Prejudicial encumbrances
“Formalità pregiudizievoli” (prejudicial formalities) is the title of a section of the appraisal report, and for many people it is the point where they stop reading. Underneath is a list of lines with dates, register numbers (registro particolare) and abbreviations.
They are the registrations (iscrizioni and trascrizioni) that appear in the land registers against that property. Prejudicial because they limit or undermine the rights of whoever owns it.
What you find in it
The recurring entries are few and quickly learned.
Mortgage registrations (iscrizioni ipotecarie). The mortgage securing a loan, or one registered by the tax authorities or by a creditor who has obtained a court ruling.
Attachment registrations (trascrizioni di pignoramento). The act that started the proceedings, and any later attachments by other creditors.
Seizures (sequestri). Precautionary or criminal, depending on their origin.
Court claims (domande giudiziali). The registration of a pending lawsuit concerning that property: a partition, an ownership claim, a challenge.
Registered deeds and restrictions (atti e vincoli trascritti). Planning agreements, undertakings binding the land (asservimenti), use restrictions, easements created by deed.
What disappears with the decree
Here is the part worth the price of admission, and it is written in article 586 of the Code of Civil Procedure. With the transfer decree, the judge orders the cancellation of the registrations of attachments and of mortgages.
Two categories, expressly named. Whoever buys at auction does not inherit the debtor’s loan and does not inherit their creditors’ mortgages.
It is worth noting the exception in the same article: the mortgages that remain are those relating to obligations the successful bidder has chosen to take on.
What remains instead
Anything that is neither an attachment nor a mortgage registration is not touched by the cancellation order.
A court claim registered before the attachment remains, and with it the uncertainty about the outcome of that case. An easement created by deed and registered remains. A use restriction remains.
The rule of thumb is always the same: what is a person’s debt is cancelled; what is a feature of the property remains. The practical effects are in the guide on easements and restrictions, and the specific case of mortgages and attachments in what gets cancelled.
How to read them
Three tips, in order of usefulness.
Look at the dates relative to the attachment. The chronological order relative to the registration of the attachment decides many things, starting with which later formalities are swept away.
Don’t stop at the label. A line that says “ipoteca volontaria” (voluntary mortgage) and one that says “domanda giudiziale” (court claim) look the same in the list and have opposite consequences for you.
Check how old the appraisal report is. Formalities continue to be registered even after the report has been filed. If months or years have passed, an up-to-date search before bidding settles any doubt about what has been registered in the meantime.
Who cancels them, in practice
They do not disappear by themselves the moment the decree is signed. Article 591-bis gives the professional delegate the task of carrying out the cancellation formalities that follow from the decree.
It is a task that takes time. In the meantime, a search may still show formalities that the judge has already ordered to be cancelled: it is not a problem, but it is worth knowing before you panic.