Property to renovate in Italy
Property renovation: what to do to compliant the Italian rules
When renovating a property in Italy, there are many different legal, contractual, and regulatory issues that pose a challenge—even in someone’s home country. It is for this reason that dealing with renovations in a foreign country is even more difficult. However, this is where we seek to provide expert guidance and counseling, to ensure that you can conduct a successful renovation in Italy.
When entering the Italian renovation market, many foreigners seek out older properties that require renovation and restoration, and even rebuilding in some instances. For this reason, many buildings are placed on the market with the wording da restaurare (needing restoration work), or da ristrutturare (needing renovation). This is something that can help narrow the search out of the gate.
Some of the greatest challenges for renovating in the Italian market include construction agreements, navigating language barriers, understanding policies and regulations, and sourcing reliable professionals to help with the renovation. In short, knowing your way around the rules and laws of renovation, being able to ascertain costs implied, and counting on a team of expert pros is essential.
So, having a property to renovate in Italy is not a simple thing if you can’t count on the help of proper professionals.
Building permits and licenses for property renovations in Italy
The first thing to consider is whether the property requires renovating authorization documents. Having a local expert to determine whether these are required is important. If these are not present, the owner must apply for them at the local municipality.
The second pressing issue is determining the contractual part of the renovation. Construction agreements in Italy with Italian suppliers are governed by Italian regulations. This means that renovations must be carried out in a workman-like manner, with professional and technical expertise. Contractors are bound to detect inaccuracies or defects, and immediately notify the owner; and, the owner is bound to pay all contractors according to agreed-upon prices.
The appointed construction company in charge of the renovation must sign two insurance liability policies, including the Provisional definitive surety, and the Posthumous ten-year policy. These policies provide coverage for any financial risks which may arise on the construction site.
One of the final crucial aspects of a renovation to be defined is the owner’s preference and desire for the aesthetic and architectural features of the building. Decisions concerning the building’s relevant architectural aspects greatly depend on if the building is to be an individual’s, or family’s home, or if its ultimate destination is to house a commercial activity.
Building permits are another crucial aspect of renovations in Italy. The Permit to Build is an administrative permit that allows building or demolition in compliance with the local municipality’s urbanistic plan. These come in two forms: SCIA and CILA permit.
The SCIA (Segnalazione Certificata di Inizio Attività – Certified Start of Activity Report) is the initial building permit necessary in Italy. It is a simplified administrative authorization issued by the local authorities, the municipality in charge. It acknowledges the right to proceed in the required renovation or restoration work on a property, and commonly applies to maintenance on a building’s structure; the restoration work involving a building’s structure; and renovation that changes the volume, height, or shape of a building. A CILA (Comunicazione di Inizio Lavori Asseverata – Authenticated Communication of the Beginning of the Modifications) permit simply applies to minor building interventions and renovations that do not involve structural work or changes to the building.
In either case, permits are required for:
- new construction works;
- urban restructuring interventions;
- building renovations that lead to the creation of new building spaces, different from the previous ones.
What you need to know about the building permit in Italy
The building construction permit is issued exclusively for public buildings and facilities of public interest.
The Building Permit Application comprises the terms of commencement and completion of the building interventions. The deadline for the start of the works cannot be more than one year from the submission of the application. Applications are processed in order of submission at the competent Ufficio Comunale, Municipality office. Then, within 60 days of submission, the local authorities can propose a ban on the continuation of the works. The Municipality officer may request that the attached documentation be integrated or that the project be modified. Any additions must be made within the following 15 days and the deadline for issuing the proposed provision is suspended.
Bill of quantities for real estate renovations in Italy
Along with a building permit and license, builders must also acquire a Bill of Quantities, also known as a price quote. This price quote contains specific and accurately drafted quantities and prices of material and labor that will be needed for a renovation project. These are commonly put together by surveyors, architects, engineers, and building estimators.
Construction estimates are prepared using a procedure called the Executive Metric Calculation (EMC). Typically, landlords and constructors are the two groups who use the EMC to verify the prices and costs of a renovation project.
There are two kinds of Bills of Quantities: a “Build to Order” quote, and a “Turnkey Project” quote. The build-to-order is the most accurate method to define the actual costs implied by a specific renovation, both in the estimation phase and in the accounting of the work, whereas turnkey projects are the most convenient assessments.
In addition to this, there are two types of “in progress” quotes that establish the economic planning of a project. The first type is the estimated metric calculation which defines the forecast and is drawn up before the commencement of work. The second type is a final metric calculation which is drawn up once work is completed, and shows the actual quantities used. Both are important during renovations.
Work management and construction site management
Aside from the financial aspects of renovations, all renovation construction sites need to have an experienced and well-prepared construction manager to oversee, coordinate, problem-solve, and organize ongoing construction.
On-site experts are entrusted and required to carry out specific roles and provide specific results. The construction site manager, however, is entrusted to ensure means and not results. What this means is that they are entrusted to carry out several tasks, including surveillance of the execution of the works; check on the methods of implementation of the individual parts; technical and administrative compliance; and keeping of accounts and controlling of expenditures.
As a result of this, a construction manager’s fee is based on a percentage cost of the work. Typically, it ranges between 4% and 5%; however, there are some instances wherein it may reach 10%. Regardless, it is important to have a capable construction manager who can handle all on-site problems and ensure the smooth operation of the renovation.
Payment management when renovating a property in Italy
The final critical aspect of renovations to pay attention to is payment management. As discussed previously, Italian banks are rather hesitant to provide services to non-Italian residents. This includes providing bank accounts and banking services to foreign entrepreneurs or business owners. This, then, makes payment management in sending and receiving funds more difficult.
In 2014, the OECD introduced the Common Reporting Standard to combat money laundering. This, however, made it much more difficult for non-residents to open bank accounts. Along with many other new standards and regulations, has even made it difficult for banks to keep up with changes. In turn, it has become more difficult than ever for non-residents to open local bank accounts, and to manage payments for renovations (paying local suppliers, etc.).
Thus, many local Italian banks simply will refuse to open new accounts for non-residents because of the slough of new regulations and rules that they must comply with.
Our services for property renovations in Italy
However, our team is proficient in Italian and International law and can help liaise with many different financial, legal, management, and other aspects of renovations in Italy. We can help provide counseling and support to make renovations more accessible through funding, and we can help you acquire building permits and build bills of quantities.
We want to use our expertise and experience in this area to help foreigners interested in starting businesses in Italy or invest in Italian real estate do so with ease, and without the hassle of navigating challenging financial, legal, and bureaucratic red tape.
Get in touch