italian rental law

12 Dec italian rental law

There are mainly three types of business leases: ■     leases regulated by the mandatory rules contained in Law no. 431 of 9 December 1998, which regulates leases of residential properties; ■     Law Decree no. History. s/he has to move to another country or city for employment), but a disdetta - a registered letter with at least six months notice - must be provided. What does it guarantee? 10.6      Does the landlord and/or the tenant of a business lease cease to be liable for their respective obligations under the lease once they have sold their interest? 392/1978 provides that only the tenant can be granted an early termination right; such a right can be granted to the landlord only in major leases. Davide Braghini 208 of 28 December 2015, which regulates financial leasing of residential properties; and. There are two types of contracts in Italy: The standard contract allows the landlord and tenant to decide the terms, including rents. Share and protest to the Italian embassy in DC ■     The Italian Civil Code (Royal Decree no. In addition to that, there are regional protocols in place for which we recommend you consult the Region official website of reference. 6.3        Is there any change in the sources or the availability of capital to finance real estate transactions in your jurisdiction, whether equity or debt? 11.1      Please briefly describe the main laws that regulate leases of residential premises. 131 of 26 April 1986) and to mortgage and cadastral taxes (“imposta ipotecaria e catastale”). Book the Best Vacation Ever – Rent a Villa in Italy. Only EU legislation may be relevant to real estate in Italy. A preliminary contract by which the parties undertake to sign a sale and purchase contract can be registered in order to grant priority to the future title of the promissory purchaser; however, the effects of the registration are limited to three years. In many cases a notary is engaged to conduct a search in the land registries and certify the title of the seller and any existing encumbrances on the property. ■     The various legislation regulating the cadastral system, which maps all Italian real estate properties (Royal Decree no. If so please briefly describe including price/compensation mechanism. Rents may initially be freely negotiated, but may not be increased after the initial 4-year contract by more than 75% of the cost of living. There is still a limited number of transactions where the parties agree to replace the seller warranties with Warranty & Indemnity Insurance. Registration tax applies on a fixed nominal basis in case the transaction is subject to VAT. First registration means the occasion upon which unregistered land or rights are first registered in the registries. In addition, execution in the presence of a notary is required to file the relevant contract in the land registries (and, for mortgages, for the validity of the title). 10.3      What are the typical provisions for leases of business premises in your jurisdiction regarding: (a) length of term; (b) rent increases; (c) tenant’s right to sell or sub-lease; (d) insurance; (e) (i) change of control of the tenant; and (ii) transfer of lease as a result of a corporate restructuring (e.g. If so, can shares be appropriated when a borrower is in administration or has entered another insolvency or reorganisation procedure? 152 of 3 April 2006) is also delegated to local agencies and legislation, organised at the Regional and Municipality level. When registered, title is enforceable against bona fide third parties with a potential interest in the real estate. On what grounds can I terminate the tenancy agreement and evict tenant from the property? Different rules (in particular regarding information duties and enforcement in case of payment default) apply to loans to individual persons acting as ‘consumers’ and corporate entities. In particular, in 2014, the City of Milan introduced, with the local planning system, the obligation to obtain, for all buildings with more than 50 years, the certificate of static suitability (“CIS – Certificato di idoneità statica”), which is becoming mandatory in case of sale of the property. merger); and (f) repairs? Firenze (Firenze) - Via Trieste - Elegant apartment in a small building. As might be expected, the market now shows a strong contrast between 'old' contract rents (which have not kept pace with inflation), and 'new' contract rents (where inflation expectations tend to be 'front-loaded' into high rents). In some cases the seller engages consultants to conduct a pre-sale technical assessment of the property, aimed at assessing its compliance with zoning, building and environmental regulations, compliance with the cadastral data, and investigating any existing encumbrances. 1.1        Please briefly describe the main laws that govern real estate in your jurisdiction. The Italian Civil Code provides general regulation of loans, while the Unified Banking Act (Legislative Decree no. Keep right and overtake on the left. Furthermore, if the seller caused any contamination of the property, it remains liable for any remedial actions prescribed by environmental laws and regulations and any damages caused by such contamination. The relevant energy performance certificate issued by authorised consultants must be disclosed to the purchaser and to the tenant of a property. The important thing to know though, is that the law for American tourists driving in Italy DOES require that you have an IDL. 8.4        What minimum formalities are required for real estate lending? The extrajudicial proceedings may only be followed if agreed upon by the parties. 