Lease Agreement

In practice, the owner assigns the use of his property to the lessee upon payment of a certain remuneration, known as rent.

There are 3 types of lease with the respective 3 types of contracts, namely: Housing Lease Agreement, Rural Lease Agreement and Commercial Lease Agreement.

Housing Lease Agreement

The contract for this type of lease, the most common, must be signed by the owner, the tenant and the guarantor (if the owner requires one).

The contract must be formalized in writing and 3 copies must be made, all equally signed by the parties involved, as follows: one will remain with the landlord, the other with the tenant and the third copy will have to be delivered to the Tax Office in the area of the property. The contract is subject to payment of Stamp Duty . The amount of tax is equivalent to 10% of the agreed rent amount (or the amount of the rent increase , in the case of a contract to increase the rent) and will have to be paid by the landlord.

What information should be included in the Housing Lease Agreement?

The Housing Lease Agreement must contain the following information:

• Identification of the parties (place of birth, date of birth and marital status);
• Identification and location of the leased property;
• The purpose for which the lease is intended: in this case the lease is for the tenant's dwelling;
• Data on the User License (number, date, issuing entity or reference);
• The amount of income;
• Date of execution of the Lease Agreement.

If you wish, you can use this Lease Agreement Model for Housing purposes , made available by DECO .

What is the duration of a Housing Lease Agreement?

The urban rental contract for housing can be signed for a fixed term or for an indefinite period, and in the contract with a fixed term it can be agreed that, after the first renewal, the lease has an indefinite duration. In the absence of a stipulation by the parties, the contract is considered concluded, with a fixed term, for a period of 2 years. The period must be included in a clause inserted in the contract and cannot exceed 30 years, automatically reduced to the aforementioned limit when exceeded.

Opposition to renewal of a fixed-term Lease Agreement

The time before the termination of a lease agreement will depend on the initial term of the agreement or its renewal and whether it is the landlord or the tenant who terminates. we have:

Landlord:

The landlord may object to the automatic renewal of the contract by notifying the tenant, in accordance with Articles 1097 and 1098 . To do so, you must respect the minimum notice period provided for by law, which is determined according to the duration of the contract/renewal, as referred to in the following table:

P.ex. if the Lease Agreement was signed initially, or in a subsequent renewal, for a period with a fixed term of 24 months, the landlord will have to notify the tenant of his opposition to the automatic renewal no less than 240 days in advance.

Respecting the aforementioned period, it will suffice for the tenant to be notified by registered letter with acknowledgment of receipt. In this link you can find a draft of the opposition letter to the automatic renewal of a Lease Agreement (with fixed term) ,

Tenant:

In the case of the tenant, he may also object to the automatic renewal of the contract by notifying the landlord, in accordance with Articles 1097 and 1098 . To do so, you must respect the minimum notice period provided for by law, which is determined according to the duration of the contract/renewal, as referred to in the following table:

Can a landlord terminate a tenancy agreement?

The Lease Agreement may be terminated by the landlord when it concerns:

• Non-compliance by the lessee , namely due to non-payment of rent , charges or expenses that are his responsibility. It is considered that there is a breach likely to terminate the contract before the end of the foreseen period, when:
  • The delay in payment is equal to or greater than 3 months ;
  • The lessee was late in paying the rent, for a period longer than one month, and this occurred more than 1 time during the term of the contract in question;
  • The lessee was late in paying the rent, for a period exceeding 8 days, for more than 4 times, consecutively or interspersed, within a period of 12 months, during the term of this contract.
• The demolition of the building or the carrying out of deep work on the property (provided that the cost of the intervention is at least 25% of the VPT-Taxable Asset Value of the property). In this case, the landlord will have to deliver proof of work to the council and pay compensation to the tenant equivalent to 2 years' rent.
• The need for the landlord to inhabit the property, or their descendants in the 1st degree.

In order to cancel the Lease Agreement, the landlord must notify the tenant of the eviction order, in one of the following ways (duly substantiated, referring to the obligation that the tenant has not fulfilled):

1. Separate notification ;
2. Personal contact through a legal representative (lawyer, solicitor or enforcement agent) demonstrably mandated for this purpose;
3. Writing signed and sent by the landlord.

Can a tenant terminate a Lease Agreement?

The Tenant can also terminate the contract before its expiry, however there are legal deadlines to respect. According to article 1098º nº 2 of the Civil Code , after 6 months of the conclusion of the contract, the tenant can notify the landlord with 120 days in advance that he intends to leave the dwelling. If you do not comply with the notice period, you must pay the rent corresponding to that period.

Transmission in case of death of the tenant

In the event of the tenant's death, the lease contract is transferred to the following persons , in the same order: spouse; person with whom the tenant lived in a de facto union; parent who lived with the tenant for more than a year; child or stepchild under one year of age, or who is a minor; child or stepchild under the age of 26 who is still studying; child or stepchild who lived with the tenant for more than a year, with a disability with a degree of disability greater than 60%.

Commercial Lease Agreement

The commercial, industrial lease contract or for the exercise of a liberal profession is part of the typology of non-housing contracts. In this case, there is great contractual freedom for both parties.

This type of contract differs from the contract for the assignment of exploitation or the lease of an establishment, since the former temporarily assigns the enjoyment of a property against payment, with the aim of carrying out a commercial activity there. The second temporarily assigns, for consideration, the economic unit constituted by a certain commercial establishment, of which the enjoyment of the property where it is installed forms part.

What documents are needed?

The contract must be formalized in writing in triplicate, with all copies equally signed by the parties involved, as follows: one will remain in the possession of the landlord, the other in the tenant and the third copy will have to be delivered to the Tax Office in the area of the property . The contract is subject to payment of Stamp Duty . The amount of tax is equivalent to 10% of the agreed rent amount (or the amount of the rent increase , in the case of a contract to increase the rent) and will have to be paid by the landlord.

The term of the contract is 5 years and the following documents are essential for its preparation:

• Citizen Card of the tenant, landlord and guarantor (if any);
• Commercial Registry Certificate ;
• Land Registry Certificate of the content of the description and all inscriptions in force, issued by the Land Registry Office;
• Land Book or certificate of the content of the matrix article and the asset value, issued and updated by the Finance Department;
• Use license issued by the City Council less than 8 years ago.

Rural Lease Agreement

The Rural Lease Agreement applies to the lease of rustic buildings, used for agricultural or livestock purposes.

This type of lease covers the tenant's land and dwelling, permanent non-forest vegetation (eg fruit trees) and buildings intended for the purposes of farming or livestock (eg cellars, barns, stables, mills, barns) .

What documents are needed?

• Identification of the granting parties (with indication of their tax identification number and residence or registered office);
• Identification of the property object of the lease (the purpose for which it is intended, the rent amount and the date of its conclusion);

The landlord has 30 days, after signing the contract, to deliver the original to the finance department of his residence or registered office.