The principal source of law that deals with rights in or over property, and how these rights are created and transferred, is the Italian Civil Code (Codice Civile), although other important sources consist of leggi speciali (special laws) as well as case law.

When a vendor wishes to sell a property there may be certain rights or diritti di prelazione (pre-emption rights) that confer the right to some parties to purchase the property in preference to others. There are different types of prelazioni, although overseas buyers typically encounter the prelazioni agrarie, especially when buying rural property (buildings a well as land). In many instances, if not handled with care, this type of prelazione can create conflict and misunderstanding between the parties.

But what are the diritti di prelazione agrarie? How do they work? And how do they affect a purchase?

We can define the diritti di prelazione agrarie as rights conferring first refusal to neighbours (beneficiaries) to buy property in preference, and on equal terms and conditions, to others. In essence this allows them to buy additional property that is of special interest to them so that they can increase their existing agricultural holding.

 

Prelazioni agrarie are based upon legal stipulations. They are not something that the parties can freely determine. In fact, a vendor has to offer his/her property first to those with a protected right within the limits imposed by law. The scope of the law is to ensure:

 

• That plots of land adjacent to a farm or agribusiness can be obtained via the prelazione;
• The protection of the rights of any partners/shareholders of a farm or agribusiness so that they can excercise their share of the prelazioni
• That heirs of a farm or agribusiness would not need to sell the familiy business simply because other family members want to
• The continuity of an established agribusiness requiring additional farm holdings

There is a hierarchy among these groups. For example, partners and shareholders of a farm or agribusiness have priority over heirs, who in turn, have priority over tenants. Tenant farmers on the other hand, have priority over other neighbours. For beneficiaries to posses the right to purchase a property in preference, and on equal terms and conditions to others they:

 

• must be coltivatori diretti or registered farmers (includes cooperatives formed by farmers and IAP – imprenditori agricoli a titolo principale – or farm entrepreneurs). Coltivatore diretto is a qualification given to people who are directly involved in farming for a living (including family members up to the 3^rd degree)
• must have worked on the land (including woodland) directly for at least 2 years. This excludes owners who enlist others to cultivate the land or owners who are too old to work the land themselves
• cannot possess property, either through ownership or via emphiteusis, that, in addition to the property for which they intend to excercise their pre-emption rights, exceeds the total surface area of land already cultivated by the family business by a factor of three
• must not have sold any land with low rateable values within the preceeding two years

These requisites must exist at the time a beneficiary decides to exercise his/her right. Prelazioni agrarie are not valid, however, in the event of:

• a forced sale or in the case of bankruptcy
• a sale by auction
• compulsory purchase orders
• barter or exchange
• the sale of non agricultural land (land for building, development or industrial purposes, or for tourists and other public use)

What happens if there are many neighbours? When more than one neighbour is involved, D.LGS 228/01 (the agricultural sector modernisation act) specifically tests priority according to the following criteria:

• That you are a coltivatore diretto or imprenditore agricolo a titolo principale under 40 years old
• That your agribusiness has a workforce comprised mainly of young people
• Your professional qualifications (degrees or diplomas in agricultural, zoological or veterinary sciences)

What is the general approach to exercising the prelazioni agrarie? There is a well-defined legal procedure that has to be rigorously followed. This procedure, affirmed by recent case law, involves:

1. Communication from the vendor: the vendor must notify, as precribed by law, all beneficiaries of the intended sale by service on them of copies of the preliminary contract (“compromesso”). This is known as the denuntiatio.
2. Exercising the prelazione: Beneficiaries have 30 days from the date they have received a copy of the compromesso to either exercise or give up their right. Moreover:

• Beneficiaries can simply notify the vendor of their intentions. There is no need to amend the compromesso
• The price contained in the denuntiatio has to be paid within 3 months from the end of the 30 day period
• If a beneficiary needs a loan to buy the property, he/she can apply for an extension of up to one year before exercising the prelazione
• Once payment has been made the property automatically passes to the beneficiary

If the prelazione has been breached on the other hand (when a beneficiary hasn’t been properly notified or when a property has been sold with different conditions to those contained in the compromesso), beneficiaries can exercise their right via redemptive action:

• Redemptive action must be taken within one year from the registration of the transfer of the title also taking the buyer to court

Consider the following dispute (not uncommon in Italy) between overseas buyers and their neighbour (owner of vineyards), who served them with a court summons because he claimed that he had the right to their property. This occurred after the buyers started renovation work on their property and within twelve months from completion.

 

The denuntiatio was served, as precribed by law, although the claimant argued that the contract didn’t contain all the correct elements. According to the claimant, moreover, the lack of correct elements meant he was unable to exercise his right to buy additional land. The compromesso was considered invalid therefore. The claimant, moreover, wanted more time for his lawyers to review the paperwork. He then opted for redemptive action. The buyers have had to respond to the summons and file their defence. In the meantime, they have had to suspend renovation work.

 

Reference to Italian case law is key. Whereas previous case law provided that general details contained in a standard compromesso were sufficient, the most recent case law affirms that the compromesso must now provide all information, including the surface areas as well as the price of each plot of land/buildings included in the sale.

 

The moral of the story? Italian legal rules concerning property are complex, multifarious and sometimes contradictory. There is no such thing as a standard property transaction and even the most innocent of purchases can produce problems. If in doubt, it is always wise to seek professional, legal advice.