8.7        What actions, if any, can a borrower take to frustrate enforcement action by a lender? eval(ez_write_tag([[300,250],'globalpropertyguide_com-medrectangle-3','ezslot_1',126,'0','0'])); Landlords are forbidden to request payment in advance amounting to more than three months' rent, and the same applies to security deposits. As to occupancy and seismic compliance, the certification of technical consultants engaged by the developer in most cases replaces the need of a certification by the Municipality, while fire prevention compliance needs to be certified by the local Fire Brigade. Such rates are reduced by 50% in case of transactions involving real estate funds or SIIQ (Italian REITs). In case the seller omitted to pay any applicable property tax or transfer tax, the tax authorities may enforce a lien on the relevant property, which, in some cases, may prevail over a mortgage. 13.1      Please briefly explain the nature and extent of any regulatory measures for reducing carbon dioxide emissions (including any mandatory emissions trading scheme). 206 of 6 September 2005, which regulates contracts granting a time share right on a real estate property. In some regions of North-Eastern Italy a somehow different registration system applies (“sistema tavolare”), which is managed by the local provincial authority. What happens to a tenant if he fails to pay his rent for like two months and his Landlord take him to court but the tenant was unable to turn up in court. Please give examples. Traditionally, the only obligation of the landlord in the United States was to grant the estate to the tenant, although in England and Wales, it has been clear since 1829 that a Landlord must put a tenant into possession. But it also allowed landlords to dislodge tenants in order to sell their properties after four years, which has led to a strong shift away from the rental sector (no longer seen as profitable) towards owner-occupation. 122 of 20 June 2005, which regulates the acquisition by individuals of properties under development. 5.2        How do the owners of registered real estate prove their title? Contributions under (a) and (b) are often replaced by the undertaking of the developer to carry out the relevant infrastructure works. @ 2004-2020 Global Property Guide. Graph of house price trends in Italy, Compare countries on 4 financial dimensions, Contributing is easy and it works for you, Duration until completion of service of process, In order to sell the property, provided the landlord has no other apartment except where he resides, For the landlord's personal use, or for the use of family members, To use the property for public, cultural, and religious purposes (provided that he offers the tenant another apartment), To renovate the property due to severe structural damages, If the tenant owns another apartment in the same municipal district, If the tenant has not been living in the apartment permanently. The offer of flexible office spaces and co-working spaces is increasing significantly. 4.4        What rights in land are not required to be registered? 392 of 27 July 1978, which regulates leases of urban properties; ■     Law no. These laws provide the framework for rental contracts, including the duration of tenancy, rent and rent increases, as well as dispute settlement. The tenant may choose to terminate the contract at an earlier date for legitimate reasons (i.e. Italian law is strongly pro-tenant Because of strongly pro-tenant landlord & tenant laws, the rental market is shrinking. Some operators are experimenting with new forms of short-term contracts based on hotel and tourist accommodation legislation. In Italy, short-term rentals under one month may have rental contracts. A mortgage over real estate must be granted in a notarial deed and is only valid when registered with the land registry. Negotiations usually occur between representatives from both of the parties, assisted by lawyers and real estate advisors. 11.3      What would typical provisions for a lease of residential premises be in your jurisdiction regarding: (a) length of term; (b) rent increases/controls; (c)the tenant’s rights to remain in the premises at the end of the term; and (d) the tenant’s contribution/obligation to the property “costs” e.g. To complete your registration, please click the verification link sent to: If you do not receive an email within 15 minutes, please check your spam folder or contact us for help. In others, subletting is acceptable as long as the property is not leased to third parties in its entirety. In principle, accommodations provided to an employee by an employer are a taxable benefit in Italy. However, these systems are inspired by the same planning law system. What would be the scope of these? 152 of 3 April 2006 delegates the Regional Authorities to maintain a register of sites interested by an environmental clean-up procedure. However, in some cases the broker can be unrelated to either the purchaser or the seller. Consumers may find they have more rights in places where the tourism industry is strong and vacation rentals more common. All Rights Reserved. Buyers may obtain information on the permitted use of a land/building, building permits and local public constraints through access at the local Municipality offices. 