The intermediary who does not inform the parties about the irregularities of the property is liable

Real estate law

A recent decision of the Italian Court of Cassation (dated 02 May 2023) provides that, pursuant to Article 1759(1) of the Civil Code, the intermediary must inform the parties of circumstances of which he is aware, or which he should have been aware if he had exercised the diligence required by the professionalism of the activity carried out, and which relate to the valuation and security of the transaction and which may affect the conclusion of the transaction or cause the parties to execute the contract under different conditions.

It follows that, in the event of a transaction being concluded, the intermediary may be liable for damages if it fails to inform the prospective buyer of the existence of urban planning or structural irregularities that have not yet been remedied in relation to the property to which the purchase commitment relates, the intermediary's compliance with this duty to inform being subject to review solely in relation to the time of conclusion of the transaction. This is confirmed by the Court of Cassation in Decision No. 11371 of 2 May 2023.

The liability of the intermediary in case of failure to provide this information leads to damages. The party that should have paid the commission can also avoid payment if it claims that the intermediary breached its duty to inform.

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