New Security For Real Estate Financings

Law Decree No. 59 dated 3 May 2016 introduced a new security instrument for real estate financings which entails secured creditors to satisfy their claims against the mortgaged assets without the need of going through a proper foreclosure proceeding

Scope of the New Security Arrangement

The new tool is available for any real estate financings provided to Italian companies by a bank or other entities authorised to perform lending activities in Italy.

The parties can enter into an agreement providing for the automatic transfer of real estate assets to the secured creditor or any of its affiliates conditional upon the occurrence of a payment default by the debtor. The security can be given by the principal debtor or any third party security provider. The secured creditor will be required to reimburse to the security provider any difference between the certified value of the real estate assets subject to transfer and the outstanding amount of the debt.