5.5        Are there restrictions on public access to the register? 12.9      In what circumstances (if any) is environmental clean-up ever mandatory? Transfer of title has to be formalised in a public deed before a notary public. In particular, the Ministry of Culture and other local agencies have a right of first refusal in case of transfer of a property which was declared of historical, architectural or landscaping interest; accordingly, the deed of sale must be notified to the relevant authorities, which normally have 60 days to exercise the right of first refusal. 40/2020) includes measures that are intended to assist businesses by providing loan guarantees, government assumption of non-market risks, and certain targeted tax relief. Foreign equity coming from Sovereign Funds, pension funds and private opportunistic funds have been a main driver of real estate transactions in Italy in the last five years. For this type of contract, landlords ask for a deposit which can be returned in full … Also, any sale of property has to be executed before a notary, who has a duty to perform a legal check on the title. 12.10                Please briefly outline any regulatory requirements for the assessment and management of the energy performance of buildings in your jurisdiction. You can expect that your comment will be published within 24 hours. to apportion risk, to give information)? The buyer is responsible for paying the purchase price and any applicable transfer taxes and paying its portion of the broker fees (if any). If not, what additional information/process is required? The draw of the money under the facilities agreement must also be recorded in a notarial deed, in order to have a direct enforcement title against the borrower, without having to conduct proceedings in court in order to obtain an enforcement title. The tenancy should not be shorter than three years, with an option for renewal for two more years.eval(ez_write_tag([[300,250],'globalpropertyguide_com-medrectangle-4','ezslot_9',123,'0','0'])); These "special" contracts have low rent ceilings, and rent increases cannot exceed the ceiling set by the agreement between the associations. However, they are managed by the same governmental agency (“Agenzia del Territorio”) and access is unified through a national virtual portal. The preliminary contract contains the transaction’s terms and conditions, including: (i) the object of the sale; (ii) the purchase price; (iii) any conditions precedent; (iv) the timing for closing; (v) the payment of a security deposit (“caparra confirmatoria”); and (vi) the seller representations, warranties and indemnities. Any buyer or other interested person may obtain – by a search of the registry online, subject to payment of a consultation fee – any information on title and any registered encumbrances and also copies of the relevant notarial deed. Email the region with your CIR code to submit tourist flux numbers. The following are sufficient reasons:eval(ez_write_tag([[300,250],'globalpropertyguide_com-box-4','ezslot_8',124,'0','0'])); Subletting is prohibited under "special" contracts. 5.4        Can compensation be claimed from the registry/registries if it/they make a mistake? 7.1        What (if any) are the minimum formalities for the sale and purchase of real estate? Gianni, Origoni, Grippo, Cappelli & Partners, Gianni, Origoni, Grippo, Cappelli & Partners, The International Comparative Legal Guides and the International Business Reports are published by: Global Legal Group, This guide is the only example I know of personally in which a contribution on our part has resulted in requests from colleagues in other jurisdictions, notably England and from potential clientsFinn Myhre, Contributor - Bugge, Arentz-Hansen & Rasmussen, Norway, © 2002-2020 Copyright: | Our Privacy, Register with us FREE After the second four years, the landlord can terminate the contract by serving six months' notice, and need not invoke specific grounds. Ownership of real estate is evidenced by the corresponding public deed of sale and purchase or other contracts granting a title on real estate. Representations and warranties are mainly used to apportion the risk between the seller and the buyer. However, a reduced rate of 10% applies to some residential and instrumental buildings; a further reduced 4% rate applies to the sale of residential properties which become the primary house of the buyer. Be aware of this scam . EU Directive no. Legislative Decree no. (+44) 203 102 9650 DR CLAUDIO DEL GIUDICE - Italian lawyer (Avvocato) - in London since 1992. The tax status of an individual is the starting point for applying the correct taxation in Italy. However, only major contaminations that were ascertained by or denounced to the competent authorities are recorded in such registers. The following laws regulate the lease of residential business premises: ■     Law no. ICLG - Real Estate Laws and Regulations - As indicated in question 12.4, in many cases permits and licences can be replaced by a certification of a technical consultants. Is there a public register of contaminated land in your jurisdiction? Information on ownership can be accessed electronically through a national portal. 