Primary Alteration To New Urban Lease Regime

On 14th August 2012, Law 31/2012 has gone into effect which approves the new Urban Lease Regime.

The inflexibility of the previous regime necessitated these laws, though certain social concerns should still be observed.

There have been a number of revisions to the previous laws, but the most important are highlighted below:

Changes to Mandatory Time Period

Previous Law -- All leases would have a mandatory minimum of five years.

New Law -- Lease duration can be negotiated by the interested parties. If no agreement is reached, it is assumed that the lease is set for two years. This lease can be set to automatically renew.


Incidence of Death

Previous Law -- In the event of a tenant’s death, the lease will be immediately assigned to the spouse, common law spouse, or the closest relatives.

New Law -- As with the previous law, the lease will be transferred to the spouse, common law spouse, or closest relatives, but for a period of two years.

By law, beneficiaries of the lease assignment cannot hold purchased or rented property within the same municipality. This includes:

  • Lisbon
  • Oporto
  • Neighboring Municipalities

Lease Termination

The following are reasons for which a landlord may legally terminate a lease agreement:

Overdue Rent

Assuming a tenant fails to pay rent for two consecutive periods, the landlord has the freedom to terminate the contract if the rent due is not paid until the end of the third month.
 

Habitual Late Payment

Tenants are responsible for paying on time, and if they for any reason weight more than eight days after the due day four times in one year, the landlord is free to terminate the contract.

The landlord can terminate the lease for non-payment that lasts for a period of three months.

So long as at least two years notice is given, the landlord is free to notify the tenant of the intent to terminate the contract. It should be noted that the landlord is also free to terminate the lease in the event that the tenant does not vacate the residence on the day the lease ends.

The landlord may terminate the lease if it is his/her preference to demolish the building or work on the property.

--A court of law may be notified and utilized if the tenant does not comply with the above for any reason.

Update to Rents

The change in laws also calls for an update to the rent values which involves the following:

Landlord must propose a new rent to the tenant
Tenant must accept or counter.
A new value will be agreed upon
If an agreement cannot be reached, the landlord must pay five years rent and terminate the agreement.

Exceptions

Tenants who are having financial difficulties will have gradual increases in rents over the course of five years.

A disabled tenant (60%) or a tenant who is over 65 years of age will also be an exception.


Source: NDR.pt


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Published in: Taxation / Portuguese Life / News and Updates / Money