ITALY Law and Practice Contributed by: Guido Alberto Inzaghi, Ivana Magistrelli, Silvia Gnocco and Gabriele Paladini, SI – Studio Inzaghi
6.19 Right to Terminate a Lease Leases include a specific termination clause listing all events pursuant to which a landlord can demand termination. In any case, a tenant’s non-fulfilment of its obligations might allow the landlord to terminate the lease. A tenant has the right (according to the final paragraph of Article 27 of Law No 392/1978) to withdraw from the lease agreement at any time on the basis of “serious grounds” ( gravi motivi ) with six months prior notice. This provision can only be derogated from by the parties in longer- term leases. 6.20 Registration Requirements All leases have to be registered with the tax authority and an annual registration fee equal to 1% of the passing rent must be paid. The regis - tration fee is usually paid equally by the landlord and the tenant. Certain leases that have an initial term which is longer than nine years should be executed before a notary and registered with the Land Register so that they can be accessed by all third parties. 6.21 Forced Eviction If the tenant does not comply with the obliga - tions under the lease, the landlord can terminate it and seek their eviction. This is a court process and the duration varies depending on the court. 6.22 Termination by a Third Party A lease can only be terminated by a third party in cases of compulsory procedure and an indem - nity is payable. 6.23 Remedies/Damages for Breach In the event of a breach by the tenant and termi - nation of the lease, landlords may hold the cash
deposit (which, except for longer-term leases, cannot be more than three monthly instalments of rents) and/or enforce the guarantee. In addition, landlords may seek further damages (eg, loss of profit and reputational damages) be ascertained before a court and/or provide for specific penalties in the lease agreement. 7. Construction 7.1 Common Structures Used to Price Construction Projects The most common structures are: • a guaranteed maximum price to be deter - mined based on an open book approach, except for variations; • a price determined on the basis of separate prices for certain works and the overall final price is determined upon the completion of works; or • a cost plus fee basis, where the price is determined on an open book basis plus a pre-agreed fee. 7.2 Assigning Responsibility for the Design and Construction of a Project Landlords might decide to enter into separate agreements for design and construction. The relevant liabilities will remain with the appointed contractor, except in the case of any necessary variations. 7.3 Management of Construction Risk It is market practice to insert penalties to be paid by the contractor for delays. Regarding the feasibility of the project, the construction agree - ment usually includes proper representations and warranties. Contractors are also required to deliver performance bonds.
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