392/1978; and. However, title insurance is becoming used to secure the acquisition of small properties in cases where the purchaser is not willing to conduct a due diligence on the title. Who is liable? 8.8        What is the impact of an insolvency process or a corporate rehabilitation process on the position of a real estate lender? After that, the buyer can register the title with the corresponding land registry to protect the title against third parties. If this is the case, the creditor, in the insolvency process, will see his credit satisfied in a preferential manner compared to unsecured creditors. 3.3        Is there a split between legal title and beneficial title in your jurisdiction and what are the registration consequences of any split? In case bankruptcy of the borrower is declared within 10 days of the creation of the mortgage, the mortgage can be challenged by the bankruptcy officers. 262 of 16 March 1942), which regulates freehold title (proprietà), other rights on real estate assets, how to acquire and transfer real estate properties and related rights, co-ownership on real estate properties, registration of title in the land registry and also contains the general regulations for sale and purchase contracts, leases and mortgages. ■     The Italian Navigation Code (Royal Decree no. If you rent a car and get fined on this trip they will send an agency after you and there will not only be the fines and the fees from the rental agency but also late fees as well making the fines much more expenisve. The contract can contain provisions allowing either party to terminate the lease in case of material breach of contract by the other party. According to Italian Law, when a party of a contract with corresponding obligations does not fulfill its obligations, the other party may, at its discretion, ask the fulfillment or termination of the contract, saving, in both cases, the right to seek the damages. In addition, in some cases it is possible to anticipate the effects of registration by registering a preliminary sale and purchase contract or filing of a judicial suit aimed at ascertaining the title on a property; in these cases, when the title is actually transferred or ascertained, the effects date back to the time of the first registration. In such cases where it is allowed, the tenant will be liable for any damages caused by other persons granted the use of property. Italian land registries are organised and maintained on a provincial basis. Villas in Italy just can’t be beat. The competent land registry issues an online excerpt with all relevant facts of the property (titleholder and any registered third-party rights). Loans for minor transactions often do not contain any provisions supplementing those provided by the law for mortgage loan, but often the lender seeks additional protection requesting a bank deposit, a personal guarantee by the borrower or any borrower related person and a life and disability insurance on the borrower. There are not different provisions regarding lending to non-resident persons, but different formalities may apply (e.g., a non-resident person shall obtain, in most cases, an Italian tax ID code, the notarial security documents to be filed in Italy must be executed in Italian or translated into Italian by a … In case the tenant assigns the lease, it remains jointly liable with the assignee for any unpaid costs related to the period before the assignment. The landlord can terminate the lease early in cases where the tenant is in default of payment of the rent (even for only a one- month instalment) by commencing special proceedings (“sfratto per morosità”). VAT is payable subject to option by the seller for all sales or purchases of instrumental real estate when the transaction takes place in the framework of a business activity. A notary must be involved for the execution of the deed of sale and purchase or the lease agreement (if the term of the lease exceeds nine years). However, these don’t need to be registered with the Revenue Agency, like transitory contracts ( contratto transitorio). 8.6        Under what circumstances can security taken by a lender be avoided or rendered unenforceable? Recent leases of grade “A” properties often contain a best efforts provision by the tenant to maintain energy efficiency policies and to provide information to the landlord on its energy consumption levels. Transactions on commercial centres and shopping malls have somehow slowed down, as investors are focusing more and more on those commercial centres that are modernising their business model. What are the main sources of capital you see active in your market? The protection of a real estate lender depends on the priority in ranking of the secured loans and this priority is subject to the registration principle, unless mutually agreed between the borrower and the lender. Those fines just get worse when you’re late in paying them, which you’ll certainly be since the ticket goes to the rental car company first before it eventually makes its way to you. Buyers also have access to public registries (land registries and cadastral registries) in order to make their own assessment on the title of the seller. Can a buyer obtain all the information he might reasonably need regarding encumbrances and other rights affecting real estate and is this achieved by a search of the register? This requirement is expected to become mandatory throughout the country. Would any such guarantee or warranties act as a substitute for the buyer carrying out his own diligence? The law of 1998/431 has introduced tax incentives for landlords who opt for these "special" tenancy contracts. These remunerations are freely negotiated with the service providers and may be determined as a percentage of the purchase price or a fixed remuneration. What matters must be disclosed? Obtaining information on the actual status of a property and its environmental compliance is usually more complicated and collaboration by the owner is required. 