On September 12, 2014, the Italian government enacted Law Decree
no. 133, known as "Sblocca Italia" (the
"Law Decree"), which introduced certain measures aimed at
boosting, inter alia, the Italian real estate sector.
The Law Decree must be converted into law within 60 days from
its publication in the Italian Official Gazette on September 12,
2014; otherwise it will cease to be effective and will be
considered as never enacted. The Italian Parliament could carry out
amendments to the Law Decree during the conversion process.
Italian Tenancy Law
Italian commercial property lease agreements are regulated by
Law no. 392 of July 27, 1978 (the "Tenancy Law"). The
Tenancy Law contains various mandatory provisions in favor of the
tenant that may not be disregarded. Any departure from these
provisions to the benefit of the landlord, if challenged by the
tenant, can be declared null and void and automatically replaced by
the relevant mandatory provision of the Tenancy Law.
The Law Decree allows the parties to a property lease agreement
to depart from the mandatory provisions of the Tenancy Law in those
agreements where the annual rent is greater than €150,000. As
a result, large Italian property lease agreements now have the same
type of flexibility seen in other European markets.
Some of the main provisions of the Tenancy Law that were
previously mandatory and now can be departed from in large property
lease agreements are:
Minimum Duration and
Renewal. Minimum duration of six years, with automatic
renewal for additional minimum six-year periods at each
Limitations to Landlord Exit
Rights. Landlord is not entitled to withdraw from a lease
outside of expiration. At the expiration of the first term,
withdrawal is limited to where (i) landlord intends to occupy
premises for its own use or (ii) it intends to renovate the leased
Mandatory Tenant Exit
Rights. Tenant is always entitled to withdraw from a lease
in the case of "serious reasons" ("gravi
Increases/Indexation. Cap at 75 percent of variation of
National Institute for Statistics ("ISTAT") index for
leases having the minimum duration (i.e., 6+6 years). Cap at 100
percent of variation of ISTAT index for leases that exceed the
Sublease and Assignment of
Contract. Tenant has the right to sublease or to assign a
contract within the scope of the lease or sale of relevant going
No more than 50 percent of contract registration costs are
chargeable to tenant.
With respect to lease agreements where the tenant is a
retailer—i.e., it carries out an activity that involves
direct contact with clients and consumers ("contatti
diretti con il pubblico degli utenti e dei
consumatori")—the following additional previously
mandatory provisions of the Tenancy Law may now be departed from in
large Italian property lease agreements.
Tenant has the right to a goodwill indemnity equal to 18 times the
annual rent or 36 times the annual rent if the immediately
subsequent re-letting (within 12 months) is to a tenant operating
in same product category.
Tenant has preemption rights in the case of the sale of the
property as well as re-letting of the property at the same terms
and conditions of third-party purchasers or tenants.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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