Real estate exchange

SURETIES
Guarantees Similar to Contracts

REAL ESTATE EXCHANGE
NATIONAL LEGISLATION
The exchange contract is an agreement between two or more parties, involving the reciprocal transfer of goods or other rights from one contracting party to another, governed by Articles 1552–1555 of the Civil Code.
This type of contract is among those where the transfer of ownership or a real right of enjoyment over the property does not occur immediately, and it is subject to the legal framework of the aforementioned Law 210/2004.

GENERAL OVERVIEW
For the validity of an exchange contract involving an existing item for a future one, it is essential to agree on the exchange of items owned by both parties.
The contract for transferring ownership of land in exchange for a building or part of it, to be constructed on that land by the transferee, shares the legal nature of an exchange contract of a present asset for a future one.
In a real estate exchange, the landowner sells the buildable land to a company, agreeing to receive real estate units as consideration.
The landowner can protect themselves by securing a surety bond from the purchasing company, ensuring the delivery of the real estate units.

CONTENT AND LIMITATIONS OF THE GUARANTEE
Typically, the bond is issued for a period corresponding to the timeframe set for the signing of the transfer deed of the promised property (final deed), with automatic renewal.
Regarding guarantee conditions, those set out by Law 210/2004 and its implementing decree apply (see the previous sheet).

Type
Contract Guarantees

Category
Similar to those for public works contracts.

Common Applicant
A construction company that commits to transferring real estate units in exchange for the value of the land received.

Common Beneficiary
An individual who sold the land in exchange for a future portion of real estate.

Usual Initial Duration
Equal to the period set for signing the transfer deed of the property.

Extensions
They are foreseen.

Special Clauses
Definitive loss, inoperability of the guarantee for penalties or suspensive conditions. Specific text issued by the guarantor company.

Specific Documentation to Obtain
Similar documents required for the guarantee protecting the financial rights of real estate under construction.