42 of 22 January 2004) provides for limitations on the ownership, transfer and refurbishment of real estate assets having historical value and those characterising or having a significant impact on the landscape. As a general rule, upon expiry of the initial six-year (or nine-year) term only the tenant may avoid the automatic renewal of the lease. 10.5      In what circumstances are business leases usually terminated (e.g. The seller is also liable to compensate the buyer for the damage suffered and the damage resulting from the defects of the sold property. Legal advisors provide legal support and draft the legal documentation in major transactions, while in minor transactions it is common for the parties to engage directly with the notary. It must be taken into account that in most cases that valuation will not be consistent with the open market value of the land at that time. 12.1      What are the main laws which govern zoning/permitting and related matters concerning the use, development and occupation of land? The main applicable real estate legislation is: ■     The Constitution of the Italian Republic, which states the right to a private property, subject to possible limitations for public interest. Italian copyright law also provides for certain exploitation rights over non-works. Other securities can also be challenged in case of bankruptcy, if it appears that the lender was aware of the insolvency of the borrower. Corporate guarantees are sometimes requested by lenders if the borrower is using SPVs. In this case, the title on the assets is recorded in the name of the trustee, indicating his role and the fact that the property shall be managed in the interest of a beneficiary; this annotation, however, can have a maximum duration of 90 years. Therefore, the systems have common institutions and regulations. 9.4        Are transfers of real estate subject to VAT? Each party bears the costs of its own transaction advisors. Refurbishment of existing buildings can require a building permit if the permitted use of the building is affected, or its total surface or its aspect are materially changed; in most cases, however, construction works can be commenced without requesting a permit, provided that the relevant project is notified to the local authorities before the works are commenced. 1.3        Are international laws relevant to real estate in your jurisdiction? A charge over income arising from lease tenants is usually notarised, but notarisation is not mandatory. Tenancy in Italy is regulated by L.n.392/1978 (the 'Fair Rent' Act), L.n.431/1998, and the Constitution. Are there any exemptions? However, the term can be delayed considerably in case the opinion of different commissions, agencies or entities is required (e.g., opinion on the landscaping impact of the project, opinion of the local agency of the Ministry of Culture in case of historical buildings, opinion of the Fire Brigade, etc.). 11.4      Would there be rights for a landlord to terminate a residential lease and what steps would be needed to achieve vacant possession if the circumstances existed for the right to be exercised? ■     The Unified Building Act (Testo Unico dell’Edilizia – Presidential Decree no. Secondary markets are highly considered for logistic, tourism and hospitality assets. The loan documentation will also contain both financial covenants (loan to value, debt service cover) and non-financial covenants (obligations to maintain the asset in good state of repair or disposal limitations) to be granted by the borrower in order to ensure that the value of the asset is maintained. De Tullio Law Firm – Italian Inheritance and Real Estate Law Firm. ■     Legislative Decree no. 3. Driving licences issued by any of the EU Member States are valid throughout the European Union, including Italy. 2.1        Are there legal restrictions on ownership of real estate by particular classes of persons (e.g. Those relating to tax should be listed in response to questions in Section 9. To offer a short-term rental in Rome one must ensure they are in accordance with national regulations before they: Register at the online SUAR of the city of Rome. The “Cure Italy Decree (released on 17 March 2020 and converted into Law No. Public access to the register insolvency process or a legal italian rental law of their attractiveness to?! Land diverges from the defects of the house is still a limited number transactions. The purchase price or a corporate rehabilitation process on the protection of historic monuments in jurisdiction. 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