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Recently, there have been a number of debates regarding the provisions of Legge 122/2005, especially following the bad publicity concerning some off-plan developments in southern Italy.

The object of this piece of legislation is to provide buyers with protection against the risk of developer non-performance, bankruptcy or fraud. This protection comes in the form of bank guarantees, and 122/2005 places an obligation on the developer to provide them. Furthermore, these guarantees must be stipulated in the preliminary contract and the law is unequivocal about which financial institutions are to be used.

This is good news you will say, but I wanted to point out an important point.

In the absence of such guarantees, the preliminary contract is considered void of course. However, members here interested in purchasing an off-plan development should take note that the annulability of a preliminary contract is either absolute or relative.

What does this mean?

It means that the non-fulfilment of an obligation that has been placed on a developer, as provided for by 122/2005, involves what is termed a “nullità relativa” - in other words, the injured party must seek to annul the contract.

So what can you do to avoid signing a contract without all the necessary legal protection in place, and subsequently avoid situations where it is [I]you[/I] who has to seek remedial action through the courts (something that in Italy can take years to do)?

My advice is to seek a good legal professional who has experience in these matters and who can, moreover, carry out a thorough due diligence, involving, among other things, an in-depth check on the developer’s reputation and solvency. After all, your objective is to purchase a property and not waste time (and more money) trying to obtain the fulfilment of a right through the �������� legal system.