Lease agreement and plurality of owners

The conclusion of an agrarian lease contract between a direct farmer and the grantor, the sole owner of the land, does not cast any doubt on the validity of the contract in the presence of the agreement of the two parties involved.

The problem, if any, regarding the validity of an agricultural lease contract arises, on the other hand, in cases where the land, which is the subject of the contract, is owned by a plurality of parties, and the contract was entered into between the direct cultivator and only one of the co-owners or only a minority of the co-owners.

With reference to such situations, the Supreme Court has held that a contract by which a fund is leased on the initiative of only one of the “condominiumowners” is valid, in application of the presumption that the acting party has acted with the consent of the other co-owners as well (Supreme Court, Civ. Cass. Sec. III, Jan. 27, 2005, No. 1662).

There exist, in fact, in the head of each of the co-owners equal management powers of the co-owned property, which are reflected not only in the possibility of concluding a valid and effective lease agreement signed by only one of the co-owners, but also, in the procedural sphere, in the power of each to act to protect the right of co-ownership “against those who have rights of enjoyment over the property, in view of the commonality of interests among all the co-owners of the same property, such as to allow the presumption of the consent of each to the judicial initiative aimed at the protection of the common interests, unless the dissent of the majority of the other co-owners is inferred and demonstrated to overcome this presumption, in which case the prior intervention of the judicial authority pursuant to Of Art. 1105 cod. civ.” (Cass. civ. sec. III, Jan. 31, 2008, no. 2399).

As an illustration of what has now been stated, in most cases-and according to the rules of normal practice-in the presence of a plurality of owners, it will be only one of them who will be in charge of the management of the property with the consent and in the interest of the others, thus invoking the above presumption of consent.

The aforementioned disjunctive power is not, however, unlimited and unconstrained, as it always has to relate to the equal power/right of the other co-owners, and it is precisely for this reason that the manifestation of dissent by the majority of the co-owners could affect – under certain conditions – the validity of the lease contract entered into not by all the owners.

The conditional in such a case is a must, since the manifestation of dissent must have occurred and been communicated to the grantor co-owner – as well as to the tenant/landlord – during the negotiation stages, i.e., prior to the conclusion of the contract or at the initial moment of the relationship if the contract had already been concluded.

Where notice has been given within the above terms, the Supreme Court rules that “the possibility of claiming that conclusion or execution remains precluded, with the consequence that the contract, entered into despite such awareness, is invalid due to lack of power, or valid will, of the condemning party” (Cass. civ., Sec. III, June 4, 2008, no. 14759).

Therefore, the dissent expressed and communicated to the tenant after the contract has already been concluded and the relationship is already in progress does not produce any negative effect on the tenant, who will continue cultivation of the land under a valid title, the late communication of the dissent not being capable of overturning the presumption that the grantor had acted with the consent of the other co-owners.

The latter assertion is of great importance not only for the inherent validity of the contract, but also for the purpose of the validity/legitimacy of the farmer’s application for EU aid or Agea grants for the cultivation of the contracted land, made by the farmer precisely under this lease.

The contract will, therefore, remain valid and effective vis-à-vis the tenant – a bona fide third party contractor – holding him or her harmless from any and all actions for release and claims, as well as any claims for damages. The latter may contrariwise be demanded from the grantor by the other dissenting co-owners, if the activity carried out is detrimental to the interests of the community (Cass. Civ., Sec. III, Jan. 13, 2009, No. 483).

Attorney Chiara Roncarolo

Attorney Maurizio Randazzo