, etc. will not be enforceable and therefore binding against you.

The real estate sale process is often very complex. For this reason it requires specific consultancy and high professionalism capable of completing it in the shortest possible time, resolving any problems and with the full satisfaction of all parties involved.

The Great Estate group offers step by step assistance in all phases of the sale, including the drafting of the preliminary contract, a service carried out by expert professionals with the support of specialized technicians who are part of the Partner network.

Contact Great Estate for more information.

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Chiara Peppicelli

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