The Italian Legal Framework of Agricultural Land Succession and Acquisition by Legal Persons

Abstract

The work outlines the Italian legal framework of agricultural land succession and of land acquisition by legal persons. The issue of the inter-generational turnover in agriculture is a fundamental issue of the political agenda of the European Union and is particularly relevant in Italy, where farms are predominantly family-owned. For this reason, intra-family succession is the preferred mechanism to transfer farm management to future generations, and it is carried out mainly through the so-called Family Pact (art. 768-bis of the Civil code) before the death of the farmer.

Considering this type of transfer between generations, it is necessary to distinguish three different scenarios (that in which the agricultural holding is currently managed as a sole proprietorship farm business by one of the parents; that in which management of the agricultural holding has already been transferred to the children, but land and buildings remain the property of the parents; and that in which the holding is currently managed as an agricultural company in which the parents retain a majority interest).

The single compendium, a specific legal institution aimed at preventing fragmentation of rural land, is also analyzed, as well as the consequences of the death of its owner. Succession in agricultural land and/or holdings and in agricultural contracts is also considered.

With regard to succession of agricultural land and/or holdings, in case of death of the owner of agricultural land conducted or cultivated directly by him or by his family members, art. 49 of Law no. 203/1982 provides for the coercive establishment of an agricultural lease relationship, as the heir who is also a professional agricultural entrepreneur or a direct farmer becomes tenant by law (ex lege) of the land owned by the hereditary community for a period of 15 years, which corresponds to the minimum duration of leases of agricultural land established/set by art. 1 of Law no. 203/1982. At the end of said period, art. 4 of Law no. 97/1994 states that the heirs who are considered leaseholders of the portions of rural land included in the other co-heirs’ quotas, pursuant to art. 49 of Law no. 203/1982, have the right to purchase, on expiration of the coercive lease of land established by law, ownership of said portions (at the average agricultural value of the land) together with stocks, appurtenances, and annexed sheds.

The last part of the work explores the rules of acquisition of land/holding by domestic and foreign legal persons. There are no limitations in Italian law on the acquisition of agricultural companies and/or agricultural holdings by foreign persons, both individuals and companies. Foreign investments or ownerships of farm property are neither supervised nor forbidden. As a result, a foreign investment is not subject to any specific government approval or consent from a public authority before the acquisition of any shares in a domestic agricultural company. However, the acquisition of a farm property may be subject to general rules related to ownership acquisition, and planning and environmental rules applicable to any other property.