Discover the answers to your questions about the auction world. From participation strategies to essential rules, from how to arrange a viewing of a property to award criteria and more: everything you need is right here!

A judicial auction is a legal process to sell the assets of subjects with outstanding debts. There are two types of auctions in the Italian legal system:

  • Auction with sealed bids ("senza incanto") (Articles 570 and following of the Code of Civil Procedure for Real Estate). This is the most common because awarding is finalized immediately. The highest bidder wins, with no waiting time. If there are several valid bids, a bidding phase will be opened, at the end of which the highest bid will be the winner and the bidder will be definitively awarded.
  • Auction with open bids ("con incanto") (Art. 576 and following of the Civil Procedure Code for real estate). The open bid auction is less common, and adjudication is temporary. Within 10 days after the end of the auction, the bidding can be reopened if someone puts forward a higher bid and pays a deposit.

Real estate sales, mandated by law for real estate properties, take place primarily online, unless justified exceptions are put forward by the judge to avoid prejudice to creditors or slow down the process.

Through online auctions, one can participate in auctions throughout Italy without the need to travel. Under the new system, taking part in auctions is conducted through a digital platform provided by a private entity registered in the appropriate ministerial registry and called the Sales Manager. For instance, Astalegale.net S.p.A. is registered in the ministerial Register of Sales Managers with its Spazioaste.it platform.

The bids, together with the respective documentation and digitally signed, are sent via certified e-mail to an address maintained by the Ministry of Justice. The manner in which the deposit needs to be paid is determined by each court and is usually done by bank transfer indicating the identification code for the procedure. A bid is considered to have been filed when one obtains a receipt by certified mail.

There are three types of electronic sales:

  • Synchronous (Art. 21 of Ministerial Decree 32/2015). This is a real-time auction taking place entirely online, with the possibility of using a chat during the auction.
  • Mixed synchronous (Art. 22 of Ministerial Decree 32/2015). This combines a traditional auction with an online auction, with an initial choice that determines the type of participation: those who submit paper bids participate by appearing before the responsible person for the procedure, while those who submit online bids continue in online mode. In any event, the auction is conducted in real time.
  • Asynchronous (Art. 24 of Ministerial Decree 32/2015). Bids and bid raises take place exclusively online, within a set period specified in the notice of sale, but on a deferred basis. If another user submits a higher bid, the participant is notified and offered the opportunity to raise their bid. At the expiration of the fixed auction period, the bidder with the highest bid will be awarded the property.

The judge determines and specifies the details of each online auction in the notice of sale. In all cases, the auction is finalized with the payment of the balance due (minus the deposit).

Anyone can take part in a judicial auction (Art. 571, par. 1 and 579, par. 1 of the Civil Procedure Code). except for a number of particular figures, such as the enforced debtor (who is subject to enforcement action for the satisfaction of a debt according to Art. 579 of the Civil Procedure Code).

The other persons prohibited from participating in the auction are those listed in Article 1471 of the Civil Code, namely:

  • Administrators of state property, municipalities, provinces or other public bodies, with respect to the property entrusted to them.
  • Public officials (e.g., notaries, lawyers, bailiffs, registrars) with respect to goods sold through their own activity.
  • Persons who, by law or act of public authority, are administering the property of others (e.g., parents with respect to property owned by minor children).
  • Agents with respect to the goods they have been instructed to sell, unless the principal has expressly authorized them or the purchase shows no conflict of interest with the principal. The purchase ban for such persons is relative, only applying with respect to the assets entrusted to them.

There are specific prohibitions for parents or guardians with respect to the assets of minors or those under conservatorship. Those who violate these rules risk the nullification of the purchase. However, there are some exceptions: a spouse in a condition of legal community of property, a debtor's child (if the debtor is living) and a partner in a company, who are allowed to participate under certain conditions.

Foreigners who are EU citizens and non-EU citizens with regular residence permits can also participate in auctions. On the other hand, non-EU foreigners not residing in Italy cannot participate in auctions from abroad, unless there is a condition of reciprocity between Italy and their home country (thus only if an Italian citizen could participate from abroad in an auction in that country).

According to Article 579 of the Civil Procedure Code, participation in a judicial real estate auction can take place:

  • Personally
  • By means of a notarized special power of attorney, whose assignee must be a registered lawyer (the notarized power of attorney is necessary in the case of bids made by more than one person)
  • By an attorney acting on behalf of a buyer to be named subsequently (Art. 583 of the Civil Procedure Code).

