Recent changes in urban leasing

7 August 2019

On February 12, 2019, two urban lease bills were published, namely Law No. 12/2019 and Law No. 13/2019, a legislative initiative aimed at correcting situations of imbalance between tenants and landlords, enhance the security and stability of urban leasing and protect tenants in situations of particular fragility, as well as combat lease harassment.

In the urban lease for residential purposes, after many changes, the following stands out:

Term: the minimum lease term for own and permanent housing is now 1 year, with only the exception of this minimum period being contracts for non-permanent housing or for special transitional purposes (namely for professional, education and training purposes or tourist).

Opposition to renewal by the landlord: Opposition to the landlord's first renewal of the contract only takes effect three years after its conclusion, the contract remaining in force until that date, except as otherwise provided by law.

Contract renewal period: The automatic renewal of lease agreements for permanent housing with a term of less than 3 years will be renewable for a minimum of 3 years, unless the parties agree to a different period.

Compensation in the event of late payment by the lessee: the landlord is now entitled to claim (in addition to the rent in arrears) compensation corresponding to 20% of the rent against a value corresponding to 50% in the previous law.

Termination of Contract of indefinite duration: Several limitations are included to the possibility of the landlord to terminate the contract, namely, by repairs when this will result in a location with characteristics similar to those of the leased. The landlord is now required to check no less than 5 years in advance to report it, in contrast to the two years of the previous regime.

Transfer of the lease: The transfer in the event of the lessee's death in favor of a person living with him or her in a civil union or common economy for more than one year no longer depends on whether the tenant has lived in the lease for more than one year.


Amendments to the non-housing urban lease regime were also introduced, between many aspects, limiting the freedom of stipulation conferred on these contracts in previous drafts, in particular by imposing an impossibility to oppose the renewal of the contract by the landlord during the first five years of and limiting the cases in which the landlord may terminate the contract, in addition to the creation of the Injunction on Lease (IMA), an executive title for reimbursement of works and a mechanism to summon the landlord.