Technically speaking, all tenancy agreements must be formalised by a legal contract between landlord and tenant. That said, some landlords are quite creative as far as bureaucracy is concerned and you may or may not be offered a rental contract.
Rental contracts tend to protect the tenants’ rights, much more than the landlord, which causes owners to be very cautious of renting out flats without assurance that the person they accept will be reliable. It is exceedingly difficult to evict a renter from an apartment after a rental contract has been signed.
Expect the flat owner to want to meet you personally, to ask for your financial documents, your intentions for how long you expect to stay, and payslip, if applicable.
THE RESIDENTIAL TENANCY AGREEMENT (contratto di locazione ad uso abitativo)
There are three main types:
This agreement is appropriate where:
i) the tenant (conduttore) requires a short-term commitment e.g. to tie in with a brief work or study project; or
ii) the landlord (locatore) wants a short let. It has a duration of not less than one month and not more than 18 months.
The temporary nature of the agreement must be set forth in the agreement itself. If the short duration is required by the tenant, she should annex relative documents in support (e.g. work contract). If the landlord seeks the short duration, then the agreement must state her reasons for this.
For designated highly populated areas, such as Bologna, accordi territoriali (applicable agreements reached between representative bodies of local landlord and tenant associations) provide that the rent must be calculated pursuant to the canone concordato parameters (see section 2 below on the fixed rent tenancy).
The lease may provide annual rent increase up to 75% of ISTAT (Italian National Institute of Statistics).
Short term tenancy does not benefit from any tax incentives.
At the end of the term, the agreement expires with no automatic right of renewal. If the parties want to continue the tenancy, it must be as a 4+4 contract or a fixed rent tenancy. The law tends to favour these longer-term contracts since they can only be terminated by landlord on certain conditions and so give more tenant security. Some landlords may seek to circumvent the rules by agreeing a short-term contract and then keep renewing it. In such case the continued agreement would automatically convert into a 4+4 contract.
This is more often called a ‘4+4 contract’ as it is initially for four years and will automatically renew a further 4 years unless a party does not advise the other, by registered letter at least 6 months prior to the expiry of the first four- year term, of their intention not to renew.
By law, the landlord may only refuse to renew the lease for the second four- year term in specific circumstances; for example, where she intends to use it as her or her immediate family’s primary residence, when it requires significant structural maintenance and so forth. The landlord can terminate the lease (and seek to evict the tenant) where the tenant is in breach, for example, in case of rent arrears. Eviction is not lawful without a court order.
Even if the four-year contract is automatically renewed, you can take this opportunity to renegotiate the contract (ask for a slight rent deduction, a new dishwasher, etc.). Usually the landlord will comply, if you have been a good tenant and he doesn’t want to lose you.
This type of contract has a 3+2 term, so it automatically renews for a further 2 years, unless a party notifies the other of its intention not to renew by registered letter at least 6 months prior to the expiry of the three-year term.
This contract is not applicable when your company is paying your rent for you. You may find that you are turned away from some flats if you are insisting on a “company contract” because the tax laws benefit private landlords to rent in a fixed rent method.
The rental parameters are fixed by the accordi territoriali. Rent is calculated based on determined factors, such as property size, state, whether it has a reinforced front door, security system, aircon, balcony and so forth.
In any of the above three types of Residential Tenancy Agreements, the landlord may opt for the tax regime called cedolare secca. The benefits are the following:
- Landlord pays reduced tax on the rental income;
- Tenancy is not subject to annual rent increases;
- The agreement is exempt from annual registration tax.
GENERAL CONTRACT MATTERS
the IWF housing contract ABC
Wear and tear is not considered to be damage.
The agreement may provide that the tenant must paint the property before she hands it back over to landlord. In such case, the tenant is obliged to do so. There is various case law recognizing that, if the contract makes no mention, then tenant is not obliged to paint it (as decorating falls within ‘normal wear and tear’). The model canone concordato contract does not provide that the tenant is liable for painting the property (but some estate agencies add this in to appease the landlord). On the other hand, the landlord will often take the position that the property was handed over freshly painted and thus tenant must paint to put it back in the same state in which it was received. To avoid arguments, it is better to clarify the obligation at the outset.
The tenant has the right to elect not to renew the agreement without any justification provided that she complies with the notice period. You must notify the landlord of your exit date via registered mail.
If the tenant wants to terminate during the ordinary course of the tenancy, then the law provides that she can do so on a minimum of six-months’ notice for serious justifiable reasons (gravi motivi). The concept would encapsulate scenarios such as defective property (e.g. mold or landlord failing to undertake significant maintenance issues), serious illness of tenant, loss of employment of the tenant.
Apartments with a full kitchen are considered “furnished”.
