JUDICIAL REAL ESTATE AUCTION IN ITALY
A real estate is put up for auction as a result of it being foreclosed by a bank or by a creditor with a claim when the property owner has not paid his/her debts. The creditor can turn to a judge who shall send an invitation for payment to the debtor. If the debtor is unable to pay the due amounts, the decree becomes enforceable and the given property becomes the only way for the creditor to satisfy his/her claim. This property is therefore foreclosed or blocked and becomes subject to a judicial auction. In order to guarantee the creditor’s interests, the auction of the property needs to comply with the principle of publicity and be offered to an unlimited number of persons. This requirement is fulfilled by including the offer in the list published on the Ministry of Justice’s website. Italian law provides for two types of auctions – Vendita con incanto and Vendita senza incanto.
Auction houses for sale in Italy
Vendita senza incanto is the generally practiced type of auction, which involves a minimum acceptable price and a specific time frame, within which participants are required to make their bids. The offer is made in a secret sealed envelope, which will be opened by the competent authorities pursuant to a specific procedure.
A vendita con incanto is a public open auction. The property is sold to the highest qualified bidder regardless of the price. This auction can be defined as a secondary one, because it is only applicable to those cases for which there were no offers at the vendita senza incanto or when, for some reason, it was impossible to carry such an auction out. Interested potential buyers are required to bid on the specified auction date. If no new bidding is made within three minutes, the last bidder wins. The deal is however provisional as new proposals received in the 10 days following the bid will be accepted, and might possibly prevail provided they are at least one fifth higher than the originally winning one. In this case the auction will be reopened exclusively to the participants of the previous auction.
According to the Italian Code of Civil Procedure everyone except the debtor is allowed to bid at the auction. Usually, the bidder has to make a deposit that is regularly10 % of the auction price. A minimum price is assigned to each property and that is the price at which the auction starts. Furthermore, each participant needs to deposit 10% of this minimum amount before the bid itself.
As described above, the offers are submitted in close envelopes and must be delivered to the court together with an application form which is available on the respective court’s official website. An offer can also be realized with the support of a competent attorney, appointed through a Power of Attorney act, to be attached to the offer. The envelopes shall be opened in the presence of the bidders at the time set for the auction. The person that offers the highest amount wins the property. This person is called “the successful bidder” but he/she is not the owner yet. In fact, the property’s transfer is subject to the future owner’s paying the full purchase price within a specified time frame – usually 120 days from the auction. If the balance is not paid within this interval, the property goes back to the auction list and the “successful bidder” loses their deposit. Those who participate in the auction without winning it are entitled to receive back their deposit on the day of the auction.
Italian home auctions: the decree of transfer
After the balance has been settled a judge signs a decree of transfer. This decree confirms that the ownership of the property has been transferred to the person who won the bid. The purchase transfer signed by a judge is enforceable and allows for immediate release of the property. However, should any difficulty – such as an appeal by the previous owner, or adverse possession of the property – incur it is the successful bidder’s responsibility to carry out the respective legal auctions at their own expense.
Real estate purchasing through judicial auctions is much safer than buying privately, because they offer a great advantage: all transcriptions and registrations costs related to the property are canceled. In addition to this, the property is usually priced well below market value.
Pursuant to the principles of publicity and transparency, all real estate auctions in Italy are to be available on the Internet. The website of the Ministry of Justice contains an updated list of all properties on judicial auction. The page is very straightforward, practical and user-friendly inasmuch as each selected property has a description and minimum bid price. Additionally, the website offers a search engine to select a desired property location. Finally, each offer contains a pdf file named “Avviso” with information on the auction date, time and place.
Another useful webpage is the official page of the National Association of Judicial Auctions. This page offers even more detailed information about the properties on judicial auction, with search categorized by the type of property, purpose of the property, minimum and maximum price, preferred location, and carrying data about the procedure itself. The only disadvantage is that the website is not translated in English and might be a little less user-friendly for a non-italian speaker, unless they have a lawyer assisting them through the whole procedure.
As an alternative, it is possible to take a look at the websites of the different Courts in Italy. Each of them has a section named “Aste”, meaning auctions. The search engine then redirects you to the website of the Ministry of Justice.
In the above websites there is always a professional delegated by the Court (lawyer, notary or accountant) that provides the necessary information of the property and the whole auction information and an appointed custodian that takes care of free of charge property visits.The names of the professionals in charge and their contacts are shown in the notice of sale.
Comprehensive long-standing expertise about standing legislation and rules, a vast network of contacts, an insider’s take on the real estate market and red tape implied. And extensive skilled know-how. Our team of qualified real estate agents, surveyors, architects, accountants and lawyers is ready to assist prospective foreign investors participate in a judicial real estate auction in Italy.
What we can do for you is:
- assist you in getting to know the local real estate market and the procedure for purchasing a property through the means of a judicial auction;
- duly inspect all preliminary documents of a listed property and provide an advice on it;
- offer a summary of our findings in a technical and due diligence report;
- discuss a strategy for successful bidding;
- represent you in submitting the offer and completing all administrative steps related to it;
- represent you and take the respective legal actions in the case of any burdens on the property;