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INTERNATIONAL DISTRIBUTION INSTITUTE

INTERNATIONAL DISTRIBUTION INSTITUTE Avoiding legal constraints: domestic rules on commercial lease contracts, administrative rules requiring permits or licences for selling at retail level Venice, 18 may 2012. Law July 27 1978, n. 392 on urban real estate lease contracts

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INTERNATIONAL DISTRIBUTION INSTITUTE

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  1. INTERNATIONAL DISTRIBUTION INSTITUTE Avoiding legal constraints: domestic rules on commercial lease contracts, administrative rules requiring permits or licences for selling at retail level Venice, 18 may 2012

  2. Law July 27 1978, n. 392 on urban real estate lease contracts contains several mandatory rules in favour of the lessee Italian law on commercial lease contracts • Lease term: not less than 6 years/9 years (art. 27) • Automatic lease renewal for the same term (art. 28-29-31). • Renewal can be avoided by means of 12/18-month-notice: • By the lessor only if he intends to: • Live in the building • Conduct commercial activities in the building • Reconstruct or fully refurbish the building • By the lessee unconditionally.

  3. Italian law on commercial lease contracts • If intentions are not practiced within 6 months of the vacation of the building, the lessee has a discretional right to: • Have the contract restored; or • A penalty not exceeding 48 times the monthly rent. • Right of the lessee to compensation for the loss of goodwill at lease termination (art. 34): • 18/21 times the monthly rent; or • Double if the same the same activity (or alike) conducted by the lessee in the building is commenced (by anyone) within one year of the termination; • Not due only if the lease is terminated by/due to breach of contract by the lessee

  4. Italian law on commercial lease contracts • The lessee has the right to sublease and to assign the lease on condition that the relevant business (“azienda”) is leased or assigned (art. 36). • The lessee has a pre-emption right in case the lessor intends to sale the real estate (art. 38-39): • At the same sale terms and conditions; • With the right to re-purchase (“riscatto”) the real estate from a third-party purchaser. • The lessee has a pre-emption right in case the lessor intends to lease the real estate, at the same lease terms and conditions (art. 40).

  5. The lease of a business (“azienda”) is not subject to the mandatory rules as per Law 392/1978. The lease of a business • Definition of business (art. 2555 Civil Code): • A whole/complex; • Of goods/resources; • Organised by an entrepreneur/corporation; • To conduct its trade.

  6. The lease of a business • Usual composition of a lease of business skipping Law 392/1978: • Retail license; • Lease contract (real estate); • Fixtures & fittings. • WATCH OUT!!!

  7. Legislative Decree 31 March 1998, n. 114, requires a retail license to trade as a retailer. The retail license and the “concessions” • Concession agreements do not require a retail license: • Agreement for the management of a department (Circular n. 3467/C of 28 May, 1999, by the Ministry for Industry, Agricolture, Trade and Handicraft); • Commission agreement (art. 1731 subs. Civil Code).

  8. …thank you for your attention…

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