ITALY Law and Practice Contributed by: Guido Alberto Inzaghi, Ivana Magistrelli, Silvia Gnocco and Gabriele Paladini, SI – Studio Inzaghi
6.9 Payment of Maintenance and Repair Maintenance costs for common parts of the property are borne by the landlord and reim - bursed by tenants on a pro rata basis. 6.10 Payment of Utilities and Telecommunications Tenants pay for utilities and telecommunication costs. 6.11 Insurance Issues Tenants are required to take out policies cover - ing any damage caused to third parties or to the property as a result of the activities carried out by the tenants within the premises. Landlords are usually required to take out insur - ance policies covering the building where the leased premises are located. 6.12 Restrictions on the Use of Real Estate Real estate must be used in compliance with zoning and planning provisions. Lease agree - ments expressly provide for the use of the prop - erty and the tenant is not allowed to change such intended use; doing so would result in the termination of the lease. 6.13 Tenant’s Ability to Alter and Improve Real Estate The tenant is usually allowed to alter/improve the property, subject to the landlord’s consent. Upon the expiry of the lease agreement, the landlord may require the tenant to remove all alterations and improvements, or may decide to acquire all alterations and improvements for free. 6.14 Specific Regulations Law No 392/78 regulates commercial leases (eg, office, retail and hotel), while Law No 431/98 reg -
ulates residential leases. The Italian Civil Code applies to all leases. 6.15 Effect of the Tenant’s Insolvency Landlords are not allowed to terminate lease agreements in the event of a tenant’s insolven - cy; instead, a specific procedure set up by the court-appointed receiver will take place. 6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations A cash deposit of up to three months’ rent is usually provided by tenants to landlords in order to secure the latter against a failure by the tenant to meet its obligations. Bank guarantees/insur - ance policies can cover higher amounts. Corpo - rate guarantees are even delivered by the tenant. 6.17 Right to Occupy After Termination or Expiry of a Lease Upon the expiry date, the tenant shall vacate the property. Failure to do so may result in holdo - ver indemnities being paid to the landlord for a specified period. Upon the expiry of this grace period (if agreed), the landlord may seek a court injunction and the restoration of damages. 6.18 Right to Assign a Leasehold Interest Per current market practice, a tenant might be allowed to assign the lease, subject to the land - lord’s consent. Exceptions might apply to intra- group assignments. A sub-lease term must not be longer than the term of the lease. These provisions can be freely determined by the parties and are subject to negotiations. Italian tenancy law provides that, if a tenant transfers the business along with the lease, the landlord can only oppose such transfer on justi -
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