If you also require closets, beds, tables, etc. you can usually negotiate them into the contract, agreeing to pay a slightly higher rent.
Be sure to photograph and test all appliances, furnishings at key handover/check in.
Legally you have 30 days to test appliances for defects, if something breaks down after 30 days it is officially your responsibility to have it repaired.
See www.comune.bologna.it for further details on tenancy agreements.
When you have decided you like a place, and are serious about taking it, you can then ask the realtor to send a proposal to the landlord. He will then ask you for a caparra, or holding fee equal to one month’s rent to block the flat while he checks your finances and background for the landlord. At this time, you can also try to negotiate down a rental price from the asking fee, or to request some changes or additions be made to the flat. This is the time to ask for a new fridge, floors to be polished, or small repairs, lower the ‘notice of leave’ to three months instead of six, etc. After the lease has been signed, it is much more difficult to have changes made.
Making random requests verbally during a housing visit such as “Can we lower the rent?” or “Can the landlord change the refrigerator?” does not hold much leverage and is not considered respectful.
Be sure you are serious before you make a formal proposal. If you change your mind after the landlord accepts, your holding fee will not be refunded.
Some landlords avoid paying taxes by renting without a contract. This is called affitare in nero (under the table). You might decide that an oral agreement is fine with you, as you have more flexibility without the contract and the rent is undoubtedly lower than it would be otherwise. Nevertheless, remember that renting without a written tenancy agreement is illegal. It is legal, however, to lend an apartment to a friend. In this case, a landlord might request that if anyone asks, you say you are a personal friend. Decide in advance what your comfort level is as far as these alternative arrangements are concerned.
If tenant wants a registered agreement, but landlord refuses to sign one, then of course the tenant has nothing to register. In such case, the tenant can report the oral agreement and pay, in lieu of the agreed rent, a rent which is calculated on the cadastral value of the property, resulting in a significantly low rent. If you have an oral contract that you want to report, it is recommended you take legal advice beforehand.
To tackle the issue of partial ‘affitto in nero’ i.e. when the rent declared in the written agreement is less than that actually paid by tenant (with tenant paying the difference in cash), the landlord has no legal grounds to enforce the agreement for the additional rent. Moreover, the tenant has the right to claim reimbursement of the additional rent paid (you will need strong proof you paid it) within six months of vacating the property.
It is quite difficult to find housing without the assistance of a realtor, or estate agent. When you do choose your flat, the realtor will usually charge you 10% of the annual rent plus the IVA (Imposta sul Valore Aggiunto) sales tax to be paid before key handover. Sometimes this fee can be negotiated down to paying one month’s rent.
All tenancy contracts over 30 days must be registered with the Agenzie delle Entrate (Revenue Agency) by the landlord. Landlord and tenant share registration costs.
If the landlord refuses to register the agreement, then the tenant has the right to register it.
The tenant usually pays up to (not more than) three months’ rent as security deposit which should be returned at the end of the tenancy (less any deductions for damage to the property).
If you do not have a payslip, you may be asked to make a fideiussione bancaria (a bank guarantee). This can be quite costly, as it is basically asking the bank to block a sum of about six-months of rent, including a 2.5% interest rate while it’s being held. Sometimes there is no way around this.
The tenant is liable to pay a fixed part of these. Check the tenancy agreement to see whether the monthly rent includes spese condominiali or whether these will be paid in addition.
If the block has more than eight apartments, it is a legal requirement that a manager (amministratore condominiale) administrate the running of the block. This manager issues annually a statement of spese condominiali which sets out the amount payable by tenant and that payable by landlord. If the landlord does not provide this to you, you can obtain a copy directly from the manager.
Check www.assocasaugl.altervista.org for advice on calculation of service charges.
Where a party has given valid notice to terminate or the tenancy is nearing its natural expiration, the parties can agree that the tenant can set off the last months’ rent against the deposit held by the landlord (so, if three months’ deposit is held, she does not pay final three months of rent). However, in the absence of agreement, technically the tenant has no automatic right to do so.
If the tenant does damage the property or fails to carry out ordinary maintenance, the landlord can refuse to re-take possession until the issue is put right, exposing tenant to a potential claim of lost rental income.
Always take photos of the property immediately on taking possession and on vacating to have proof of its condition. Regrettably, it is not uncommon that a landlord will refuse to pay back all or part of the deposit on some invented claim, knowing that it is not cost-effective for the tenant to sue for her deposit back.
Besides the rent you will usually have gas, power and water to pay, if it is not included in the rent or condo fees (sometimes heat and water are included in monthly condo fees).
It is best to ask your realtor to help you with the hook-ups, they will usually do it as a courtesy. You will need a codice fiscale (tax code).
By law, all tenancy agreements over 30 days must be in writing or will be deemed invalid.