Long, short and transitory rentals: how they work and how they are regulated in Italy

Only under certain conditions may the lease be of a different and shorter duration: but always bound and monitored by the law.

Do 3+2 agreed rental contracts derogate from the 4+4 rental discipline?

L. 431/98 provides an exemption for the conclusion of leases with an agreed rent of 3 years (+2). In these cases, the rents and contractual terms set out in appropriate agreements defined at local level between the most representative landlord and tenant organisations must be respected (Art. 2 para. 3 L. 431/98). The landlord thus accepts a lower than market rent and, in return, gets tax benefits and a slightly shorter duration than the ordinary 4+4.

However, the market also has an urgent need for residential contracts of a few months or a few years for landlords and tenants. Do transitional contracts meet this need?

There is also a second type of derogation, in L. 431/98. Landlord and tenant may also conclude a tenancy agreement for residential use for needs of a transitory nature. However, even in this case, they cannot freely choose the duration, which must instead be determined with reference to the satisfaction of the owners or tenant’s transitory need. Furthermore, the parties must carefully observe certain precise limits. For example, the duration of the transitional need and therefore of the lease cannot exceed 18 months, except for university students. This need must be indicated and documented, as identified in the Local Agreements mentioned above for contracts with agreed rents, the contractual models must comply with those annexed to the Ministerial Decree of 16 January 2017 and, last but not least,

This is without taking into account the assistance and asseverating interventions of trade associations.

What happens if landlord and tenant agree on a period of less than 4+4 but do not meet the criteria for exemptions?

In such cases, the contractual provision is null and void and may be enforced in court by the tenant. In general, any agreement to derogate from the duration limits of the contract established by L. 431/98 (Art. 13 para. 3 L. 431/1998). Moreover, the Ministerial Decree of 16 January 2017 provides that if leases of a transitory nature are concluded in violation of the provisions of the same decree, they are brought back to the ordinary duration (Art. 2 para. 6). It is in fact a well-established orientation of our courts (cf. most recently Cass. 5955/2023) to bring back to the ordinary duration of (4+4) years leases for residential use concluded with false indication of transience. This rigidity in residential leases is designed to protect the long-term housing needs of Italian families by introducing a strong favour towards the tenant.

which instead requires leases of freely adjustable duration, possibly accompanied by the possibility of offering additional services, given the growing demand for serviced apartments.

Thus, even transitional contracts are not an agile instrument that can solve the new market requirements. In the text “The New Tourist Hospitality” published by the legal journal Key Editore, signed by you and some academics from Hospitality Law Lab, we read that the transitional contract gave birth to the tourist lease. What does this consist of?

If the contract is concluded for a tourist purpose, the favour towards the tenant is removed, the parties are considered to be balanced and the “98 legislation does not apply, according to the civil law view prevailing today. This type of lease was identified by Art. 1 of L. 431/98, as a specificity with respect to the transitory contract, precisely, providing that if the transitory need was determined by the tenant’s tourist purpose, certain provisions, including precisely those on duration, rent and documentation of the need, did not apply. This is in order to favour seasonal leases of a duration that cannot be determined at the beginning of the relationship, which are very widespread in our country, which is rich in locations of high tourist-artistic value, reachable in a short time from the places where each citizen usually lives. This successful and widely used formula is further freed from the binding regulations of 1998 by the 2011 Tourism Code, which returns this lease to the free contractual autonomy of the parties. Only the obligation to register the contract (which must therefore be concluded in writing) remains if the duration is longer than 30 days. It is, however, a tax issue. From the point of view of civil law, the duration - shorter or longer than 30 days - of the lease for tourist purposes is irrelevant.

So what regulations do short-term rentals have to comply with?

The term “short lease” entered our legal system roughly with  the Art. 4 of D. L. 50/2017, which identified only a particular fiscal discipline, defining it, for the exclusive purposes of the same decree, as the rental of real estate for residential use of a  duration not exceeding 30 days stipulated by natural persons, outside the exercise of business activities, directly or through entities that exercise real estate intermediation activities, or entities that manage telematic portals. 

if the landlord decides to opt for the substitute tax in the form of the cedolare secca (flat rate tax) applicable “to income deriving from short-term rental contracts” raising it to 26%, except for maintaining the reduced rate “at 21% for income deriving from short-term rental contracts relating to a property unit identified by the taxpayer in his tax return”. Although the intent of the rule is understandable, its introduction into the law in a very hasty manner could generate enforcement difficulties.

But then, is there a conceptual difference between transient and tourist leases?

Nowadays, on a practical level, the distinction revolves around the perimeter of the concept of tourism: the possibility of resorting to a lease for tourist purposes is very reduced if one favours a narrow meaning of the adjective "tourist" (so-called tourism proper) built around the concept of holidaying suggested by the prevailing civil law jurisprudence (albeit in a different context). On the contrary, the opposite conclusion is reached by endorsing an interpretation that embraces the concept of tourism in a broad sense (so-called improper tourism), which goes so far as to encompass any temporary movement from one’s main residence regardless of the motivation or purpose. This is the meaning roughly recognised by the UNWTO and our public system.

Why is the distinction important?

The classification of each tenancy position results in the application of a different regulatory framework. Whoever rents out accommodation for tourism purposes may be required to comply with the regulations of his or her region, which are full of administrative requirements, with the European regulations protecting the “consumer-tourist” and with the specific regulations for landlords operating online through OTAs and intermediary platforms such as Booking, Airbnb or Expedia. Especially at this time, when the state has decided to intervene by imposing new requirements on anyone who rents out their home for tourism purposes, regardless of the duration.

More specifically, how is Parliament intervening at this time?

In addition to the Budget Law still under discussion, Parliament has recently intervened on both tourist leases and short leases.

In addition to this, if these leases are “operated” in “entrepreneurial form”, specific safety requirements are imposed on the facilities, and the provision of “functioning combustible gas and carbon monoxide detection devices as well as portable fire extinguishers...”. In addition, anyone “exercising the activity of renting” - for tourist or short term purposes – as a business is also required to submit a certified notification of commencement of activity (SCIA). The article, if approved, will enter into force on the sixtieth day following the publication in the Official Gazette of the notice stating that the national database and the telematic portal of the Ministry of Tourism for the assignment of the CIN will be operational.