Defects in the property before the sale, does the purchase fall through?

Signing the preliminary sales contract is an important moment in the real estate purchase , but what happens if the buyer discovers flaws and defects in the property after signing it?

Leaks , cracks , structural problems or urban and building irregularities can compromise the value or habitability of the property. However, the buyer can protect himself, it is his right and he has several tools that allow him to take action to avoid economic damage .

What is meant by property defects

Defects are material or legal defects that significantly reduce the value or suitability of the property for its intended use. They can be:

• material defects, such as water infiltrations, mold, cracks in the walls, non-functioning systems;
• cadastral or urban planning defects, such as building abuses, discrepancies with the permits, lack of habitability;
• documentary defects, relating for example to the absence of mortgages, easements or seizures capable of prejudicing the buyer's rights.

The seller must sell a property free of defects, mortgages or liens and in compliance with urban planning and building regulations. If this is not the case, once the sale has been concluded, the buyer benefits from the guarantee action provided for by Article 1490 of the Civil Code for any material defects found.

However, this action cannot be exercised if the defects are discovered after the signing of the preliminary contract which is not yet suitable for acquiring ownership of the property. The position of the future buyer who has been placed in advance in the availability of the defective property is not legally analogous to that of the actual buyer who has already become the owner of the property right.

In the event of non-fulfilment of the preliminary contract, it is not permitted to invoke the seller's guarantee referred to in the above-mentioned provision and the general rules relating to non-fulfilment of the contract apply.

When can you withdraw from a preliminary sales agreement?

Generally speaking, the real estate compromise (the preliminary sale) obliges the parties to conclude the definitive contract, the so-called deed . It does not transfer the ownership of the property but only obliges the contractors to stipulate a further contract with which the transfer of the ownership right will take place.

If the seller has handed over the keys to the property to the future buyer for various reasons (one of these being the execution of renovation works), it may happen that serious defects emerge, due to which the buyer no longer wants to conclude the deal.

Once the seller's breach has been ascertained, it will be possible to withdraw from the contract and obtain the return of double the deposit that may have been paid by the buyer pursuant to Article 1385 of the Civil Code . The law also states that the fulfilling party (the future buyer), if he prefers, may request the execution of the contract or its resolution - in this case the compensation for damages will be regulated by the general rules.

Alternative actions are usually exercised when double the deposit is not considered sufficient to compensate for the damages suffered . We remind you that the return of double the deposit is a form of dissolution of the out-of-court contract since the damage is already quantified and does not have to be demonstrated before the Judge.

How does contract termination work?

We have seen that by waiving the requirement of double the deposit, the buyer will have further alternative legal remedies.

The future buyer may first ask the Judge to terminate the contract due to non-fulfilment by the future seller, pursuant to article 1453 of the Civil Code .

In order for the contract to be declared terminated, the breach must be of no small importance . This means that the defects must be of a certain gravity.

The presence of defects cannot be invoked in a specious manner, just because one had second thoughts about concluding the deal.

This requirement is also required in the event of withdrawal with return of double the deposit.

Only the presence of defects regarding the structure of the property or the possibility of using it in a suitable manner or as agreed upon can justify the termination of the contract and the compensation for the damages suffered. With the termination the buyer will be exonerated from carrying out his performance and if already performed he will obtain its restitution.

In the event of minor defects, the buyer may only request compensation for damages without interrupting the contractual relationship, such as reimbursement of the expense that was necessary to eliminate the discovered defect.

The prerequisite for activating remedies in the event of non-fulfilment is that the defects were not known or easily recognisable. If the defects were evident or had even been communicated to the future purchaser and accepted by him, it will not be possible in any way to intervene with the remedies set out above.

Execution of the contract by means of a judge's ruling

The last alternative offered by the aforementioned article 1385 of the Civil Code, in the event of non-fulfilment by the future seller, is to act to obtain specific fulfilment. In the case of a preliminary contract, the buyer may in fact ask the judicial authority, pursuant to article 2932 of the Civil Code , to transfer the ownership right if the other party refuses to give his consent.

At this point, once the transfer of ownership has taken place, the buyer may request a reduction in the selling price , in light of the defects found. He will therefore be exempted from making the balance or, if he had already paid the entire price, from obtaining a refund, even partial, of the sum.

What are the remedies in case of urban planning non-conformities?

Urban planning irregularities can have very serious consequences, because they could prevent the signing of the deed or render the deed null and void. In particular:

• the lack of urban planning compliance prevents the transfer of ownership;
• the lack of habitability can compromise the possibility of obtaining a mortgage or legally living in the property.

Even in these cases, the buyer may refuse to stipulate the definitive contract and release himself from the contractual obligation. The provisions on breach of contract for cases of contracts with reciprocal performances will apply to this case.

It follows that he will be able to ask for the resolution of the preliminary contract and compensation for damages.

How to prevent problems related to the presence of defects

To avoid being involved in long, expensive and unnerving legal actions related to the presence of defects or non-conformities in the property you intend to purchase, it is advisable to:

• insert protection clauses into the preliminary contract, such as those guaranteeing urban planning compliance and the absence of defects;
• carry out technical and urban planning checks before signing the contract;
• seek the assistance of a notary or a trusted lawyer already in the preliminary phase.