Answer ... General commercial leases: Articles 1615 to 1627 of the Civil Code set out the specific provisions that apply to commercial leases, known as contratti di affitto; together with the general provisions of the Civil Code on contractual obligations, they form the body of law that applies to commercial leases.
These statutory provisions deal with the basic obligations of the parties, which in the case of the leaseholder include the obligation not to change the economic purpose of the property (eg, turning a restaurant into a dental practice). It also apportions cost for repairs between the parties, with the landlord having to bear the cost of repairs beyond normal wear and tear.
Such statutory provisions – particularly those that are there to protect the tenant – cannot be derogated from by the parties, except in specific cases such as leases with a yearly rent of more than €250,000.
The minimum duration for non-residential leases – other than leases of hotels – is six years. After the first six-year term, the lease is automatically renewed for a further six years unless the landlord terminates it for one of the following reasons:
- The landlord or a close relative intends to use the property as his or her home;
- The landlord or a close relative intends to run his or her own business out of the property; or
- The landlord intends to tear down the property in order to build a new one or to do a deep renovation.
As with residential leases, it is possible to stipulate a transitory commercial lease that lasts for less than six years. The transitory use must be objective (eg, office space needed for an election campaign) and must be specified in the agreement.
It is also possible to grant a seasonal lease, under the terms of which the tenant can only use the property for a given number of months in each of the six years of the term.
Within the term of the lease, the landlord can only terminate for good cause (eg, rent arrears).
If the landlord wants the lease to come to an end after the second six-year term, it must give notice to this effect to the leaseholder 12 months in advance of the end of the lease; otherwise, the lease will tacitly renew.
The leaseholder can, at any time during the term of the contract, terminate it for ‘serious reasons’ by giving six months’ notice to the landlord.
As is the case with residential leases, the leaseholder has a right of first refusal on the sale if the landlord invokes the sale of the property as a reason to break after the first six years.
Unlike with residential leases, the leaseholder can sub-locate the property by merely putting the landlord on notice. The landlord has 30 days to object to the sub-location by raising ‘serious concerns’ (eg, the risk of insolvency) relating to the sub-leaseholder.
Notably, at the end of the lease of a retail unit, the landlord must pay the leaseholder an amount of money on account of ‘lost goodwill’ associated with the location of the business in the leased premises, unless the leaseholder was in arrears with the rent or terminated the lease on its own volition.
The amount that the landlord must pay is equal to 18 months’ rent; but if another business that is the same as the business of the outgoing leaseholder is carried out on the premises, the landlord must pay a further 36 months’ worth of rent by way of indemnity.
Commercial rent can be pegged to the Italian official inflation rate, but only in the ratio of 75% of the official rate per year.
Hotel leases: The statutory provisions that apply to the lease of hotels depart from the general rules on commercial leases in the following respects:
- The minimum duration of the lease is nine years, with tacit renewal for another nine years, and the landlord must give notice 18 months before the end of the term; and
- The indemnity for loss of goodwill is equal to 21 months’ rent.
Leases with a yearly rent in excess of €250,000: The parties to a lease of a commercial property (including hotels but excluding buildings of historical interest) that stipulates a yearly rent in excess of €250,000 can freely negotiate all terms of the lease derogating from the provisions of the Civil Code outlined above.
The only provisions that cannot be derogated from are those setting out the apportionment of maintenance costs between landlord and tenant.
Leases of entire business: Italian law contemplates the affitto di azienda – that is, the lease of an entire business branch as a going concern, including the premises it is carried out from – as a separate form of contract to the lease of commercial properties.
When negotiating the parts of the contract for the affitto di azienda that deal with the premises, the parties can derogate from the provisions of the Civil Code that apply to commercial leases.