ITALY Law and Practice Contributed by: Guido Alberto Inzaghi, Ivana Magistrelli, Silvia Gnocco and Gabriele Paladini, SI – Studio Inzaghi
• the factual cadastral situation of the property complies with that registered with the relevant cadastre; and • the list of the building titles. According to the Italian Civil Code, the purchaser has to notify the seller of any breach of the war - ranties within eight days from the relevant dis - covery. A one-year statute of limitations applies from the date the purchaser takes possession of the property. These provisions may lead to the termination of the purchase agreement, and to a full refund of the purchase price. According to current market practice, the parties usually negotiate and include additional repre - sentations and warranties, and agree to depart expressly from the set of rules included in the Italian Civil Code in relation to warranty defects, thus derogating to the above-mentioned time limitations. Additional representations and warranties are usually included in sale and purchase agree - ments. Parties usually include contractual remedies or special indemnities to cure any breach of the representations and warranties preventing the termination of a sale and purchase agreement once the transfer of title has been executed. The representations and warranties generally last for a certain amount of time (the “survival period”) following the execution of the sale and purchase agreement, and the buyer will not be able to cover claims that arise following the end of the applicable survival period. The survival period usually ranges from six months to two years, although representations and warranties covering the seller’s title to the
property and tax matters usually remain valid until the statutory terms provided by law have elapsed. Warranty and indemnity insurance policies pro - viding cover for losses arising from breaches of the representations and warranties are being used with increasing frequency, particularly when one of the parties (often a real estate investment fund) is to be liquidated upon com - pletion of the relevant transaction. Usually, the policy is underwritten by the purchaser, and payment of the insurance premium is divided between the parties. 2.6 Important Areas of Law for Investors Investors should carefully evaluate all tax aspects of the investment. Other areas to be taken into account would vary depending on the type of investment to be carried out. In relation to core investment, a detailed evaluation of leases in place would be required, while for value-add investments – where the goal is to increase/cre - ate value – planning and zoning aspects should be evaluated in detail, with the same approach to be applied as to the acquisition of develop - ment projects. 2.7 Soil Pollution or Environmental Contamination Italy applies the “polluter pays” principle, which means that an owner who is not responsible for the pollution/contamination is not obliged to carry out the relevant remediation works. If the owner does not carry out remediation works, the owner would not be entitled to carry out con - struction works and, in the worst-case scenario, the public authorities may carry out the reme - diation works at the expense of the owner. In this case, upon the sale of the area, the public authorities should return to the owner the excess price obtained through the sale compared to the
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