Termination of contract: replacement of tenant and division of fund (part one)

The lease of land in the agrarian context, although it can validly be stipulated either in written or oral form, responds to the need/possibility of the owner of the productive property to let another person, the tenant, enjoy the same for a certain period of time, in return for a consideration, i.e., a sum of money.

However, it may happen that, during the course of the contract’s validity, certain circumstances lead to a change in the tenant subject, which may, in some cases, result in the termination of the contract or, in others, in the continuation of the contract with a new tenant: the legislature wanted to protect the continuity of cultivation.

In the past, the agricultural lease was, traditionally, conceived of as an intuitu personae contract, that is, a contract entered into by referring to a specific and determined person as well as relying on the person’s personal qualities and abilities. This conception, in fact, emphasized the personal character that the contract came to assume and rewarded the interest of the grantor, that is, the interest in a profitable and productive management of the fund, enhancing the figure of the tenant and, consequently, the main obligation that the tenant assumed towards the grantor, precisely, the productive management of the fund.

Now, since the tenant plays a role of considerable importance to the grantor, the latter could only be the only party entitled to evaluate and accept any change in the tenant, without there being any difference in treatment between cases of assignment of the contract and those of succession mortis causa in the same.

It goes without saying, therefore, that the lease could, always and in any case, have been terminated either as a result of the express manifestation of the grantor or if the tenant was replaced without the grantor’s prior consent.

Moreover, the evolution of agricultural legislation and the growing protection of the tenant’s rights, also with a view to the continuity of production and the better preservation of the land, has allowed for the introduction of hypotheses of assignability of the contract without the consent of the grantor; of succession in the contract by the tenant’s heir always, however, in compliance with the essential requirements – subjective and objective – provided for the stipulation of an agricultural lease.

A typical example of assignment of the lease, without the need for the prior consent of the lessor, is that provided for in the last paragraph of Article 48 l. 203/82, which verbatim provides that “if there is no family business, the contract may be assigned by the concessionaire, even without the consent of the lessor, to one or more members of his or her family who continue the direct management or cultivation of the fund, provided that they have already been carrying out agricultural activity as their principal occupation for at least three years.”

However, it should be borne in mind that, outside the cases expressly provided for, the substitution of the tenant without consent may bring termination of the contract, this being because the legislature deems it necessary to also protect the grantor-owning party, which would otherwise be totally deprived of “control” over its property.

Attorney Chiara Roncarolo

Attorney Maurizio Randazzo