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Introduction
Ownership of real estateOwnership is a right in rem that grants to the owner the right to enjoy (i.e., to decide whether, how and when to use) and to dispose of things fully and exclusively, within the limits and in compliance with the obligations laid down by the legal system.
Ownership has the following features:
- it is perpetual (i.e., it is not subject to time limits);
- it is immediate (i.e., it does not need third-party cooperation to be enforced);
- it is full (i.e., it grants general powers to enjoy and dispose); and
- it is exclusive (i.e., it grants the owner the right to exclude any third party in the relationship with the thing).
Nevertheless, the ownership right is not unlimited: in exercising it, the owner must comply with the limits and observe the duties set by the legal system to safeguard both public and private interests (e.g., not damaging other properties or people, avoiding emissions and building within minimum distances).
According to the applicable laws, two sets of assets must necessarily belong to the state or to other public bodies (except under special circumstances):
- state property (such as beaches, ports, roads and waterways); and
- non-disposable property (such as mines, quarries and buildings intended for public service).
Both sets of assets may, if their nature permits, be exploited by non-public entities; for example, with concessions for the use of beaches for bathing establishments.
The ownership right can be split between more persons, who act as co-owners of the same right. Co-ownership can be voluntary (if agreed between the parties), legal (if provided by law) or incidental (e.g., hereditary co-ownership). Each co-owner will have an ideal share of the full ownership right that indicates the quantum of power over the co-owned real estate and its exercise of such right will be limited by the rights of the other co-owners and vice versa.
In general terms, each co-owner has the right to use the common real estate in its entirety – without autonomously altering its use or preventing the other co-owners from making equal use – and to dispose of its co-ownership quota (and not of the entire asset).
A peculiar type of co-ownership over real estate pertains to condominiums and is specifically regulated under the Italian Civil Code. In a condominium, each owner is at the same time the exclusive owner of a piece of property included in the condominium and co-owner of all common parts of the building. Specific rules apply to condominiums, both with respect to the co-ownership right over the common parts of the building and to the individual right on the portions of exclusive ownership.
Ownership may also be limited by other in rem rights codified under Italian law (e.g., surface right, emphyteusis, usufruct right, use right, housing right, easement rights, mortgages ), privileges such as tax privileges, propter rem obligations (e.g., obligations deriving from town planning agreements with municipalities and other possible limitations deriving therefrom), and by pre-emption rights (which may be either legal or contractual).
System of registrationReal estate properties, and most in rem rights associated thereto, must be registered with the relevant real estate registers and in the real estate tax register (the cadastral register).
The real estate registers provide certain information relating to the properties, such as transfers of ownership that have occurred in the past and existing encumbrances, thus allowing a potential investor to have knowledge of the rights existing over a real estate asset with a high level of certainty.
Except for a few Italian north-east territories where a specific registration regime applies, registration in the real estate registers is not a condition for the validity of a transfer of real estate. Instead, it ensures preference and disclosure effects, meaning that if there are multiple registrations on the same real estate asset, the title of the person who registered first prevails over the others, and the relevant right may be enforced against third parties.
For real estate to be registered, deed of transfer of ownership must be executed before a notary public who verifies information set forth in the real estate registries and takes care of registration formalities of the deed.
The cadastral register essentially allows the determination of the taxable income of a property and contains other useful information, such as the property plans. It does not attest the title of ownership over real estate.
Choice of lawAccording to Italian law, transactions related to in rem rights on real estate located in the Italian territory are governed by Italian law (lex rei sitae). However, the parties may opt for the application of a different law governing their wider contractual relationship and the overall transaction; it being understood that the deed of transfer executed before the notary public must be subject to laws of Italy.
