Transfer for consideration in agricultural preemption

Law 817/1971 in indicating the type of negotiation that governs agricultural preemption, expressly mentions “transfer for consideration or grant in emphyteusis.” Moreover, it later mentions the word “price,” and likewise the “preliminary sale and purchase agreement” as an instrument that must necessarily be served in order to give due course to the denuntiatio.
From which jurisprudence has drawn the conclusion that any type of negotiation that has the characteristic of constituting a consideration for the transfer of agricultural land falls under agricultural preemption, and provided that the consideration is fungible, that is, that it can be lent by anyone.

The case history that has most interested case law can be summarized as follows:

(a) Sale of bare ownership
In the case of the sale of bare property, it is believed that preemption is due, because the farmer who buys bare property travels part of the road necessary to arrive at ownership of the entire property, and therefore it is in the spirit of preemption to go along with it;

(b) Repurchase sale
A sale with a redemption agreement is subject to preemption, since the acquisition of the property by the exercise of preemption must prevail over the exercise of conventional redemption, given the public interest that characterizes the former case;

(c) Sale of undivided share
The sale of shares of undivided property entails preemption both in favor of the cultivator and in favor of the co-owner who also qualifies as a direct cultivator, because the cultivator in this case is nevertheless favored, albeit pro-rata, regardless of the fact that in the eventual division he may not be given the portion of the fund previously cultivated;

(d) Sale by public auction
The case of sale by public auction, sometimes used by the public administration to make a bankruptcy choice of the purchasing party, must respect agrarian preemption, because it is a case not comparable to the cases of forced sale, administrative compulsory liquidation, bankruptcy, expropriation for public utility, hypotheses, the latter, expressly excluded from agrarian preemption by Art. 8, second paragraph of Law no. 590 of 1965;

(e) Assignment in annuity for life
It gives rise to preemption to transfer the fund in annuity annuity, but not in alimony annuity,
characterized by the buyer’s obligation to pay, for life, food, lodging, and whatever is necessary for his or her needs, including moral assistance. It has been held that in this case the benefit is so personalized that the possibility of preemption is excluded;

(f) Transaction
It is also stated that the transaction does not fall into the type of negotiations that give rise to preemption, given the complexity of the regulation that is intended to be achieved by the transaction;

(g) Corporate transactions
There is no transfer for consideration of rustic land in the event that the land belongs to a corporation and there is a transfer of shares in the corporation, because the transfer involves others taking over membership, not ownership of the corporate assets, which remains with the corporation.
It has been held to be a case of exchange the contribution of agricultural land to a corporation, since the act in that case has as its counterpart the acquisition of membership status . While at other time it was clarified that there is no preemption in the case of contribution of land to a company by a shareholder, since there is no alienation for consideration of the fund in view of the nature and infungibility of the counter-performance of the transfer of the asset, constituted by the status of shareholder;

(h) Exchange
Preemption does not apply in the case of exchange of the fund for another property (Article 8, second paragraph of Law No. 590 of 1965).
Art. 8 of Law 590/1965 by excluding exchange from preemption, refers to every case of exchange and not only to the exchange of agricultural land with other agricultural land, both because there is no such limitation in the legislative text.

(i) Free deeds and division
The law presupposes, for the exercise of preemption, that the fund is alienated with consideration, and therefore it is to be considered that neither legal transactions of gratuitous title, such as donation, nor non-translative but merely declaratory transactions, such as division, fall within the case giving rise to alienation subject to preemption.

(l) Negotium mixtum cum donatione
The Supreme Court has reiterated that the right of first refusal presupposes a transfer for consideration, while if the purchase and sale is used for the purpose of enriching the buyer with the difference between the value of the asset and the established price, a “negotium mixtum cum donatione” can be configured, which constitutes an indirect donation, and, therefore, the aforementioned discipline is inapplicable
In addition, the Supreme Court has said that negotium mixtum cum donatione, a hypothesis that occurs in all cases where property is transferred at a favorable price, constitutes indirect donation, that is, a partially gratuitous act. And again he specified that this act cannot be divided into the two aspects onerous and gratuitous and deem preemption applicable for only one aspect, given the unity of the negotiation case.

Attorney Chiara Roncarolo

Attorney Maurizio Randazzo