There are different types of residential tenancy agreements in Italy, each with its specific characteristics.
If you have a property in Italy and would like to rent it out, if you are a tenant that is about to sign a residential tenancy agreement or a digital nomad looking to move to Italy, this Quickguide will help you understand:
Types of residential tenancy agreements in Italy
There are different types of residential tenancy agreements in Italy, and they differ from one another in important aspects such as rent price, duration or terms.
Residential tenancy agreement with freely determined rent
The main characteristics of this contract are:
- minimum duration of 4 years, renewable for an additional 4-year period (also referred to as 4+4);
- parties are able freely determine the rent price.
Contract terms are freely agreed between the contracting parties (except for the duration and renewal procedures). If the contract provides for a different duration (e.g., 3 years instead of a 4-year period) the duration clause is considered void. This does not affect the validity of the entire contract because the void clause is automatically substituted by law to a 4-year period.
The landlord may prevent the contract renewal only in specific cases established by law (e.g., personal use of the property by the landlord or family members, restructuring or sale of the property).
At the end of the second 4-year term the contract will be automatically renewed at the same conditions if the landlord does not communicate its intention to modify the terms of the agreement at least 6 months in advance.
Residential tenancy agreement with determined rent
This type of contract is less frequently used, and its main features are:
- minimum duration of 3 years, renewable for an additional 2-year period (also referred to as 3+2);
- the rent price is fixed between a minimum and maximum determined by local tenants’ and landlords’ associations.
The rent amount in this type of contract is usually lower than market value, but the landlord can claim tax reliefs. If the contract provides for a rent amount which is higher than the maximum determined by the agreement of tenants’ and landlords’ local associations, the clause will be deemed as void.
Additionally, parties should rely on the model agreement made available by a Decree of the Italian Ministry of Infrastructure and Transport.
Other types of tenancy agreements
Italian law has introduced other types of tenancy agreement which have a shorter duration than the two mentioned above. These contracts are:
- temporary tenancy agreement;
- tenancy agreement for university students;
- tenancy agreement for touristic purposes.
What should be in an Italian residential tenancy agreement
Under Italian law, residential tenancy agreements should take the written form. For this reason, verbal tenancy agreements are considered void.
A residential tenancy agreement should also include:
- the name of all involved parties;
- the property address and its accurate description;
- energy performance certificate;
The contract will usually provide how the rent is paid. There will also be an indexation clause which is pegged to the ISTAT (Italian National Institute of Statistics) consumer price index for blue and white-collar worker households. The indexation is usually set at 100% of the ISTAT index for residential tenancy agreements with freely determined rent, and no more than 75% of the ISTAT index for residential tenancy agreement with determined rent.
The contract will also include additional terms that, although not considered as mandatory, are nonetheless required to regulate the relationship between landlord and tenant. This may include the parties’ mutual obligations, the existence of a security deposit, whether the tenant can sublet the property and other conditions relevant to the contracting parties.
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Rights and responsibilities
The main rights and responsibilities of both the landlord and the tenant can be found in the Italian Civil Code and Italian Tenancy Law. Parties may deviate from certain responsibilities, but others are considered mandatory.
With regard to the landlord’s responsibilities, the Italian Civil Code (Article 1575) provides that the landlord is responsible to:
- provide the tenant a well-maintained property and in good repair;
- keep it in a condition to serve the agreed use;
- ensure the peaceful use of the property for the duration tenancy (e.g., by protecting the tenant from third party claims over the property).
It is the landlord’s responsibility to carry out all the necessary repairs, save for those that can be considered as minor repairs which must be carried out by the tenant (Article 1576). Parties can decide to derogate this provision.
About the tenant’s responsibilities, the Italian Civil Code (Article 1587) provides that the tenant should:
- take good care of the property and use it in accordance with the terms of the contract;
- pay the agreed rent price.
Usually, the tenant is not allowed to make any alterations to the property unless otherwise agreed in the contract or the alterations are approved by the landlord. Moreover, if the tenant has made improvements to the property, there will be no refund of costs or of the increased value unless the improvements were requested or allowed by the landlord.
Lastly, the Italian Tenancy Law grants the tenant with a preemptive right to buy the property if the landlord decides to sell it. In addition, if the tenancy agreement was not renewed at the end of first term (i.e., after the first 4-year period) because the property was damaged or needed immediate restructuring, the tenant has a preemptive right should the landlord decide to rent out the property after the restructuring.
Registration and security deposit
All tenancy agreements must be registered to the Italian Revenue Agency (Agenzia delle Entrate) within 30 days after being signed or after the start of the tenancy (if earlier). The registration of the contract can either be made by the tenant or landlord, and the registration costs are to be paid by both parties in equal measure. If the residential lease agreement is not registered within the indicated deadline, it will be declared null and void.
Regarding the security deposit, Italian law states that it should be no more than 3 times the monthly rent. The amount offered as a security deposit will produce interest if not otherwise agreed between the parties.
The security deposit will have to be returned at the end of the tenancy agreement. It is important to underline that the landlord cannot retain the security deposit in case of damages without starting a judicial proceeding. Indeed, the deposit can be retained only after a judge decides on whether or not damages have occurred during the tenancy agreement and in what amount. The same can be said in case of unpaid rent.
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