Preliminary contract

What is it and how does it work?
5.12.2022 3 minuti di lettura

The preliminary contract is an intermediate stage leading to the conclusion of the sale. In the article we will go into more detail about the steps for editing and what situations can arise and how to protect yourself. 

What’s it and how does it work?
The preliminary contract, also known as a compromise, is an agreement between the buyer and the seller during the sale of a property. It is an intermediate stage between the purchase proposal and the deed, which does not establish the transfer of ownership but only the commitment of the parties to conclude the agreement and indicates the date of conclusion of the final contract.

The contract is legally binding, for this must be drawn up in writing with the possibility of private writing, private writing authenticated or with a public act, and can be drawn up either by the real estate agency or a notary. To write the preliminary you must have the following documents: 

  • the purchase proposal of the property accepted;
  • the personal data of both parties;
  • the data of the property.

Because of the importance of the agreement, both sides are committed to completing it despite heavy sanctions. Indeed, by signing the preliminary contract, the buyer undertakes to pay the amount established as a deposit, confirming the intention to conclude the purchase. On the other hand, the ceding party promises not to make arrangements with any interested third party and to deliver the property under the established conditions.

The registration of the preliminary 
The preliminary contract must be registered within 30 days of signing, if entered into by a notary, the same will register it. When registering a property, you must:

  • pay registration tax of 200 €, regardless of the price of the sale;
  • pay the tax from 16 €, for every 4 sides and every 100 lines;
  • to deliver in duplicate the preliminary sale, with original signature;
  • the documents of the buyer. 

If the preliminary sale contract is not registered within the deadline, the amount of the penalty will depend on how many days of delay have been committed. If the document is not recorded at all, the amount of the tax will be larger. 

Non-execution of the preliminary contract
In the event that one party fails to appear on the day of transfer or obstructs the conclusion of the agreement in other ways, the injured party may appeal in several ways in order to enforce its rights and the agreement entered into. The Civil Code allows several actions to protect against damage caused by the defaulting party:

  1. specific execution: according to the Civil Code number 2932, those who comply with the agreement can obtain a judgment that enforces the agreement not concluded, even if the defaulting party refuses to do so within the deadline;
  2. ending of the contract: article 1453 of the Civil Code allows the ending of the contract, which can be followed by a claim for compensation for the damage caused by the default of one of the two contractors;
  3. withdrawal of the contract: it is a remedy provided for both the preliminary contract and the Civil Code article number1373 that puts an end to the contract. If a deposit is provided in the contract as a guarantee of seriousness, the injured party may request the withdrawal of the contract and make use of the deposit. In these cases, if the buyer is in default, the deposit paid for the property will not be returned, on the contrary, if the default is attributable to the seller, the counterparty can claim up to double the amount paid as a deposit. 

If a down payment is made in advance, it cannot be used as leverage to compensate for the damage. Indeed, the advance payment, unlike the deposit, in case of default and dissolution of the agreement must be returned as all payments made that do not present title. 

The Kaaja method
With Kaaja everything is much simpler and safer. Indeed, this intermediate step is carried out at the same time as the signing of the purchase proposal, but we deepen. 

When the potential buyer finds the property he wants to buy, he can directly bid from the website. If the offer is equal to or greater than the price in evidence, the offer is considered immediately accepted, on the other way, we reserve one's right to give an answer within 21 days in which the seller will evaluate other proposals. 

When the offer is accepted, the buyer has 5 days to sign the purchase proposal digitally, pay the deposit and send all the necessary documents. The signed purchase proposal, for Kaaja, becomes the preliminary sale, which confirms the seriousness of the buyer to want to buy the property and the seller’s intention to leave the property. 
Discover the Kaaja method for selling and buying property, visit the website or call us.

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