Italy

A can grant B a lease (locazione) of the property (Civil Code, arts. 1571 ff.). Under a contract of lease, the landlord undertakes to provide the tenant with the enjoyment of property for a certain period of time in return for the payment of rent. If the lease has a term of more than nine years, it must be constituted in writing (Civil Code, art. 1350, no. 8). Where the object of a lease comprises the enjoyment of income-producing property, it is called a hire (afÞtto) (Civil Code, art. 1615) and is subject to slightly different rules. Generally, a lease cannot be granted for more than thirty years (Civil Code, art. 1573), but a lease of residential premises can be granted for the entire life of the lessee, and for two consecutive years after his/her death (Civil Code, art. 1607).

A can grant B a usufruct (usufrutto) over the property (Civil Code, arts. 978 ff.). Usufruct is a real right of use and enjoyment of property, subject to the obligation of preserving its economic destination. The duration of usufruct cannot exceed the life of the usufructuary. Writing is required for a contract constituting a usufruct (Civil Code, art. 1350, no. 2).

A can grant B a right of use (uso) or a right of habitation (abitazione) (Civil Code, arts. 1021 ff.). These real rights are similar to usufruct, but more limited in scope: the right of use (uso) entitles the usuary to use the property and, if it produces fruits, to collect the fruits to the extent necessary for his/her and his/her family’s needs; the right of habitation (abitazione) entitles the holder to reside in the house. Writing is required for a contract constituting these rights (Civil Code, art. 1350, no. 4). Civil Code, art. 1026 stipulates that the provisions relating to usufruct apply, to the extent that they are compatible, to use and habitation. Unless otherwise indicated, all comments on usufruct are equally applicable to use and habitation.

A can grant B a loan for use (comodato) (Civil Code, arts. 1803 ff.). A loan for use is a gratuitous contract whereby the lender transfers property to the borrower for his/her use under the obligation to return it to the lender. Writing is not required, but handing over of the property is essential for the completion of the contract of comodato. If no term is specified, the borrower must return the property after he has used it for the purpose envisaged in the contract. In addition, the lender may reclaim the property before the due term where he/she finds him/herself in an urgent and unforeseen need of the property.

In the case of a farm, A can also grant B a hereditary land lease (emphyteusis, enÞteusi) (Civil Code, arts. 957 ff.), which is a long-term real right to

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use and enjoy the land as if it were owned outright in return for payment of rent. The essence of the right is an undertaking of the holder to improve the land. EnÞteusi cannot be granted for less than twenty years; it can be granted in perpetuity. EnÞteusi is seldom used in practice and most existing enÞteusi were created decades ago. This can be partially explained by the fact that the legislation is highly unfavourable to the owner (Law No. 607 of 22 July1966, Law No. 118 of 18 December 1970, Law No. 270 of 14 June 1974). It limits the rent that can be imposed and allows the enÞteuta to redeem the land by paying a modest sum. Since it is very seldom used, enÞteusi will not be dealt with further.

Another possibility may be a hereditary building right (superÞcie) (Civil Code, arts. 952 ff.) which allows the holder to erect and maintain a building above the soil of another and to acquire ownership of the structure. He/she can also transfer ownership of an existing building separately from ownership of the soil. The owner of residential property can transfer the proprieta` superÞciaria (ownership of the building but not of the soil) for a fixed term. On the expiration of the term, the owner of the soil also becomes the owner of the building. SuperÞcies will be dealt with in Cases 10–12, which deal with its more typical use.

The Netherlands

Under a contract of lease, the landlord agrees to provide the use of movable or immovable property to the tenant in exchange for a counter-performance (Civil Code, art. 7:201). There are no formal requirements. Although the contract does not have to be in writing100 and registration in the Land Register is not only not required, but even impossible, a lease is nonetheless enforceable against third parties.

The Law on Agricultural Lease (Pachtwet) defines an agricultural lease as any contract in any form, regardless of its heading, according to which one party commits itself to provide to the other party a farm or a piece of land in exchange for a counter-performance (Law on Agricultural Lease, art. 1 d). In the near future, the special Law on Agricultural Lease (Pachwet) will become part of the Civil Code. The definition of agricultural lease will be found in Civil Code, art. 7:311.

No formalities are required in order validly to enter into an agricultural lease.101 This prevents the landlord from circumventing the

100Asser and Abas, ‘Bijzondere Overeenkomsten’, p. 11.

101Asser and Snijders, ‘Pacht’, pp. 23 ff.

authorities will require it in written form, regardless of the requirements posed by civil law.

The maximum term for a lease is ten years. Such a lease may only be terminated by the parties if the contract specifies the reasons for and the ways in which the lease may be terminated (Civil Code, art. 673, § 3). If the parties contract for a term of more than ten years, the contract is deemed to have been made for an indefinite period of time after the lapse of ten years (Civil Code, art. 661), which in essence means that each party may give notice and terminate the lease after that. Notice periods may be agreed on by the parties. If none was set, the Civil Code supplies specific statutory notice periods (Civil Code, art. 673, § 2).

