Urban Lease Law – Rights and Duties

Learn more about the new urban lease regime, its main changes and the main rights and obligations of tenants and landlords.


Learn more about the new urban lease regime, its main changes and the main rights and obligations of tenants and landlords.

In Portugal, there is a strong preference for home ownership over renting. However, the rent law has evolved in an attempt to stimulate the urban rental market.

New Urban Rental Regime (NRAU) 

Law 6/2006 of 27 February 2006 approved the New Urban Lease Regime (NRAU), which establishes a special regime for updating old rents and proceeds with the amendment of several other legislations. This was followed, in August 2006, by the publication of several legal diplomas to regulate several issues. Such as the elements of the lease agreement and the requirements to which its execution must obey, the regimes for the determination of the corrected annual gross income, the attribution of the rent subsidy and the legal control of companies in leased buildings, among others.

However, the creation of this new regime was not sufficient to stimulate the urban lease market, as some problems that did not encourage investment in this market persisted, namely, with rent contracts before 1990, the difficulty in carrying out maintenance and the eviction procedure.

Review of the urban lease legal regime

Thus, Law nr. 31/2012 of August 14th revised the urban lease legal regime to implement measures that seek to respond to the problems discouraging investment in the urban rental market. The revision of this law grants greater freedom in stipulating the rules regarding the duration of lease contracts and reinforces the negotiation between the parties, facilitating the transition of those contracts to the new regime in a short period. In addition, a particular procedure to evict leased premises has been created, allowing for a speedy property repositioning in the rental market. The landlord also has the power to terminate the agreement for demolition, significant remodelling, or restoration that requires the leased premises to be vacated.

Rental Market Developments

The urban rental market has been transformed in the last few years due to legislative changes, the growth of tourism in recent years, and the consequent increase in the real estate market value. The increase in value of the market has made it more challenging to buy your own home, especially in large urban centres and especially for those who do not have their own capital. However, if you want to be a landlord or tenant, you must know your rights and duties and, for that, knowing the legislation is fundamental.

Rights and duties of tenants and landlords

Tenants have the right to share a house with relatives and family members, enjoy preferential rights in case of sale of the property and terminate the contract respecting the notice period. However, they must comply with the rent payments, with the rules of good neighbourliness and use the property for the purpose for which it was leased.

Landlords are entitled to receive the rent and proceed to its updating, demand the provision of a security deposit, and terminate the agreement, provided that they comply with the prior notice period, although with stricter criteria. They must, however, issue and deliver the receipts corresponding to the rent payments, perform maintenance work and compensate the tenant for the performance of charitable work.

If you know someone who intends to invest in this market or is looking for a house to rent, share this article and help them make a more informed decision.



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