Right of retention and transfer of land

Article 17 of Law 203 of 1982 on land improvements, additions and transformations states: “…… The tenant who has carried out” improvements, additions and transformations of the fund “referred to in the first paragraph of Article 16 shall be entitled to an indemnity corresponding to the increase in the market value achieved by the fund as a result of the improvements made by him and as resulting at the time of the termination of the relationship, with reference to the current market value of the unprocessed fund. The parties may also agree on the payment of this allowance before the termination of the relationship. …… The tenant is entitled to the retention of the land until the landlord has paid him the compensation fixed by the inspectorate or determined by final judgment by the court. In the case of sale of the land prior to the payment to the tenant of the indemnity referred to in the preceding paragraph, the owner shall be obliged to declare in the deed of sale the existence of the obligation to the tenant as a result of the works referred to in the first paragraph of Article 16, being in such case released from the obligation“.

As a result of the aforementioned legislative provision, the question arose concerning the relations among the successive owners; their different positions with respect to the party with the right of retention; and the actions and defenses incumbent on each to safeguard their respective interests in the event that a sale of the fund was made.

According to a part of the doctrine and jurisprudence, in the case where the tenant invokes the right of retention for the improvements made on the land against the new owner and, on his part, the new owner acts for the release of the land there is a clear and relevant conflict of interests that is not easily and readily resolved.

A first remedy could be to call in the seller, i.e., the former owner, under Article 106 of the Code of Civil Procedure for him to give the “suitable guarantees” mentioned in Article 15 of Law No. 11 February 1971. 11. The seller, who is called into the lawsuit, may take two different attitudes: he may provide the appropriate security while disputing the tenant’s claim for the improvements, or he may instead take a completely negative stance both with regard to the debt and, more importantly, with regard to the security. In the former case, the release action will take its course; in the latter, however, the action by which the new owner, i.e., the buyer, seeks to obtain release will remain paralyzed by the prevailing right of retention granted to the tenant. There remains, in any case, in favor of the buyer, and against the seller, the action provided for in Article 1489 of the Civil Code, for the hypothesis that the thing sold is encumbered by burdens or by non-apparent real or personal rights that diminish its free enjoyment and that have not been declared in the contract of sale.

Attorney Chiara Roncarolo

Attorney Maurizio Randazzo