In the Italian real estate scene, there is a legal institution that often generates confusion and misunderstandings during sale-purchase negotiations: the surface right. This is a particular form of ownership that separates the ownership of the building from that of the land on which it stands, creating specific dynamics that every operator in the sector should know in order to avoid unpleasant surprises.

Understanding the right of superficies is crucial not only for those working in the real estate sector, but also for those approaching the purchase of a home, especially if they are dealing with properties from subsidized housing or located in so-called “167 zones.” In fact, lack of knowledge of this institution can lead to misunderstandings, disputes and significant economic losses.

What is surface right: the normative basis

Surface right finds its regulation in Article 952 of the Civil Code, which states that “the owner may constitute the right to make and maintain above the ground a building for the benefit of others, who shall acquire ownership thereof.” In practical terms, this means that it is possible to separate ownership of a building from ownership of the land below.

This is a “minor” or “partial” right in rem, which differs from full ownership precisely because of its limited nature. One who buys a property under a right of superficies becomes the actual owner of the “walls” of the dwelling, but not of the land on which it is built. The land remains the property of another party, which in most cases is a public entity, typically the municipality. This separation arises from specific urban planning and social policy needs. Municipalities use the right of superficies as a tool to lower real estate prices and make housing affordable for the less affluent segments of the population. By not having to purchase the land, developers can in fact offer lower prices while maintaining acceptable profitability margins.

How subsidized housing works

Most real estate in right-of-way originates in the context of subsidized housing, governed by Law 167 of 1962. This system, also known as PEEP (Popular and Economic Housing Plan), requires municipalities to make land they own available for the construction of residential properties for sale at subsidized prices.

The mechanism is relatively simple: the municipality enters into an agreement with construction companies or housing cooperatives, granting them the right to build on municipal land for a specified period, usually 99 years. In return, the builders agree to sell the apartments at capped prices and only to individuals who meet certain requirements.

The agreementis an actual notarial deed that regulates all aspects of the relationship between the municipality, the developer and the future owners of the properties. This document, which must be attached to every deed, establishes precise constraints: who can buy, at what price, after how long it is possible to resell and under what conditions.

The constraints and limitations of surface ownership

The purchase of a property under the right of superficies entails the acceptance of a number of constraints that significantly limit the freedom of disposition of the property. The first and most important is the constraint of the maximum transfer price: whoever decides to sell the property cannot do so at the free market price, but must comply with the price imposed by the agreement, which is generally lower than market values. Then there are subjective constraints, which relate to the requirements of the buyer. Often it is required that it is a purchase for the first home and that the household does not exceed certain income limits. Some municipal regulations also provide time constraints, stipulating that the property cannot be resold before a certain number of years after purchase.

A crucial aspect that many people underestimate is the duration of the surface right. Upon expiration of the term stipulated in the agreement, typically 99 years, the right expiresand ownership of the property automatically reverts to the landowner, without compensation. This means that, as the years go by, the value of the property tends to decline as it approaches expiration.

The economic impact on buying and selling

From an economic point of view, an apartment purchased under a leasehold right typically costs 20 to 25 percent less than a fully owned property. However, this initial affordability must be evaluated considering future limitations and the gradual depreciation of the property. The lower commercial value compared to full ownership is reflected not only at the time of purchase, but also upon resale. In fact, real estate under surface rights has a narrower market, as many potential buyers prefer to avoid the constraints and complications associated with this form of ownership.

Particularly problematic is the situation of properties whose covenant is nearing expiration. An apartment with only 20-30 years of residual surface right can see its value plummet dramatically, making it almost impossible to sell on reasonable terms.

The consequences of a non-compliant sale

One of the most serious mistakes a person who sells a property under a surface right can make is to fail to properly inform the buyer of the special nature of the property. Case law has clearly established that surface property is “ontologically different” from full ownership, and selling one by passing it off as the other constitutes breach of contract. The consequences can be severe: the buyer can seek termination of the contract for breach, a reduction in price, or damages. In some cases, particularly in Rome, there have been situations of real legal chaos, with hundreds of open litigations and blocked purchases and sales due to sellers who had not complied with the conventional constraints.

It is essential for every seller to check carefully, through a cadastral survey and examination of the covenant, whether his or her property is encumbered by surface right and what specific constraints it entails. Only with this knowledge can negotiations be set up correctly and future problems avoided.

Conversion to full ownership: redemption

Fortunately, the law provides for the possibility of transforming the surface right into full ownership through the mechanism of redemption. The procedure varies from municipality to municipality, but generally involves the payment of an amount determined according to criteria established by the agreement or subsequent municipal resolutions. Redemption has obvious advantages: it removes constraints on the sale, increases the value of the property, and removes the uncertainty associated with the expiration of the surface right. However, it also entails an additional cost that must be carefully weighed against the overall value of the transaction.

Some municipalities have introduced concessions to encourage redemption, such as 50 percent reductions for those who make the payment quickly or the possibility of installment of the amount due. It is always advisable to check with the relevant municipal office to see what opportunities are available.

Practical tips for operators and buyers

For those in the real estate business, the management of real estate under surface rights requires special attention and specific expertise. It is essential to always verify, from the earliest stages of negotiations, the legal nature of the property through a cadastral survey and examination of conventional documentation. During negotiations, transparency is crucial: any constraints and limitations must be clearly set out to the buyer, preferably in writing. It is also important to consider whether it is worthwhile to redeem before the sale, considering the costs and benefits of the transaction.
For buyers, the advice is not to be dazzled solely by the affordable price, but to carefully consider all aspects of future liens and restrictions. The assistance of an experienced notary is always recommended to fully understand the implications of the purchase.

Surface right is an important social policy tool, but it requires knowledge and attention to be managed correctly. Only with the right information can what is often perceived as an obstacle be turned into a conscious and profitable investment opportunity.