Italy: Supreme Court rules on notary liability and mortgage cancellation

In Italy, a legal distinction exists between the extinction of a mortgage debt and the formal cancellation of the mortgage from real estate registries. While paying off a loan terminates the debt, the public lien remains on the property until a formal cancellation procedure is completed. Failure to clear these records can obstruct the sale of a property, as potential buyers may be deterred by the visible encumbrance.

Regarding professional liability, the Italian Supreme Court (Corte di Cassazione) has ruled that a notary is not held responsible for verifying the truthfulness of a seller's claims concerning a mortgage that has been declared extinct, provided the mortgage is already visible in the public registries. In a specific case involving a fraudulent bank certificate provided by a seller, the Court upheld that the notary is not required to investigate the authenticity of such declarations when the mortgage is already a matter of public record.