10178 insurance policy for"off plan" buyers

Dear members I recently wrote this legal article, I thought somebody could find it interesting:
Insurance policy for "off plan" buyers.
According to article 4 of the legislative decree 122/2005 the construction company is obliged to deliver to the buyer, at the moment of the transfer of the ownership, an insurance policy as guarantee for eventual serious construction defects affecting the property.
Such insurance has a cover of 10 years.
A good advice is requesting the Notary to make explicit reference to the insurance policy in the Deed of Sale
This article is aimed to explain what type of defects would be covered under this guarantee.
The notion of “serious construction defect” developed substantially throughout the time mostly thanks to jurisprudence.
Originally such notion only included the defects involving a prejudice to the safety and stability of the property.
At present such notion has a larger meaning. It includes all the defects that could provoke a significant decrement of the normal use of the property. As a consequence the guarantee will cover all the damages that might have an impact on the regular use of the property.
If the construction defect has an impact on the regular use of the property, it could also concern secondary elements of the construction.
The use of poor or inadequate materials can be considered as serious defect, if this jeopardizes the habitation and implies maintenance works.
A good example of serious defect can be the case of detachment of tiles in some areas of the apartment.
Another example can be the case of bad sealing of the roof with consequential water infiltrations.
Such examples clearly explain that the notion of “serious construction defects” is rather large.
The law limits the right to receive such insurance policy to buyers who are private individuals.
According to a more restrictive interpretation the buyer should also be defined as a “consumer”; this means that he should be entitled to the policy only if he bought the property for personal use. The consequence is that any entrepreneurial or professional use of the property would exclude such right.
The party having the obligation to offer the insurance policy is the construction company.

Giandomenico De Tullio
Partner
De Tullio Law Firm