Rental Agreement Model in Portugal: Complete Guide and Legal Importance

The rental agreement is an essential document that formalizes the relationship between the landlord (owner) and the tenant (lessee) and defines the conditions of use of a property, whether it is intended for permanent residence, commercial activity or tourist purposes. In Portugal, the legislation regulating rental is present in Law No. 6/2006, of February 27, known as the Urban Rental Law (LAU), which establishes rights and duties for both parties.

Who is the Rental Agreement for?

The lease agreement is important for both the landlord and the tenant, covering various situations, such as:

• Owners of residential properties who want to rent for permanent residence.
• Commercial property owners for business activities.
• Owners who rent for tourist purposes, such as through rental platforms like Airbnb.
• Parking space rental.
• Vehicle or machinery rental.

Each type of lease has specific particularities, which must be reflected in the contract.

Mandatory Parts of a Rental Agreement

Although the lease agreement may include several clauses agreed upon by the parties, there are some mandatory sections that must be included to ensure that the contract is in compliance with Portuguese legislation. These clauses include:

1. Identification of the Parties:
   • The contract must include the complete data of the parties involved, that is, the full name and identification document number of both the landlord and the tenant.
2. Objective of the Lease:
   • Specification of the property and the purpose of the lease (residential, commercial, tourist, etc.). At this point, it is mandatory to include the energy certificate of the property.
3. Terms and Conditions of the Contract:
   • Applicable Regulations: Reference to the Urban Lease Law (LAU) and other relevant regulations.
   • Purpose and delivery of the property: Clear indication that the possession of the property is being delivered to the tenant for the agreed use.
   • Duration and renewal: The duration of the contract must be indicated. For rental contracts for permanent residence, the minimum duration is 5 years (for individuals) or 7 years (for companies), with the possibility of renewal. In rural leases, the minimum term is 5 years, which can be renewed for another 5.
   • Return of the property: Conditions under which the property will be returned to the landlord at the end of the contract.
   • Withdrawal from the contract: Period during which the tenant can withdraw from the contract without penalty (usually one month).
   • Rent value and updates: The agreed monthly rent value and the conditions for annual increases.
   • Expenses and services: Definition of expenses that will be the responsibility of the landlord and tenant, such as water, electricity, gas, among others.
   • Deposit and guarantees: The amount of the deposit to be paid by the tenant as a guarantee and other guarantees required, if applicable.
   • Maintenance and works: Who will be responsible for maintaining the property and whether the tenant has the right to make changes to the property.
   • Sub-leasing: Whether sub-leasing is allowed or not.
   • Contract termination: Conditions under which the contract can be terminated, either by the landlord or the tenant.

The Importance of the Lease Agreement

The rental agreement is the main instrument to ensure that both the landlord and the tenant fulfill their responsibilities and rights. It ensures that both parties clearly understand their obligations, from the rent value to the responsibility for maintaining the property. In addition, it is a way to protect the parties involved in case of disputes or litigation.

Differences in Types of Leasing

In Portugal, there are several categories of leasing, and each of them may require specific adaptations in the contract:

• Housing Rental: Governed by the LAU, with specific rules for properties intended for permanent residence.
• Tourist Rental: This type of rental is regulated by Law No. 63/2013, of August 27, which requires owners to register the property for tourist rental with local authorities and comply with specific tax requirements. The tourist rental contract must specify the duration of stay, cancellation policy and other important terms for guests.
• Commercial Lease: For the use of properties for business activities, the contract must reflect the commercial nature of the use of the property, including details on the operation of the business.

A well-drafted and complete lease agreement is essential to ensure a clear and secure relationship between landlord and tenant. It must include clauses that ensure the protection of both parties, such as the definition of terms, financial responsibilities, and the conditions of use of the property. In Portugal, compliance with legal regulations is essential, whether for residential, commercial, or tourist rentals, to avoid future legal and financial problems.

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