"I Lost My Deposit — Can I Get My Money Back?" — Italy's Supreme Court Protects Homebuyers from Developers

The Case in Plain Terms

A couple signs a preliminary sale agreement (contratto preliminare) with a property development company to buy a home. They pay a deposit of nearly €73,000 on a total purchase price of roughly €124,500 — more than half the total. The final deed never gets signed, through the buyers' fault. The developer keeps everything.

The couple sues. The lower courts reduce the penalty, but the matter reaches the Supreme Court (Corte di Cassazione) — passing through the Court of Justice of the European Union along the way.

The outcome: the Supreme Court rules in the couple's favour.

Why This Ruling Matters for Anyone Buying Property in Italy

When signing a preliminary sale agreement (the so-called compromesso), there is almost always a clause stating, more or less: "if the buyer pulls out, the seller keeps the deposit." This clause is routinely presented as standard, normal, non-negotiable.

In reality, that is not always the case.

The Cassazione — with judgment no. 21771/2026 — establishes an important principle: when the seller is a developer or property company (a "professional") and the buyer is an ordinary person (a "consumer"), that clause can be declared void for being unfair, if the amount to be retained is disproportionate to the total price.

What Is an "Unfair" Clause?

The term may sound technical, but the idea is straightforward: a contractual clause is unfair (vessatoria) when it creates a significant imbalance between the parties — that is, when it imposes heavy obligations on the weaker party (the consumer) solely for the benefit of the stronger party (the professional).

Italy's Consumer Code (d.lgs. 206/2005, implementing EU Directive 93/13/EEC of 1993) presumes unfair, in contracts between professionals and consumers, any clause that requires the payment of a manifestly excessive sum in the event of non-performance.

Keeping nearly €73,000 out of a purchase price of €124,500 — 58% of the total — is excessive? According to the courts, potentially yes. And it is the judge's duty to assess it.

The Most Important Development: The Judge Must Intervene Even Without Being Asked

Perhaps the most significant aspect of the ruling concerns the judge's power — and duty — to act on their own initiative (d'ufficio).

Ordinarily, in Italian civil procedure, a judge decides only what the parties put before them. If a party does not raise the invalidity of a clause, the judge cannot generally do so spontaneously.

Here, however, the Cassazione — following the ruling already handed down by the CJEU in case C-320/24, which arose from this very same dispute — holds that:

the judge must independently assess the potential unfairness of a penalty clause, at any stage of the proceedings, including on remand, and even if the consumer never raised the issue.

The reason is the principle of effective consumer protection: the EU Directive requires that the weaker party be protected in a meaningful, not merely theoretical, way. If consumers had to know which procedural objection to raise, and precisely when, the protection would be illusory.

In plain terms: the judge acts as a safeguard even when the consumer does not know they should be asking for protection.

Earnest Money or Penalty Clause? A Distinction That Matters

It is worth clarifying a distinction that is often blurred in practice.

The earnest money deposit (caparra confirmatoria, art. 1385 of the Civil Code) is the sum paid at the time of the preliminary agreement: if the buyer does not proceed, the seller keeps it; if the seller backs out, they must return double the amount. In principle, it is a balanced mechanism.

The penalty clause (clausola penale, art. 1382 of the Civil Code) is a contractual provision fixing in advance the compensation owed in the event of non-performance. A court may reduce it if it is "manifestly excessive" (art. 1384 of the Civil Code) — and in consumer contracts, as this ruling confirms, it may even be declared void outright.

In the case decided by the Cassazione, the clause was structured as a penalty clause (not technically as earnest money), and it was this clause that underwent the unfairness assessment.

What Changes in Practice for Property Buyers

If you are about to sign a preliminary agreement with a developer or property company, these are the key points to bear in mind:

1. Read the deposit/penalty clause carefully. How much does the seller retain if you do not proceed? How does that compare to the total price? If it represents a significant proportion, it may be open to challenge.

2. "This is standard wording" does not mean it is valid. Quite the opposite: clauses drafted unilaterally by the professional are precisely the ones consumer protection law regards with the greatest suspicion.

3. If the dispute ends up in court, the judge is required to assess the issue even without you raising it. That said, it is still advisable to raise it explicitly, with the assistance of a lawyer.

4. The protection applies to preliminary agreements too, not only to the final deed. The Cassazione reaffirms: consumer protection legislation applies to the compromesso whenever it is entered into between a professional and a consumer.

The Legal Principle Stated by the Court

The Cassazione closes with a ruling intended to guide future courts:

"In the context of a preliminary real estate sale agreement concluded between a professional and a consumer, the clause reserving to the prospective seller, in the event of non-performance attributable to the fault of the prospective buyers, the sum received as a deposit is not exempt from an unfairness assessment, which the court is required to carry out of its own motion, in order to verify whether the clause creates a significant imbalance to the detriment of the consumer, by reason of its manifestly excessive amount."