Invalid lease agreement and lessee’s right to repayment of rents already paid

By recent decision No. 32696 of 16 December 2024, issued by the Third Division, the Italian Supreme Court clarified whether, and to what extent, the lessee be entitled to repayment of the rents paid in the event of a lease agreement being declared null and void.

More specifically, in the case at issue, a lessee brought legal proceedings on the assumption of having leased – under a contractual relationship that the lessor claimed being  “de facto” – a room in an apartment located in Rome, paying a rent of Euro 500.00 per month from October 2011 to June 2015.

Therefore, the claimant acted to obtain a declaration of invalidity of the lease agreement and an order for the lessor to reimburse the rents paid.

The Supreme Court set out the following legal principle: «in case of invalidity of a lease agreement, the lessee is entitled to reimbursement, pursuant to Article 2033 of the Italian Civil Code, of the rents paid to the lessor in implementation of the agreement, without prejudice to the latter’s right to claim, pursuant to Article 2041 of the Italian Civil Code, the existence of   unjustified enrichment, enforcing an indemnity credit to be, however, awarded to the extent of the decrease in assets suffered in providing the service and not in the measure of the loss of the profit that could have been obtained from the existence of a valid contractual relationship».

So, these are the conclusions that we can draw from the reading of the above judgment and legal principle:

• the lessee's claim for repayment falls within the scope of the rule set out in Article 2033 of the Italian Civil Code (undue payment) according to which “whoever has made an undue payment is entitled to be refunded the amount paid”;

• legislative scenarios in which, notwithstanding the cessation of the contractual obligation, the services cannot be repaid are to be considered exceptions to the general rule (this applies, for example, in the case of termination for non-performance of the agreement);

• since the lessee has, in any event, enjoyed the property - an undisputed historical fact - the lessor is entitled to claim compensation in order to correct the contractual imbalance created, on the basis of an objective assessment of the benefit obtained by the lessee and, therefore, within the limits of the financial loss suffered by the performer of the service rendered by virtue of the invalid agreement. Thus, the lessor is not entitled to obtain the profit lost that it could have obtained by entering into a valid agreement;

• The court cannot rule ex officio on unjust enrichment, which remains an exception reserved to the party (in the present case the lessor failed to appear in court).

The ruling in question also allows us to recall that, as stated by the Supreme Court in its judgment No. 9475 of 9 April 2021, a lease concluded in a verbal form and not registered, is affected by relative and protective nullity that can only be enforced by the lessee and cannot be established ex officio by the court.