Someone who wishes to participate in an auction must send an irrevocable bid for purchase to the Ministry of Justice by the deadline specified in the notice of sale.

The mode of bidding, online or traditional, varies depending on the mode of sale chosen:

  • Online mode. Bid submission is done through a web-based form set up by the Ministry called "Electronic Bid," available on the platform of the Sales Manager. On Spazioaste.it, to make a bid, simply click "Submit Bid" on the page of the property you are interested in. It is then necessary to fill out the application following the Ministry-provided template and include all the required details such as (but not limited to) personal identification data, the lot number and amount of the deposit, as stipulated in Article 12 of Regulation No. 32/2015.
  • Traditional (paper) mode. To participate in an auction, it is necessary to deliver the bid in a sealed envelope to the assigned professional at their office, unless otherwise specified in the notice of sale.

In both cases, in order to participate in a judicial sale, it is essential to have paid the deposit, the amount of which is determined in the court order delegating the sale.

The right to view the property at auction is guaranteed by law. Pursuant to Article 560 of the Code of Civil Procedure, the debtor must allow the property to be visited by potential buyers in a manner determined by the court.

To book a visit, simply log on to the advertising site or the Public Sales Portal, select the page for the property you are interested in, click on the "Schedule property visit" button and fill in the fields in the request form.

The judicial custodian assigned will arrange the appointment in accordance with the timelines and procedures set forth in the order delegating the sale.

The only immediate cost of participating in a judicial auction is the stamp duty of €16 for submitting a bid, whether in paper form or online. Only the winning bidder must bear the charges and expenses related to the transfer of the property.

Transfer costs include registration, transcription of the deed of sale, cadastral ownership updating and, in some cases, fees for the cancellation of encumbrances, costs which are incurred either by the legal proceedings or by the winning bidder, as specified in the notice of sale. The winning bidder is obliged to cover half of the expenses of the delegated professional according to Ministerial Decree No. 227/2015.

Indirect taxes, such as registration tax or VAT, may be applicable depending on the enforced debtor and the type of property. There are tax breaks for a buyer who qualifies as a "first-time" buyer or for IAPs (professional agricultural entrepreneurs), which require a specific declaration made within specified deadlines.

There may be additional costs to regularize the property's situation with respect to construction permits, for example:

  • Charges for zoning regularization of the property
  • Charges for the issue of the energy performance certificate (E.P.C.), conformity of installations as well as the Certificate of Town Planning Use Class
  • Condominium fees and charges
  • Fees for amnesties

The successful bidder's deposit is the only one retained as a down payment to be deducted from the full payment, while all other deposits paid by other bidders are reimbursed in full.

The method of repayment is the same as that by which the deposit has been paid (bank transfer, cashier's check).

Deposits paid by those who could not participate in the auction for any reason are also returned.

It is mandatory for the successful bidder of a property at judicial auction to pay the amount specified in their bid within the time limit specified in the order of sale (Article 585 of the Code of Civil Procedure) or in the irrevocable bid. This deadline is binding and failure to meet it will result in forfeiture of the status of winning bidder. The deadline for payment is not deferred during bank holidays.

If necessary, the buyer can apply for a mortgage, which is granted only once the awarding of the property is final. If the property is not purchased, the loan is not disbursed.

According to Article 587 of the Civil Procedure Code, if payment is not made within the time limit, the court declares the forfeiture of the status of winning bidder, imposes a fine from the deposit paid, and the auction is repeated.

Once the auction is concluded, the highest bidder becomes the provisional auction winner, a condition which becomes final upon settlement of the price within the stipulated time. However, becoming the definitive auction winner does not yet confer actual ownership of the property. It is necessary to wait for the judge to issue a decree of transfer that is equivalent to a notarial deed, transferring ownership of the property (Art. 586 of the Civil Procedure Code).

This decree voids previous mortgage registrations and encumbrances, giving the purchaser an enforceable title and deed to the property. If the property is occupied, the winning bidder may request that it be vacated through an injunction contained in the decree. This process requires legal assistance and follows the prescribed eviction procedures (Art. 605 and following of the Civil Procedure Code).

The release order, on the other hand, is handled by the legal custodian under the supervision of the court, without the need for legal assistance and eviction procedures, in the interest of the auction winner and at no expense to the latter, according to Article 560 of the Code of Civil Procedure.