PROPOSAL OF PURCHASE, PRELIMINARY CONTRACT, OR COMPROMISE?
It frequently happens that a client comes to my firm, only after having signed a proposal to purchase a property, without it being clear to him or her that the purchase proposal, once accepted by the seller, converts into a real preliminary contract, binding and with obligatory effects. The deposit is collected by the seller at the moment he accepts the proposal and communicates this to the buyer: the parties at that point are obliged to enter into the final contract of purchase and sale before the notary. I often hear people say, “lawyer, I just signed the proposal, but I want you to make sure the property is problem-free.”
If there are any checks or verifications that need to be made on the property we intend to buy, or if it becomes advisable to seek legal advice on any issues pertaining to the property, it is a good idea to do so before signing the purchase proposal. Alternatively, at the very least, it is a good idea to condition the effectiveness of the proposal on the successful outcome of the inspections to be carried out. For example: ideally, it would be possible to check the building regulations-urban conformity-the absence of easements or mortgages-and whatever else, before formulating and signing the proposal (and paying the deposit); however, it may happen that it is necessary to quickly “block” the property of interest to avoid losing the opportunity to purchase it.
In this case, the effectiveness of the proposal, in order for the buyer to be protected, must at least be conditioned, for example, by including in the pre-printed form provided by real estate agencies this sentence: The effectiveness of the preliminary contract of sale and purchase, which will be concluded in the event of acceptance of this proposal, is subject to the verification of the building and urban conformity of the property.”
Once the purchase proposal is accepted by the seller and the acceptance communicated to the buyer, the preliminary contract is thus concluded, and it must be registered with the Internal Revenue Service. The so-called “compromise” is nothing more than a new, more complete preliminary contract, which incorporates the contents of the purchase proposal, supplementing it with all those elements that presumably were not known at the time of the proposal.
It is not obligatory to draw up the preliminary contract, but it is advisable to do so, after having made all the necessary checks that could not be done before: building and urban planning regularity, absence of liens, mortgages, real rights of others, and any other verification that can assure the buyer the serenity of buying a property free of any problem. Buying a house is always a big step; all it takes is a few extra precautions to prevent it from becoming a leap into the void.