Is it possible to transfer rented property for free use?

Imagine: you rent a cozy apartment, you've furnished it for yourself, you've put your heart into every detail of the interior. And then, circumstances change, and you decide to transfer it to a friend or relative for free use. But is this legally possible?

What is a gratuitous use agreement?

According to Article 1803 of the Italian Civil Code, a contract of gratuitous use (comodato d'uso) is an agreement by which one party (the commodator) transfers to another party (the commodator) movable or immovable property for use for a certain period or for a specific purpose. At the end of the term, the property must be returned.

But what if you transfer a rented apartment for free use? Can you dispose of it as freely as if you owned it?

Can a tenant sublet a property?

In Italy, a tenant (conduttore) may sublet part of an apartment, but only under certain conditions. If the lease does not contain a direct prohibition on subletting, it is sufficient to notify the owner of the apartment (locatore) of the intention and provide the details of the subtenant.

But for the complete transfer of housing to sublease, the written consent of the landlord is required. This point is regulated by Article 2 of Law No. 392 of July 27, 1978, which states:

"The tenant may not sublease the property in its entirety or assign the lease to third parties without the consent of the landlord. Unless otherwise specified in the agreement, the tenant has the right to sublease part of the property, having previously notified the landlord by registered mail indicating the name of the subtenant, the term of the agreement and the premises being leased."

Is it possible to transfer rented housing for free use?

Since the gratuitous use agreement, as its name suggests, does not provide for payment, is it possible to transfer rented housing under this scheme?

The same principles apply here as with subletting:

• If the lease agreement does not prohibit the transfer of housing for free use, the tenant may do so by notifying the owner of the property.
• If the agreement contains a prohibition on sublease and transfer for free use, it will be necessary to obtain the written consent of the landlord.

Otherwise, transferring the apartment to third parties without the owner’s consent will be considered a breach of the contract and may lead to its termination and eviction of the tenant.

Can a person who has received real estate for free use rent it out?

Let's say the owner of the apartment transferred it to another person under a gratuitous use agreement. Can this person rent it out himself?

The answer is provided by Article 1804 of the Italian Civil Code: the commodator is obliged to use the property exclusively within the terms specified in the contract and cannot transfer it to third parties without the consent of the commodator .

If he rents out the apartment without permission, the commodator has the right to:

• Demand immediate return of property.
• File a claim for damages.

Who must declare rental income?

If the property transferred for free use is then leased to third parties, the question arises: who should pay taxes on the income received?

According to the law, rental income is always taxed in the name of the property owner, even if the actual payments are received by another person. Thus, if the commodator has rented out the apartment, the tax liability falls on the owner of the property (commodant), since he remains the legal owner of the property.

This principle is enshrined in Article 1, paragraph 2 of Legislative Decree No. 504/1992, which states that the property tax is paid by the owner, regardless of who actually receives income from it.

Conclusion

Transfer of rented housing for free use is possible, but requires careful study of the terms of the lease agreement. If there is no prohibition, it is enough to notify the landlord. If the transfer is prohibited, his consent will be required.

The same applies to the commodator: if he wants to rent out the property he has received for use, he needs the owner’s permission.

Legal literacy in such matters will help avoid unpleasant consequences – from termination of the contract to financial sanctions.