The above are general rules on leases and apply to residential leases unless special statutes (legi speciali) state otherwise. The Law on Protection of Tenants, the Law on Residential Stock of Local Governments and the Amendment of the Civil Code Act 2001105 generally apply to residential leases and to all instances where residential premises are used (excluding the lease of hotel rooms and other accommodation for tourist or recreational use). The most important difference between these specific laws and the general rules on lease concerns the possibility of terminating a residential lease in accordance with specific notice periods. The specific rules state that if a tenant who pays rent is not in breach of the contract, the landlord may terminate a lease for an indefinite period with either six months’ notice if the tenant is entitled to use other premises or the landlord supplies him/her with alternative accommodation, or three years’ notice if the tenant is not entitled to use another premises or the landlord does not supply him/ her with alternative accommodation, and if the landlord intends to live on the premises himself/herself (Civil Code, art. 11).

If the lease concerns land (or a part thereof) for which a Register is available (which is usually the case), it may be registered in that Land Register. Article 16, § 1 of the Law on Land Register and Mortgages 1982 (LRM),106 provides that personal rights and claims may be registered. Such registration causes that right (or claim) to be effective against rights acquired subsequent to registration through legal transactions, but not against a way of necessity or encroachments of buildings or structures on neighbouring land (LRM, art. 17). This provision is particularly important to tenants: if the landlord sells the leased property, the

105Law of 21 June 2001, Dz.U.05, no. 31, item 266, text with amendments.

106Law of 6 July 1982, Dz.U.01, no. 124, item 1361, with subsequent amendments.

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purchaser takes the place of the landlord, but with the ability to terminate the lease by serving notice in accordance with the statutory notice periods. If, however, the lease was for a fixed term and reduced to writing and the lessee has entered into possession of the property, the purchaser may not terminate the lease (Civil Code, art. 678).

If the tenant of a residential premises dies, his/her place is taken by his/her spouse, his/her children and the children of the spouse, a cohabitee of the lessee and persons to whom the lessee was obliged to pay alimony. The above become tenants only if they permanently occupied the premises with the tenant until his/her death. They may terminate the lease by serving notice within the statutory notice periods, even if the lease was created for a fixed term (Civil Code, art. 691).

The Civil Code also provides for an income-producing lease (fruendi lease) on fruit-bearing or income-producing property, which, compared to the ordinary lease, has an additional element entitling the tenant not only to use the leased property but also to collect and utilise the fruits it produces (Civil Code, art. 693, § 1). The income-producing lease applies to movables and immovables which bring forth fruits as well as to rights which generate ‘fruits’ (profits). Apart from a number of special provisions which only apply to income-producing leases (Civil Code, arts. 693–709), the general provisions on ordinary leases apply mutatis mutandis to income-producing leases (Civil Code, art. 694).

The maximum term for an income-producing lease is thirty years. If the term of the lease is for more than thirty years the contract, following the lapse of the thirty year period, is deemed to have been made for an indefinite term (Civil Code, art. 695), which in essence means that each party is entitled to terminate the lease simply by giving notice. The statutory notice period for terminating an income-producing lease of agricultural land is one year before the end of the lease and in all other cases six months before the lapse of the lease year. The parties may agree on other notice periods.

It is also worth noting that Civil Code, art. 708 provides for the creation of a right similar to an income-producing lease. This innominate right relates to agricultural land and is rent free, but the person entitled is obliged to pay taxes and other expenses connected with the ownership or possession of land. This right is regulated by the rules on both income-producing leases and loans for use. The provisions of the Land Register and Mortgages Act on registration mentioned above apply here as well. Both types of leases and the innominate right described in Civil Code, art. 708 are personal rights based on contract but upon

registration, their effectiveness is similar to that of real rights. LRM, art. 31, § 1 requires that an entry in the Register must be made on the basis of a written document with signatures certified by a notary, unless special provisions require a more stringent form (which is not the case for leases and art. 708).

A can grant B a usufruct of the property in question (Civil Code, art. 252) by virtue of which an encumbrance is created on the property of another which entitles the usufructuary to use the property and to reap its fruits. Note that under Polish law a usufruct is a separate limited real right and not a kind of personal servitude such as, for instance, the right of habitation. Note further that it is mainly created through a contract concluded between the parties. A usufruct may relate to movables, immovables and rights capable of being transferred which produce fruits or income. It may be established gratuitously or for value and for a fixed or an indefinite term.

The content of the right resembles the fruendi lease, but the latter always gives rise to a personal right and is always for value (rent). Also, as a rule, it is possible to transfer the fruendi lease, whereas usufruct as such is non-transferable and intransmissible. The usufructuary is, however, entitled to allow another person to exercise the right on the basis of, for example, a lease or loan for use. The usufruct terminates at the death of a natural person or dissolution of a legal person. Therefore, unlike the fruendi lease, which is aimed at satisfying commercial or economic needs, the purpose of usufruct is to satisfy the needs of a more personal type such as providing financial support to a family member. It is usually created with respect to land, particularly agricultural land.

