by Giulia Comparini, Partner at COCUZZA, and Dario Tarabelloni, Junior Associate at COCUZZA

Real estate transactions may carry significant risks when it comes to potential irregularities of both the property itself and the related documentation. Some irregularities may, under certain conditions, affect the validity of sale and purchase agreement (absence of the Certificate of Habitability, cadastral or town-planning non-conformity of the property). The purpose of this article is to shed light on the negative consequences that may arise from the absence of such requirements.

The Italian Supreme Court (judgement no. 23604 of 2 August 2023) recently had the opportunity to address the important issue concerning the effects of the absence of the Certificate of Habitability in real estate transactions (the official document attesting that the property meets the minimum safety, sanitary and hygienic requirements), holding that the absence of the Certificate of Habitability does not always and automatically entail the termination of contract due to the seller’s breach.

Indeed, if the absence of the Certificate of Habitability is due to the effective and irremediable lack of the safety and sanitary requirements that make the property fit for use, in this case the purchaser may legitimately request termination of the sale and purchase agreement; whereas if the absence of the Certificate of Habitability is due to the lack of the safety and sanitary requirements, but this deficiency can be remedied, this might be considered as a defect of the property, and the buyer may alternatively request termination of the contract or reduction of the price paid.

However, if the absence of the Certificate of Habitability is purely formal (only the material document is missing), but the safety, sanitary and hygienic requirements are met, the sale and purchase agreement may not be terminated for this reason. In this case, the buyer may only claim compensation for damages.

As to the correspondence between the effective state and conditions of the property and the related cadastral documentation, Italian law provides for the invalidity of any deed concerning real estate transactions if the deeds do not contain, for urban real estate units, in addition to the cadastral identification, reference to the cadastral plan and the declaration made by the owners of the property that the cadastral datas and maps are in conformity with the effective state of the property.

Therefore it will be the responsibility of the parties (and in particular, of the buyer) to ensure that: (i) the Certificate of Habitability has been obtained; (ii) the effective state and conditions of the property correspond to the cadastral documents. The notary, in fact, has no obligation to verify the cadastral and urbanistic conformity of the property, and cannot refuse to receive a deed in the absence of the Certificate of Habitability.

In conclusion, particular attention must be paid to the correctness and completeness of the documents relating to the property, the parties having specific obligations in this regard. For this reason, it is recommended to seek assistance from technical specialists and experienced professionals, so as to reduce the multiple complications that might lead to the invalidity of the deed.