New rules for the urban lease regime

In Portuguese society, urban leasing has become one of the major social discussions, motivated mainly by the antagonism that exists between many landlords and tenants. It was thus expected that many would call for legislative intervention on the matter. Against this backdrop, Law 12/2019 and Law 13/2019 were published, both dated February 12.

Law 12/2019 came into force to establish the prohibition of harassment during the lease (and sublease). Harassment is considered an act or acts committed by the landlord or a third party interested in acquiring the property, which disturb, embarrass or affect the dignity of the tenant, sub-tenant or persons who legitimately reside with them, subjecting them to an intimidating, hostile, degrading, dangerous, humiliating, destabilising or offensive environment, or preventing or seriously impairing access and enjoyment of the space, with a very explicit purpose: to force the tenant to vacate the property.

In the event of harassment during the lease, the tenant may summon the landlord to take the necessary measures to solve the situation. The landlord will have 30 days to act and/or respond to the tenant. If the landlord does not take any action, the tenant may demand that the landlord pay a penalty of €20 for each day from the end of the 30-day period until the landlord demonstrates compliance with the requests.

On the other hand, Law 13/2019 aims to correct situations of imbalance between tenants and landlords, strengthening the security and stability of the urban lease and protecting tenants in a situation of special fragility. Particularly important are the changes regarding the tenant’s default, the form of the lease and the duration and opposition to the renewal of the lease.

With the entry into force of the new law, if the tenant does not pay the rent, the landlord has the right to demand, in addition to the rent, a compensation equal to 20% of what is due (previously, the landlord could receive a compensation equal to 50%). The landlord will also have a period of 90 days to notify the guarantor, if any exists, in order to be able to demand payment of rents.

Regarding the form of the contract, which must be in writing, it is now established that, in case of a lack of written form, the tenant can prove the existence of the contract, proving that the property is used without opposition from the landlord, as well as demonstrating the payment of the rent for a period of six months.
However, the most profound changes were regarding the duration of the contract and the opposition to the renewal of the contract.

Thus, contracts with a term now must have the duration of at least one year and a maximum duration of 30 years. If contracts are not concluded within the required time limit, they shall be automatically extended or reduced to the said limits. These limits shall not apply to contracts for non-permanent housing or special transitional cases, in particular for professional reasons, education and training or tourism.

On the other hand, the contract concluded within a certain period will automatically be renewed for a minimum period of three years, if there is no opposition to renewal. However, the first opposition to renewal by the landlord only takes effect after three years from the conclusion of the contract. The contract remains in force until that date, unless the landlord or his children need the house for living.

By Dr Eduardo Serra Jorge
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Dr Eduardo Serra Jorge is founding member, senior partner and CEO of lawyers firm Eduardo Serra Jorge & Maria José Garcia – Sociedade de Advogados, R.L., created in 1987.
In his column, he addresses legal issues affecting foreign residents in Portugal.
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