Players in real estate industry often wonder about the possibility of entering into commercial leases derogating from specific provisions of applicable law, i.e. Law no. 392 dated 27 July 1978.
How to deal, for example, with the client’s request to include in a lease agreement the right to withdraw at any time (i.e. ad nutum) in favour of the landlord orto include in favour of the landlord the right to refuse the renewal of a lease agreement on its first expiry date for any reason whatsoever?
A first conclusive element as to the full derogation from the aforesaid Law is provided by the wording of Law Decree no. 133/2014, which added the third paragraph to Article 79 of Law no. 392/78, that expressly allows those agreements between the parties detogating from the aforesaid Law as long as such agreements are made in the context of “major leases”, i.e. those leases for which the annual rent is higher than Euro 250,000.00 (save for particular types of properties).
Although Article 79, in its current wording,, makes – on one hand – null and void “any agreement aimed at reducing the legal term of the lease or allocating to the landlord a rent higher than that provided for in the previous articles or granting the landlord any other advantage contrary to the provisions of this law”, on the other hand, it expressly allows, “in leases involving properties for use other than residential, including those used as hotels, for which an annual rent higher than Euro 250,000.00 is agreed”, the parties’ right to enter into agreements derogating from the regulatory framework set forth in Law no. 392/1978.
Notwithstanding such an apparently clear regulatory framework, under the new provision, the consolidated practice of real estate players has been particularly conservative, even in cases of “major leases”, clearly for fear of their legitimacy.
Indeed, Supreme Court’s decision no. 3399 dated 6 February 2024clarified the applicative scope of Article 79 of Law no. 392/1978, specifying that commercial “major leases” (i.e. leases with an annual rent exceeding Euro 250,000.00) may include clauses derogating from all the “mandatory” prescriptions of Law no. 392/78, thus recognising the parties’ right to freely negotiate clauses on minimum duration, automatic renewal, pre-emption rights, withdrawal for serious reasons, landlord’s withdrawal, goodwill indemnity and indexation and/or rent increases.
The Court explains that this derogatory power is granted to the parties only for “major leases” on the grounds that, in this negotiating context, the tenant – given the amount negotiated – is not considered to be a “weaker party” to the relationship and therefore deserving of greater protection, a factor that, on the other hand, prevents in normal commercial leases the negotiation of terms and conditions derogating from the provisions of Law no. 392/1978, which are strictly protective of the tenant (see art. 79, paragraph 1, and Supreme Court’s ruling no. 24221, 30 September 2019).
Accordingly, in the light of the aforementioned ruling, all doubts as to whether the mandatory provisions of Law no. 392/78 can be fully derogated from shall now be deemed to have been overcome and, therefore, it shall be understood as being left to the free negotiation of the parties to agree on terms that are more or less favourable to the parties under the conditions set forth in Article 79 of Law no. 392/1978.