The procedure for the purchase of a property on paper (off plan) or under construction is different from the ordinary procedure concerning the guarantees provided by the building firm.
The Italian law provides for specific guarantees to protect the buyer and on charge on the seller of the real estate property to be built, if the latter is an entrepreneur (it does not apply in the event that it is an individual). In the presence of such conditions the law requires in favour of the buyer many guarantees, including the obligation for the builder/seller to deliver to the purchaser a guarantee to warrant the collected or to be collected sums for the purchase of building yet to be built.
This guarantee must be issued by a bank or an insurance company or from a qualified financial intermediary who has to guarantee to the buyer not only the return of the paid sums but also the value of any other compensation paid to the builder in case the latter incurs a “crisis situation”, i.e. in cases in which the builder is or has been subjected to foreclosure, in relation to the property covered by the contract or bankruptcy, extraordinary administration proceedings, arrangement with creditors, compulsory liquidation.
A second guarantee for the buyer is that the builder is required to consign a property indemnity insurance policy against the vices and defects of the construction. This insurance policy is designed to cover direct physical damage of the property, including damage to third parties that may become manifest within ten years from the date of completion of works.