[BUYING AND SELLING REAL ESTATE IN PORTUGAL]
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The real estate lease is divided into two types: (i) leases for non-housing purposes and (ii) leases for housing purposes. VII.2. LEASES FOR NON-HOUSING PURPOSES The most relevant aspects of lease agreements for non-housing purposes, usually for commercial or industrial purposes, can be freely stipulated by the parties, who are, accordingly, free to agree on issues related to duration, termination, and opposition to the renewal of lease contracts, with subsidiary application of the rules regarding leases for housing purposes. However, in the first five years after the beginning of the contract, regardless of the stipulated period, the landlord cannot oppose the renewal. According to the law, the lease agreements may be entered into for fixed term or be of non-specified duration. The last option is not commonly used in the property market in recent years. If no provision is made by the parties, the contract is deemed to be concluded for a fixed term, for a period of five years. If entered on a fixed-term basis, the duration may be freely agreed between the parties. The agreement can be automatically renewable, unless the parties agree or any of them decide otherwise. Maintenance works are freely regulated between the parties. In this case, if no provision is made by the parties, the landlord is responsible for carrying out the conservation works, and the tenant is deemed as being authorised to carry out the works required by law or by the purpose of the lease. The costs and expenses related with the property are freely agreed between the parties, who are also free to agree the criteria for updating them.
Parties can subject the transmission of tenant’s contractual position to landlord´s permission, although, if nothing is stipulated, the transmission is possible in the most frequent situation of transfer of the commercial or industrial business carried out in the property (“ trespasse ”). Any party may cancel the lease agreement based on a serious breach of duty committed by the other. The legal framework specifies some of those situations that justify the termination of the lease agreement by the landlords, with a compensation for the tenants. Additionally, the contract can be simply terminated by means of a written communication sent by the landlord to the tenant in situations of delay or lack of payment of the rent. On all other serious breaches, the termination can be declared by the Court. VII.3. LEASES FOR HOUSING PURPOSES The lease agreements for housing purposes, unlike the lease agreements for non-housing purposes, have less contractual freedom. Some of the most relevant matters are imperatively established in the law. That is the case of rules regarding the early termination and the opposition to renewal of the lease agreements. These lease agreements may also be entered into for a fixed term or be of non-specified duration. If no provision is made by the parties the contract is deemed to be entered into for a fixed term of five years. Regarding the fixed-term lease agreements, the minimum period for permanent habitation is 1 year. These agreements are necessarily renewable for 3 years, except when the parties stipulate otherwise.
ILN Real Estate Group – Buying and Selling Real Estate Series
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