DIREZIONE/FUNZIONEDATA 1 INTERNATIONAL DISTRIBUTION INSTITUTE Avoiding legal constraints: domestic rules on commercial lease contracts, administrative rules requiring permits or licences for selling at retail level Venice, 18 may 2012

DIREZIONE/FUNZIONEDATA 2 Italian law on commercial lease contracts Law July , n. 392 on urban real estate lease contracts contains several mandatory rules in favour of the lessee Lease term: not less than 6 years/9 years (art. 27) Automatic lease renewal for the same term (art ). Renewal can be avoided by means of 12/18-month-notice: –By the lessor only if he intends to: Live in the building Conduct commercial activities in the building Reconstruct or fully refurbish the building –By the lessee unconditionally.

DIREZIONE/FUNZIONEDATA 3 Italian law on commercial lease contracts Right of the lessee to compensation for the loss of goodwill at lease termination (art. 34): –18/21 times the monthly rent; or –Double if the same the same activity (or alike) conducted by the lessee in the building is commenced (by anyone) within one year of the termination; –Not due only if the lease is terminated by/due to breach of contract by the lessee If intentions are not practiced within 6 months of the vacation of the building, the lessee has a discretional right to: –Have the contract restored; or –A penalty not exceeding 48 times the monthly rent.

DIREZIONE/FUNZIONEDATA 4 Italian law on commercial lease contracts The lessee has the right to sublease and to assign the lease on condition that the relevant business (“azienda”) is leased or assigned (art. 36). The lessee has a pre-emption right in case the lessor intends to sale the real estate (art ): –At the same sale terms and conditions; –With the right to re-purchase (“riscatto”) the real estate from a third- party purchaser. The lessee has a pre-emption right in case the lessor intends to lease the real estate, at the same lease terms and conditions (art. 40).

DIREZIONE/FUNZIONEDATA 5 The lease of a business Definition of business (art Civil Code): –A whole/complex; –Of goods/resources; –Organised by an entrepreneur/corporation; –To conduct its trade. The lease of a business (“azienda”) is not subject to the mandatory rules as per Law 392/1978.

DIREZIONE/FUNZIONEDATA 6 The lease of a business Usual composition of a lease of business skipping Law 392/1978: –Retail license; –Lease contract (real estate); –Fixtures & fittings. WATCH OUT!!!

DIREZIONE/FUNZIONEDATA 7 The retail license and the “concessions” Concession agreements do not require a retail license: –Agreement for the management of a department (Circular n. 3467/C of 28 May, 1999, by the Ministry for Industry, Agricolture, Trade and Handicraft); –Commission agreement (art subs. Civil Code). Legislative Decree 31 March 1998, n. 114, requires a retail license to trade as a retailer.

DIREZIONE/FUNZIONEDATA 8 …thank you for your attention…