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Preliminary sale and purchase agreement null if the collateral guarantee is lower than the deposit

According to the Italian Supreme Court (decision no. 19510/2020 dated 18 September 2020), the preliminary sale and purchase agreement regarding a real estate building under construction is null and void if the collateral guarantee, to be provided by the vendor to the purchaser according to art. 2 of Legislative Decree no. 122 of 20 June 2005, has been issued for an amount lower than the sums paid by the purchaser as a deposit without the works having been completed.

In fact, in case of sale of real estate building under construction, Article 2 of Legislative Decree no. 122 of 20/06/2005 provides that the builder, when the preliminary contract is entered into, is obliged to issue a collateral guarantee for an amount equal to the deposit paid by the purchaser under penalty of nullity of the contract.

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