ILN: BUYING AND SELLING REAL ESTATE - AN INTERNATIONAL GUIDE

[BUYING AND SELLING REAL ESTATE IN PORTUGAL]

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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 which were, nevertheless, softened in 2012, favoring and strengthening the landlord position. These lease agreements may also be entered 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 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 a different period. The landlord may legitimately terminate the contract if he alleges the necessity to live in his own house, or the necessity of construction work or maintenance that will result in the disappearing of the house. Otherwise, the agreement will be suspended during the maintenance period, but the tenant has the right to be re-housed in an equivalent house. If the tenant lives in the house for more than 15 years, the agreement can only be terminated by demolishment or severe works that do not allow remaining in the house. The tenant is entitled to oppose to the renewal of the lease, by means of a notice sent with a prior notice that may vary depending on the initial term or on the term of its renewal, as well as to terminate the lease agreement at any time and without justification, provided that 1/3 of the lease duration has elapsed, by means of a written communication sent to the landlord with a prior notice provided in the applicable law.

ILN Real Estate Group – Buying and Selling Real Estate Series

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