Lease: improvements made to the fund and allowance

Pursuant to Art. 17 L. 203/1982, the improvements that entitle the person who carried them out to an indemnity consist of those interventions that, in addition to being the subject of a prior agreement between the tenant and the property subject to the latter’s consent, even tacit and, as such liable to be proved by conclusive facts, bring lasting utility to the fund, increase its income and production and/or market value. Said improvements may consist, for example, of: carrying out levelling of the leased land; constructing access roads to the land; decreasing chambers allowing for greater productivity of the land, with utilization of the entire productive area and significant time and cost savings

Often, due to the proper alignment of plots resulting from levelling, they receive adequate and rational distribution of water so as to prevent weed growth. The construction of service roads, on the other hand, allows for easy and quick access to the plots, and machinery suffers significantly less wear and tear because it does not have to deal with a bumpy ride.

Normally, the improvements made by the tenant allow, even after the termination of the tenancy relationship, rational cultivation of the land because they have optimized the productive potential of the landlord’s property.

As for the allowance, however, under Art. 17 L. 203/1982, this should be assessed to the extent corresponding to the increase in market value achieved by the fund. Thus, reference should be made to the rent paid during the lease relationship.

On the point of quantifying the allowance, for the purpose of determining the increase in market value achieved by the fund as a result of the improvements (see Article 17 of Law 203/82), the following may be taken into account:

• Of the costs incurred by the tenant in making the improvements;
• of the value of funds adjoining the one leased and/or entirely similar as to the conditions prior to the realization of the best;
• of the market for land for agricultural use, in areas homogeneous in characteristics to that in which the property subject to improvements is located and/or having similar characteristics to the land, subject to lease, but subsequent to the said improvements.

Lastly, it should be noted that the right to the indemnity will become current at the time of the natural expiration of the contract, but only if, on that date, the improvements are still in existence.

Attorney Chiara Roncarolo

Attorney Maurizio Randazzo