Judgment No. 28972 of the Supreme Court en banc of 15 September 2020 - filed on 17 December 2020

The nature of exclusive use in condominium – no "in rem right of exclusive use"

The Supreme Court en banc^[1] ruled on the nature of exclusive use in condominium and, namely, on the possibility of qualifying the exclusive enjoyment by a joint owner of a condominium portion as a "real (in rem)right of exclusive use".

First , it was ruled out that an “in rem right of exclusive use” may be included in the scope of application of the so-called "right of use" and of the rule of "making equal use thereof " under Article 1021^[2] of the Italian Civil Code, even if intended as a fractional or shift use. This was held because «[a]n in rem exclusive beneficial right, vested in a joint owner, over a common part of the building, depriving the other joint owners of the relevant right, i.e. by reserving them a right of co-ownership deprived of its fundamental core, would cause (...) a radical, structural distortion of the said right, since it cannot be doubted that “enjoyment” is an intrinsic aspect of both ownership and co-ownership, unless, of course, the separation of the enjoyment of property is the result of the creation of an in rem right of use statutorily provided».

Likewise,  the possibility was denied of deeming the so-called "in rem right of exclusive use" to fall within the scope of the rules on exclusive use of flat roof slabs under Article 1126^[3]  of the Italian Civil Code, on the assumption that: "If the interpretation of the deed leads one to believe that the subject of the attribution was not actually (...) the property, albeit in a "disguised" way, but an "in rem right of exclusive use" over a common part, without prejudice to the ownership rights vested in joint owners, it is to be excluded that such “in rem” right may be grounded on Article 1226 of the Civil Code”.

Second, the Supreme Court en banc  has dealt, albeit briefly, with cases of individual joint owners being granted apparently unequal beneficial rights and, recognising the exceptional nature of such provisions, ruled out the possibility that they may entail structural changes to the joint ownership of common parts in favour of the  relevant user. The same conclusion was reached, mutatis mutandis,  in examining Article 6, paragraph 2, b), of Legislative Decree No. 122 of 20 May 2005,^[4] as follows: «Likewise groundless is the argument, sometimes asserted, that a statutory acknowledgment of exclusive uses, such as to involve a modification of the right of co-ownership, can be inferred from Article 6, second paragraph, b), of Legislative Decree No. 122 of 20 May 2005, which requires the developer to set out condominium parts and "exclusive appurtenances" in a future construction contract».

The Court also dwelt on the impossibility of including the so-called "in rem right of exclusive use" in the context of easements, on the assumption that "it is quite evident that, if a joint owner were entitled to the "exclusive use" of a portion of a common property under an easement, the other joint owners would be left with nothing but an empty simulacrum". A chance, even a minimum chance, of using the property must indeed be left with the owner of the servient estate.

Finally, the Supreme Court held that the creation of a "real right of exclusive use" on a contractual basis is immediately hindered by the fundamental principles regulating in rem rights, especially the principle of “typicality” of in rem rights. Moreover,  such principle is not denied by the provisions on ownership under Article 42 of the Italian Constitution^[5] as well as by EU law provisions, which, pursuant to Article 345 TFEU, does “in no way prejudice  the rules in Member States  governing the system of property ownership”. On the other hand, as likewise stated by the Supreme Court^[6], «the principle of statutory typicality of in rem rights (...) translates into the rule that private individuals cannot create other types of in rem rights than those statutorily provided, nor can they modify their regime. Accordingly, the powers arising to the holder of an individual in rem right are those set out by law and cannot be validly changed by the parties concerned” (Supreme Court No. 5034 of 26 February 2008)».

In conclusion, the Joint Divisions of the Supreme Court stated that "The agreement having as its object the creation of a "real right of exclusive use" over a portion of the condominium courtyard, which, as such, constitutes a common portion of the building, being aimed at creating an “atypical” model of limited in rem right, such as to affect the essential core of the joint owners’ right of equal use of the common property, depriving it of concrete content, enshrined in Article 1102^[7] of the Italian Civil Code, is precluded by the principle, inherent in the Italian Civil Code discipline,  of “numerus clausus”  and typicality of real rights».

It is therefore necessary to infer from the contract in question whether, at the time of setting up the condominium, the parties  intended to transfer the property or constitute an in rem right of use under Article 1021 of the Italian Civil Code according to Article 1419^[8] of the Italian Civil Code. Otherwise, the provision whereby an in rem right of exclusive use was set up, if the statutory prerequisites for the conversion of the invalid contract^[9]  are met, will be replaced by the grant  of an exclusive and perpetual use between the parties having a nature as a personal obligation.

This article is for information purposes only and neither is nor can be considered as a professional opinion on the topics covered. For further information, please contact Luigi Croce or Elena Granati.

[1] Decision of December 2, 2019, No. 31420, whereby the Second Civil Section of the Supreme Court ordered the transmission of the papers to the First President for possible submission of the matter to the Joint  Divisions given the need to settle the contrast and in light of the particular importance of the issue of the nature of "exclusive use" in  condominium.

[2] Article 1021 of the Italian Civil Code «Use»: «[I] Anyone who has the right to use a thing may make use the same and, if it is fruitful, may collect its fruits as much as is necessary for his/her and his/her family's needs. II] Needs are to be assessed according to the social status of the holder of the right.».

[3] Article 1126 of the Italian Civil Code «Roof slabs for exclusive use»: «When the use of roof slabs or any  part thereof is not common to all joint owners, those who do not have exclusive use are required to contribute one third to the cost of repair or reconstruction of the slab: the other two thirds shall be charged to all joint owners of the building or the part thereof  which the slab serves, in proportion to the value of the floor or portion of floor of each of them.».

[4] « Provisions for the protection of property rights of purchasers of real properties to be constructed, pursuant to Law No. 210 of 2 August 2004, published in Official Gazette No. 155 of 6 July 2005».

[5] «where it requires the terms of acquisition and, precisely, of use, as well as the relevant limits, to be regulated by law, in order to ensure its social function and to make it accessible to everyone, without the functionalization of property offering any reasonable argument in favour of the provision for limited in rem rights created by contract».

[6] See judgment of the Italian Supreme Court en banc No. 2897 of 17 December 2020.

[7] Article 1102 of the Italian Civil Code, «Use of a jointly-owned property»: «[I] Each participant (joint owner) can use the jointly -owned property, provided that such use does not alter the designated use of the same, nor prevents the other participants from making in turn use of the same  according to the law. [II] To this end, the joint owner in question may make the necessary changes at his own expense for the best enjoyment of the jointly-owned property.».

[8] Article 1419 of the Italian Civil Code «Partial invalidity»: «[I]. The partial invalidity of a contract or the invalidity of individual clauses shall cause the invalidity of the entire contract, where it appears that the parties would not have concluded the contract without the part thereof affected by invalidity [1341², 1354³, 1519-octies, 2265].[II]. The invalidity of individual clauses shall not cause the invalidity of the contract, when the invalid clauses are substituted by mandatory rules of law [1339, 1501, 1573, 1679⁴, 1815², 1932², 1962², 2066², 2077², 2115³].».

[9] Article 1424 of the Italian Civil Code «Conversion of a null and void contract»: «[I]. A null and void contract may produce the effects of a different contract, which meets the relevant  substantive and formal requirements  [607, 2701], if, having regard to the intent of the parties, it must be assumed that they would have wanted so had they been aware of the invalidity [1367].».