To create a usufruct, the owner is required to state his/her intention in the form of a notarial deed. However, the usufructuary’s acceptance of the usufruct does not require any particular form (Civil Code, art. 245, § 2). Both parties usually appear before a notary and the whole contract takes the form of a notarial deed. Usufruct may, but does not have to be, registered. If it is, it will be effective against future purchasers of land, who will not be able to argue that they were in good faith and were not aware of the existence of the usufruct.

A can grant B a personal servitude (Civil Code, art. 296). A personal servitude, for instance, the right of habitation, relates to immovables only and entitles the holder to use the property in a specified way agreed to by the parties. It burdens the immovable property in question and is a limited real right. It may be created gratuitously or for value, and for a fixed or indefinite term. The content of a servitude is not as wide as that

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of a usufruct. The holder of a personal servitude may perform only specified actions with regard to the immovable property, for instance, use it or inhabit a dwelling on the land. He/she may not use and reap the fruits of the property like the holder of a usufruct. Thus Polish personal servitudes resemble the institutions of use and habitation encountered in other jurisdictions.

A personal servitude is created in the same manner as a usufruct (Civil Code, art. 245, § 2) to fulfil the personal needs of a given person. Therefore, it is not transferable and may not be exercised by anyone other than the holder himself/herself (Civil Code, art. 300). A personal servitude cannot persist beyond the death of the holder (Civil Code, art. 299). A special type of a personal servitude is the servitude of habitation regulated in Civil Code, art. 301. Without any express definition in the Civil Code, one must assume that it entitles the holder to inhabit a dwelling together with his/her spouse, minor children, other dependants and domestic servants (Civil Code, art. 301, § 1). Children who resided with him/her as minors may remain in the dwelling after reaching adulthood. It is interesting to note that Civil Code, art. 301, § 2 stipulates that the parties may agree that upon the death of the holder the servitude of habitation will pass to his/her children, parents and spouse. Just like usufruct, the right of habitation may, but need not be, registered with the same effects if registered.

A very interesting contractual right107 that A may grant B is a lifetime habitation. This right is created through a contract of sale by virtue of which the seller (B) transfers the ownership of immovable property (land) to another person (A) and in return the latter undertakes to take the seller (B) into his/her home and provide him with food, clothes, accommodation, energy and heating, care in times of illness and to organise and pay for his/her funeral. Additionally, the person who acquires the land may be obliged by a provision in the contract to create a usufruct or a right of habitation or provide money or things designated in kind (Civil Code, art. 908). Since the above-mentioned contract contains the obligation to transfer land, it must be executed in a notarial deed (Civil Code, art. 158).

107A lifetime habitation is a mere contractual right, which in effect encumbers immovable property in the same way as a limited real right. However, since a numerus clausus of real rights are recognised in Poland, a lifetime habitation cannot be classified as a limited real right.

The right under a lifetime habitation is strictly personal and therefore not transferable or transmissible on death. Since it burdens land, the provisions on limited real rights are to be applied analogously (Civil Code, art. 910). Like many of the limited real rights it may be, but does not have to be, registered. Although it is created simultaneously with the transfer of land, the notary is not obliged to file for the registration of a lifetime habitation. In practice, many notaries would offer the client their services in filing for registration of a lifetime habitation or at least inform them of such a possibility. However, even without registration, it will be effective against a purchaser of the immovable who was in good faith (LRM, art. 7.2).

The state or a local authority can grant B a perpetual usufruct (an adapted superÞcies) with regard to its land. This right is regulated in Civil Code, arts. 232–43 and also in various provisions of the Law on Management of Real Property 1997 (LRM).108

A perpetual usufruct of land is a real right to exploit the land of another, usually through the erection of buildings in return for the payment of a yearly rent. The scope of the right is limited by statutory provisions, rules of socio-economic justice and by contractual provisions, which usually confine the enjoyment of land to specified purposes or contain other constraints agreed to by the parties. Perpetual usufruct is, unlike personal servitudes, alienable and transmissible. It may be sold, mortgaged or transmitted to heirs.

If the scope of the perpetual usufruct allows for the erection of buildings on the land of another, the holder of the right will become the owner of the buildings that he/she erected for the duration of the perpetual usufruct. Such ownership is, however, linked to the perpetual usufruct of the land which means that the buildings may only be transferred together with the perpetual usufruct and vice versa.

The dual ownership of the land and the buildings on the land can be explained historically. Perpetual rights to land were originally created in order to allow the State to make urban land available to citizens for residential development. The State did not, however, wish to transfer ownership of land into private hands, as this was contrary to socialist ideology. On the other hand, citizens needed some security of title to persuade them to invest their own money in building a house. Perpetual usufruct was a compromise which allowed the State to retain ownership

108Act of 21 Aug. 1997, text with amendments, Dz.U.00, no. 46, item 543, with subsequent amendments.