How might a Religious Congregation make use of an unused building?

How might a Religious Congregation make use of an unused building?

These days, many Religious Congregations find themselves owning buildings, big and small, which are no longer in use, and which cannot be used in pursuit of the Community’s mission. These are generally empty, or nearly empty buildings, yet they often require time, energy, and expense for the Congregation members to manage them, given the myriad tax requirements and red tape involved. Amongst these we would note, just as an example, Italian property tax (the “IMU”), routine and special maintenance expenses, including those for maintaining or refurbishing the façade and building systems, landscaping (including seasonal pruning) and so on, and so forth.

It begs the question: how can one convert the building into an income property, to keep the real estate from being a drain on the Congregation?

Obviously, there is no one-size-fits-all solution. Each individual Congregation has its own needs, just as each potential income property is different. There are a number of variables to take into account.

Please find below the main options available:

  • Residential lease

The leasing of buildings for residential purposes is mainly governed by the Italian Civil Code and Law no. 431/1998 (as subsequently amended). Depending on the parties’ needs, one may opt for various types of leases with different terms.

–        Unregulated and rent-controlled lease agreements

Amongst long-term tenancies, we would mention both an ordinary, unregulated (4 year + 4 year term) lease, and a subsidised or rent-controlled lease on a 3 year + 2 year term.

Usually, the most popular choice is the four-year term, with an automatic renewal for the same term at the first expiry. With this option, the rent is not controlled, meaning that the landlord can set the rent amount at the landlord’s discretion.

–        Transitional leasing

Should one need to lease the building for a shorter term, you might opt for a transitional-use lease agreement, with a lease term between one month and 18 months. That contract must include a specific provision stating the transitional need for the lessor and tenant.

  • Transitional lease for students

Should one intend to lease one or more rooms to students, one might opt for a transitional contract for students. This type of contract contemplates a term from six (6) to thirty-six (36) months, and may be executed by an individual off-campus student, or by groups of off-campus students.  These may only be used in traditional university towns (like Rome), or near satellite campuses.

  • Non-residential zoning

The leasing of buildings for non-residential purposes is mainly governed by the Italian Civil Code and Law no. 392/1978. The lessor and lessee are at their liberty to set the rent amount, how expenses are to be shared, and the contract type. They are bound, by such agreement, to the contract term, on any rent increases, the security-deposit amount, any start-up expenses, rules on subletting or assigning the lease, and on the right of pre-emption. Waivers are available for leases with yearly rents above Euro 250,000, provided the lease is in writing.

The minimum term is six (6) years for buildings zoned industrial, commercial, or trade/tourism. If the building is zoned for hotel or theatrical use, the minimum term can be no less than nine (9) years. Shorter terms can be arranged, with evidence of the transitional nature of the activity related to the lease stated.

  • Partitioning the building

Where the building in question is rather large, one might consider partitioning it, that is, breaking it up into two or more buildings, to be sold or leased into one or more units. Beginning in 2014, the most streamlined administrative procedure through which to provide notice of partitioning to the municipality, is through a basic “CILA” (Notice of Works Commencement), with a sworn statement by an expert (architect, surveyor, or engineer). On the other hand, when capital improvements are needed, or a change in zoning, an “SCIA” is required (Notice of Commencement of Operations);

a blueprint generated by an engineer or an architect is required.

Attention: not all buildings may be partitioned, one needs an expert to assess, on a case-by-case basis whether the building in question meets the statutory requirements.

  • Transformation of the building into lodgings, such as holiday homes or hotels, or for other operations such as schools or hospitals

Finally, depending on the size and characteristics of the buildings, one might consider converting the building into lodgings (such as for holiday homes or a hotel) or for other uses (pre-schools, schools, nursing homes, student dormitories, hospitals, etc.) Therefore, once the feasibility of the transaction has been assessed from a variety of perspectives (technical, legal, administrative, economic) we must then consider whether the activities might be managed directly by the Congregation, including through the formation of an ad-hoc legal entity. Alternatively, management may be entrusted to third parties. In the latter case, the Congregation might receive rent in exchange for the lease of the building.

Given the number of variables in play, and the specific, current status of each building, one needs to rely on professionals able to determine the best option on a case-by-case basis. Fiat Lux Legal has, for a number of years, been converting Religious Congregations’ unused real estate into income property, thereby assisting them in the pursuit of their mission.

To find out more or to make an enquiry, you can reach us directly via email at: and our team will be more than happy to provide you with any information you need. We can also set up a meeting to find the best solution for your situation.


Avv. Federica Loreti