How many types of rental contracts are there and which one to choose?

 How many types of rental contracts are there and which one to choose? post thumbnail image

Have you taken a quick look online and almost lost yourself in seeing how many types of rental contracts exist? You know, choosing which one is right for you can seem like a really difficult task.

Here, however, that in this guide we have chosen to outline in a complete and exhaustive way everything you need to know to best identify the type of rental contract that’s right for you.

Whether you are the landlord, that is the one who leases an asset, or the tenant, the one who benefits from it, we are sure that a pinch of clarity on the matter will not hurt.

The topic is undoubtedly vast, but above all it is constantly evolving: how many types of rental contracts are there? Which are the most used ones? Which one should you opt for in individual-specific cases?

Taking a small step back, even before raising these doubts, you have probably already wondered if, based on your needs, it was more convenient to opt for a mortgage or a lease. If you had not already done so, we have decided to run to your aid on this too by providing you with all the appropriate advice.

Types of rental contracts: how they are divided

To meet the doubts of many web users who groped every day in the dark of unclear and fragmentary notions, here comes this detailed practical guide.

Are you also part of this confusing category of users? Don’t worry, it will only take you a few minutes of your time and everything will be easier.

Of course, it is always good to emphasize that each type of contract has different regulations and rules to follow in terms of duration, notice times for termination, renewals, tax regime, etc.

There is no better rental contract than another, but there is undoubtedly the one that best protects and safeguards the landlord and the tenant based on the specific situation.

Let’s now analyze what are the various possibilities of choice with regard to the types of rental contracts for residential buildings.
Residential rental contracts: here are the alternatives

How many types of rental contracts are there and how are they divided?

  • Free rental agreement
  • Rental agreement with agreed fee

The latter in turn divided into:
– Transitional
– Conventional
– For university students

Free rental agreement

The historic, timeless rental contract with free rent, better known as “four plus four”. Doesn’t it tell you anything? The free-rent rental contract is one of the most used and long-lived leases in Italy.

It has been called a free fee precisely because it leaves full freedom of choice to its users to determine the specific variants in place, whether they are related to the fee itself or to other specific characteristics of the contract.

The law has only established a minimum duration of four years which can be extended for another four , tacitly precisely, except for prior cancellation and personal agreements between the parties.

A light and innovative variant can be applied to this type of lease: the so-called dry coupon.

A subsidized tax regime that allows both the landlord and the tenant to enjoy tax advantages. In this case, however, the contract will take the name of a lease agreement with a dry coupon .

Rental agreement with agreed fee

The type of rental contract with an agreed rent requires that there is a preliminary agreement between the owner and the future tenant about the sum relating to the monthly rent. All that simple?

To decree what is the objective fee to be applied to a given month, the trade associations have drawn up real tables, which according to a cross between specific data linked to geographical position, type of property, finishes, etc., provide useful parameters to have numerical values ​​to refer to.

Therefore, orienting themselves in these macro-bands, the homeowner and the future landlord will be able to agree on the rent and thus draw up a real contract.

Naturally, even by choosing the contract with an agreed fee, barring legislative changes, it will be possible to opt for the dry coupon, or traditionally the one that provides for the updating of the monthly fee based on ISTAT parameters.

The rental contract with an agreed rent is often used for transitory situations in which it is known from the outset that the tenant will have to occupy the property only for a specific and often short period of time .

So then it was necessary to identify sub-categories, to protect both parties that make up a lease in an even more detailed way .

Paradoxically indeed, in recent years, short leases are the most chosen in Italy , so they require a clear and unambiguous regulation to protect the landlord and tenant as much as possible.

Here we will analyze the specific sub-categories related to the type of contract with an agreed fee.

Transitional lease agreement

Having a contractual duration of fewer than four years, the transitional rental contract provides for the possibility of extending the agreement up to 18 months in total from the signing of the contract onwards.

The transitional lease contract must necessarily be “justified” by conventional reasons which for convenience can be divided as follows:

  • Apprenticeship
  • Needs related to the employment contract
  • Professional training
  • Active search for employment in that particular territory

This particular type of contract can be stipulated only and solely by referring to the relative Ministerial Decree .

Conventional rental contract

The agreed rental contract has a minimum duration of three years, with the possibility of renewing the agreement for the two following the expiry of the first three.

Otherwise, one could think of renewing the contract for another three years after the first three, barring any and possible cancellations .

The agreed rental contract is used and above all very appreciated because it makes use of a controlled rent , that is, dictated by a table drawn up area by area and by tax breaks for those who choose it.

