Real Estate Due Diligence is becoming more and more relevant in Real Estate purchasing processes in Italy. It plays a very important role as the objective is to verify that the purchasing process is transparent and doesn’t hide any shady deals, especially before any offer is made. This is the reason why you shouldn’t jump into a deal immediately and should rely on the help of a Real Estate professional instead to guide you through the purchasing process. Generally, due diligence entails investigating and analyzing all features related to a property. In this sense, the objective of Real Estate Due Diligence is to provide the potential buyer with clear information regarding the property’s true value.
When carrying out Due Diligence, the following aspects are taken into account:
- Legal aspects: searching previous sale deeds and other records related to the property on the Land Registry, mortgages and lease agreements;
- Technical aspects: researching the environmental conditions of the building itself;
- Economic aspects: evaluating the property with regard to current or to potential use, its relation to the area where it is located and its market value.
Moreover, due diligence can be divided into several aspects:
- Cadastral due diligence: it is fundamental to check where the Real Estate property is located and to check the cadastral documents such as the property’s records on the Land Registry, the cadastral plan and map, and verify that the data corresponds to the one reported in the cadastral survey.
- Administrative due diligence: it is used to research irregularities in previous Real Estate purchase contracts. Different offices are involved in this process:
- the Land Registry Office: this office takes care of issuing original documents;
- the Land and Construction Property Office: this office examines the census and the potential registration of mortgages.
- Structural due diligence: its purpose is to verify property’s conditions and its levels of security.
- Due diligence for installation:it is carried out to verify that the systems installed in the building comply with the parameters established by law. Electric usage is analyzed as well as air-conditioning and other facilities that need to comply with existing norms and laws.
- Due diligence for security: it is carried out to check security regulations such as emergency plans and fire prevention certificates.
- Due diligence for environmental checks:it entails assessing the environment in which the property is located. It is important to verify that there isn’t any source of pollution or other potentially dangerous materials that affect the property.
In conclusion, due diligence is needed not only to obtain a number of necessary documents for the purchasing process but also to check that the property complies with Italian laws and regulations, and to calculate the property’s value. As due diligence is not an easy process, you should indeed rely on a professional Italian Real Estate Law agency to help you with this process.