Long-term apartment rental in Portugal in 2023
Could an agreement be terminated prematurely?

When moving to Portugal, the long-term rental of an apartment is one of the first cases to be dealt with. In addition to finding and choosing housing, which is often challenging and not fast, you still need to understand the conditions of a long-term agreement, where a common question is the following: is it possible to terminate the rent agreement prematurely?

In short, the answer is yes, it is possible, but it depends on what is noted in your agreement. Therefore, in this article, let's take a closer look at what is essential to understand and what to pay attention to.

We have an extensive and detailed article about the features of long-term rental in Portugal. You can read it here.

First, I want to remind you that it is crucial and necessary to carefully read the rent agreement. All the conditions and terms are most often spelled out in the contract, and it would be better if you carefully read them at the signing stage. Sure, this also applies to the duration of the agreement and the terms where the landlord and tenant can inform each other of their desire to terminate the contract.

Remember three important things that you need to know and be sure to include them in the agreement if you later want to painlessly terminate the contract early or not renew it:

• notice period (how many months before the expected end of the contract you must notify the landlord)
• minimum initial period of residence (how many months you must live before you can terminate the contract prematurely)
• notification format (oral, written, registered mail or e-mail, etc.)

Naturally, the language barrier here creates specific difficulties, especially for newcomers, when even one sentence written in legal language is quite challenging to read. However, contracts, as a rule, have a standard form, having dealt with which you will quickly begin to navigate even without much knowledge of the language.

Let's look at a couple of examples of what agreement term clauses in a contract might look like.

Example 1: Rent agreement for two years

Prazo do Contato - the term of the contract. This example states that "this agreement is for a fixed period of two years" - "o presente arrendamento é celebrado no regime de prazo certo de dois anos", "beginning July 1, 2021 and ending June 30, 2023" - "com início em 1 de Julho de 2021 e término em 30 de Junho de 2023", and also that "the tenants undertake to fulfill at least half of the contract, that is, at least one year" - "os INQUILINOS comprometem-se a cumprir, pelo menos, metade do contrato, isto é, pelo menos um ano."

In this case, tenants are required to live for at least one year before they can terminate the agreement prematurely.

Example 2: Rent agreement for six months

"The rent agreement is completed for a fixed term and will be valid for 6 (six) months, starting from June 1, 2021, and ending on December 31, 2021, and will be automatically and sequentially renewed for equal periods if neither party objects to its extension, by written notice, […], within the time limits indicated below […]".

"The landlord may prevent automatic renewal of the contract by written notice to the tenant with a minimum of sixty (60) days prior notice before the end date of the actual term or its renewal."

"The tenant may object to the extension of the rent on the terms provided by law and may terminate the rent at any time after 3 (three) months of the term of the agreement by written notice addressed to the landlord with a minimum notice period of 60 (sixty) days until the date on which it intends to enter into force".

Speaking in "human" language, in this particular case, after 3 months of residency, you can terminate the rent agreement prematurely, but you must notify the landlord 2 months before the termination of the contract.

As you can see, everything is clearly spelled out in the rent agreement, but there are also cases when there are no specific terms and conditions in the contract. There are also situations when only one party wants to terminate the lease prematurely while the other opposes it.

In these cases, the Civil Code of Portugal (Código Civil, Part IV, Decree-Law º 47344) will come to your help, where all landlord and tenant obligations are clearly regulated. So let's figure out where to run and where to look for the information you need.

Rules on rent terms begin with Part II - Term (Divisão II - Duração), Article 1094 (Artigo 1094º).

As I noted above, it is clear that it isn't easy for everyone to understand the Portuguese Civil Code, so below, I will explore some of the Code's provisions and analyze those I suppose the most important for the rent agreement in more detail.

So, if you conclude a fixed-term rent (with a fixed rent term) - contrato com prazo certo, then the rent period must be indicated in the contract.

The rent term must be at least 1 year but cannot exceed 30 years and is automatically renewed unless otherwise specified in the contract and if the landlord or tenant didn't inform each other of their reluctance to renew the contract (Art. 1095º-1096º).

In February 2020, some changes were made to the law entitling tenants to more protection. For example, as I noted above, unless otherwise specified in the contract, when concluding a contract for at least 1 (one), it is automatically extended for 3 (three) years. In addition, if the contract was concluded for less than 1 (one) year, it will automatically be extended for 1 (one) year. And if the rent agreement is concluded for more than 1 (one) year, then it will be extended for an equal period (that is, if it is 2 (two) years, then it will be extended for 2 (two) years, etc.). In this case, the tenant can be more confident that he will not be on the street at the landlord's request after a few months of rent.