Rental agreement for university students

One of the latest and undoubtedly most innovative trends in the world of leases is linked to the choice of using a rental contract for university students.

This kind of agreement is widely used in particular areas of Italy, where the real estate market linked to student leases is booming. But how does this kind of contract work?

The duration decided for a lease to university students varies from a minimum of six months to a maximum of three years . The reason for this characteristic is evidently linked to the course of study undertaken by the conductor.

The renewal, unless canceled by the tenant (one or three months before the deadline), is automatic for a duration equal to that signed in the initial agreement phase.

Who can use this formula? The contract can be signed by the individual student or by a group of university students who decide to live under the same roof.

To honor the contractual agreements, the conductor must be a university student enrolled in a university located in a municipality other than the one in which he resides.

As for other types of contract with an agreed fee , even if you choose this formula, you will have to comply with the aforementioned Ministerial Decree.

Tourist lease: this is how this particular arrangement works

What if it were a tourist rental instead? Although it is clear that the need to make use of a “traditional” lease is much more frequent, however, the existence of this new lease formula must also be taken into account .

The need to regulate tourist rentals was born precisely in conjunction with the explosion of holiday homes and apartments used for this kind of service. Here, then, we start talking about tourist rental. Let’s find out what it is and how it could be used.

It is quick to understand that the tourist rental allows a person, defined as a tenant, to use a real estate property for a short set period of time, namely that of holidays.

A difference between all the other types of lease agreements and the tourist one, lies in the impossibility for the latter to associate his residence with that property.

The tourist lease is intended as a one-off when a specific property is used, without continuity repeated over the years.

If, on the other hand, it should be a continuous relationship that goes from year to year for the holiday period, then we talk about a holiday rental and an ad hoc contract is stipulated.

Commercial lease agreement

After having adequately dealt with the topic relating to residential leases and their so varied facets, it is clear that we could not have left the commercial lease agreement aside.

How is it articulated? How can you protect yourself?

Let’s start by specifying that this kind of agreements are regularly formulated for structures that have a different intended use from the housing one.

The exercise of a commercial activity, be it tourism, artisanal, industrial or professional self-employment : in short, any new commercial opening must be regulated by this type of contract.

As also happens for residential leases, also in this case, it is possible to apply the dry coupon with a rate of 21%.

The dry coupon is applicable only to certain types of commercial premises , such as those of cadastral category C1 with an area not exceeding 600 square meters excluding appurtenances.

Transitional commercial lease

The first and most important condition for using this formula is that the agreement between the parties is strictly temporary . The temporary transitional lease contract provides for a duration of less than six or nine years , which is the standard duration of the other types of commercial agreements.

Of course, it is clear that the conditions relating to the short duration of this type of agreement must be put in writing and justified in the contract phase: it all depends on the use that the tenant will make of the property.

Commercial lease 6 + 6:

The most used way to regulate the commercial lease is undoubtedly this. It provides for a minimum duration of the agreement for six years with the possibility of automatically renewing the contract for another six years, unless prior cancellation. There is no law that regulates the monthly rent in this case, so the parties are free to agree independently.

Commercial hotel lease 9 + 9

Hotels, motels and bed & breakfasts are directly involved in this type of commercial lease. It was necessary to draw up a real ad hoc contract dealing with this kind of structures, deciding a duration that could never have been less than nine years.

In fact, it is possible that the contract will be renewed for another nine years after the expiry of the first, or terminated with necessary notice.

Rental Agreement Guide: Leasing has never been easier

Did everything seem too complicated to you? At the beginning of this reading, it probably seemed impossible to think of being able to choose which was the best solution for a residential lease agreement that suited your needs.

We have increased the dose of your initial doubts, underlining how complicated it is to navigate between all types of lease contracts existing in Italy.

It is clear that, however, after reading this guide carefully, everything will be more obvious and schematic, we are sure!

Whether you are the tenant or the landlord, our goal is to provide adequate advice so as not to arrive unprepared and perhaps misinformed when signing a lease.

Tax concessions, agreements on possible price fees, flexible or modifiable duration of the contract : in short, all you need to do is get adequate information and choose the one that best suits your needs.

It is clear that the logistical aspects related to a rental contract are really many and vary according to what you choose. Dry coupon, taxes, APE certification , and so many and many other micro-aspects cannot be overlooked.

What we can advise you, in any case, is to inform yourself independently and then contact a professional in the sector such as a licensed real estate agent, who will follow the practice with you precisely to avoid running into unpleasant or cumbersome situations that need to be solved in games that are now done.

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