Commercial lease: how to check a company before renting it a property

In brief: before renting a shop, an office or a warehouse to a company, check five things: the filed financial statements, any protests and insolvency proceedings, who really controls it (beneficial owner), the estimated operating credit line and who has the power to sign. This is public data: the Veryfy report from 19€ brings it together in a few minutes, with source and date, without asking the prospective tenant for documents.

Why check the tenant before signing

A commercial lease is a long commitment, and by law it is one. The law on urban property leases (L. 392/1978) provides that:

• the lease of properties used for the industrial, commercial and craft activities listed in the law, or for the habitual exercise of a self-employed activity, may not last less than six years (nine for hotel activities); if the contract states a shorter term or none at all, the statutory term applies (art. 27);
• at expiry the contract renews tacitly every six years, unless notice is given by registered letter at least 12 months in advance; at the first expiry the landlord may refuse renewal only for the reasons provided by art. 29 (art. 28);
• the security deposit may not exceed three months of rent and bears statutory interest in favour of the tenant (art. 11, applicable also to commercial leases by virtue of art. 41).

The practical result: you tie yourself to a company for at least six years, and the deposit covers at most three months of rent. If the company stops paying, the rest depends on its solidity. For this reason the check must be made before signing, not at the first late payment.

If the prospective tenant is a natural person, for example a professional or a sole trader, see instead how to check a tenant before renting a home.

What to check on the tenant company

• The filed financial statements: net equity eroded by more than a third of the share capital (art. 2446 c.c., Italian Civil Code), share capital below the statutory minimum (art. 2447 c.c.) or negative net equity are public signals of an already weakened solidity. The date also matters: a last financial statement more than 18 months old is an old snapshot. To read it without being an analyst, see how to tell from the financial statements whether a company is in difficulty.
• Protests and insolvency proceedings: unpaid bills of exchange or cheques, and proceedings in progress or recent against the company, with source and date.
• The beneficial owner (titolare effettivo): the natural person who really controls the company, reconstructed from the shareholders and offices in the Registro Imprese (Companies Register). The register of beneficial owners is not currently accessible to third parties (see who can consult it), but the Registro Imprese data is.
• The estimated operating credit line: an order of magnitude of the commercial exposure the company can sustain. It is an estimate, not a certainty: see how to read rating and credit line.
• Who signs: the report lists the directors and shareholders shown in the Registro Imprese. Compare the name of whoever will sign the contract with that list; if someone else signs, ask for the document that gives them the power to do so. The report does not verify powers of attorney or delegations.

How to read the signals

Before generating the report you state the purpose ("I am about to sign a contract") and how much you are exposing yourself. For a lease, a reasonable reference is one year's rent, or that of the entire first term: you decide which amount represents the risk you are willing to take. The report compares it with the estimated operating credit line and places it alongside the signals detected:

• No signals and rent below the estimated credit line: the report says so explicitly, with the number of checks passed. It is information, not a guarantee about the future.
• Company incorporated less than 12 months ago: this is not a negative signal, but there is usually little financial-statement history to go on. In these cases who stands behind the company matters more: beneficial owner and shareholders.
• Share capital small relative to the exposure: the report flags it when the share capital is less than one tenth of the amount you declared.
• Rent close to or above the estimated credit line, or protests, proceedings, eroded net equity: this does not mean "do not rent", it means contractual protections matter more.

Contractual protections to evaluate

The report does not decide for you: it compares two numbers and shows you the facts. The tools to discuss with your lawyer or your estate agent are the standard ones:

• Security deposit, within the limit of three months' rent set by art. 11 of L. 392/1978.
• Personal guarantee from a shareholder or the director, or a surety bond (fideiussione). If the guarantor is a natural person, you can verify them with the Verifica Persona (29€, or 49€ with offices, shareholdings and registered properties), declaring the purpose "verification of a guarantor, surety or person called upon to provide a personal guarantee".
• Beware of assignment: under art. 36 of L. 392/1978 the tenant may assign the contract even without your consent, if it assigns the business together with it; it must notify you by registered letter, and you may object only for serious reasons, within thirty days. If you do not release the assignor, it remains liable if the new tenant does not pay. When you receive an assignment notice, check the new company too before the thirty days expire.

Which report to choose

• Verifica (19€): beneficial owner, shareholders and directors, estimated operating credit line, protests and insolvency signals, comparison with the rent. It is sufficient for most shops and offices.
• Decisione (49€): everything in Verifica, plus properties registered to the company and to the relevant shareholders, relationships with other companies and the reclassified financial statements. It makes sense when the rent is high, the contract is long or the tenant belongs to a group.
• A first filter at 5.90€: the micro-product Negative records and insolvency proceedings shows only protests and proceedings against the company, useful for screening more applicants before the full report.

What this check does not do

The report uses only public sources: it does not read the company's bank accounts, it does not know about arrears on other lease contracts, and it does not replace the references or documents you can request directly from the tenant. It shows facts with source and date, and an estimate of the credit line; never a judgement such as "unreliable company", nor a forecast presented as a certainty.