Moreover, if the landlord doesn't have a good reason (which is also all spelled out in the Code), he cannot voluntarily refuse the tenant the first extension of the contract within three years, but more on that below.

So, in what terms are the landlord and tenant obliged to notify each other of the termination of the contract prematurely? We will understand below.

Rights of the landlord (art. 1097º):

• The landlord may prevent the automatic renewal of the rent by informing the tenant with the following minimum prior notice:

1. 120 days if the original term of the rent or renewal is equal to or greater than six years;
2. 90 days if the initial period of the contract or the period of its extension is equal to or exceeds one year and less than six years;
3. 60 days if the original term of the contract or its renewal is equal to or greater than six months and less than one year;
4. one-third of the original term of the contract or its extension if the term is less than six months.

• The minimum advance notice referred to in the previous paragraph refers to the end of the contract's initial term or its renewal.
• The objection to the first extension of the contract by the landlord will only be valid three years after signing it, and the agreement will remain in force until that date without prejudice to the provisions of the following paragraph.

It's important to explain one thing here. This paragraph means that if you entered into a rent agreement for the first time, then the landlord, on his own initiative, can terminate the lease agreement only after three years. That is, if you have entered into a contract for a year and after this period you are not going to leave anywhere, then the law provides for an automatic extension for three years, and the landlord cannot prevent this (NB! If you don't violate the terms of the rent, of course, that is also spelled out in the law). So the landlord can terminate the rent with you only after three years of residence. But! Unless it concerns the next item.

• The need for housing for the landlord himself or his descendants in the first degree is an exception to the previous paragraph, applying, with necessary adaptations, the provisions of section 1102 and paragraphs 1, 5, and 9 of section 1103.

Rights of the tenant (art. 1098º).

• The tenant may prevent the automatic renewal of the rent by notifying the landlord with the following minimum prior notice:

1. 120 days if the original term of the rent or renewal is equal to or greater than six years;
2. 90 days if the initial term of the contract or the term of its extension is equal to or exceeds one year and less than six years;
3. 60 days if the original term of the contract or its renewal is equal to or greater than six months and less than one year;
4. one-third of the original term of the contract or its extension if the term is less than six months.

• The minimum advance notice referred to in the previous paragraph refers to the end of the contract's initial term or its renewal.
• Without prejudice to the following paragraph, upon the expiration of one-third of the original rent term or its renewal, the tenant may terminate the agreement at any time by giving the landlord prior notice with the following minimum prior information:

1. 120 days of the estimated rent term if the rent term is equal to or greater than one year;
2. 60 days of the expected duration of the contract if its duration is less than one year.

• If the landlord prevents the automatic renewal of the lease, following the terms of the previous article, the tenant may point a notice to terminate the rent at any time, giving notice to the landlord at least 30 days before the expected end of the rent.
• Termination of the contract, following paragraphs 3 and 4, takes effect one Gregorian calendar month after the notification.
• Failure to comply with the prior notice provided in the preceding paragraphs doesn't prevent termination of the contract. Still, it obliges the tenant to pay rent corresponding to the missed notice period unless this is due to involuntary unemployment, permanent disability, or death of the tenant or a person living with him for more than one year.

I can already see your worried look after reading all the points above! And I agree that there are many nuances and exceptions in the law. And that is why, again, I highly recommend that you write down all the conditions and terms in the contract in advance, so as not to understand all this, and also in order to avoid misunderstandings and disagreements with the tenant.

Summarizing all of the above, I can say that concerning long-term rent, Portuguese laws entirely protect the tenant because the landlord can evict the tenant without his consent only if there are adequate reasons, for example, non-payment of rent or a complete reconstruction of the building (not just painting the walls, but a total reconstruction of the building). Therefore, don't be afraid of anything, and feel free to rent housing for a long time. It is much cheaper and more reliable. And as you can see, this is not a process for many years without the possibility of changing something.

Finally, I want to discuss one more critical issue. Before threateningly waving the Portuguese Code in front of the landlord, try to talk and negotiate first. Even if you know that under the terms of the contract, you cannot terminate the rent prematurely, never miss the opportunity to talk. Write a polite letter explaining why and kindly ask for a blessing. As practice shows, many landlords understand that. If it is impossible to agree amicably, the rent agreement and the Civil Code of Portugal will help you!