“In Portugal, it would be very difficult” to evict Maricarmen, by Joana Pinto Monteiro

“In Portugal, it would be very difficult” to evict Maricarmen, by Joana Pinto Monteiro

In Portugal, a person over the age of 65 who has lived for decades in a rented property may benefit from legal protections that do not apply in the same way to other tenants. Where an older tenancy agreement is concerned, the law establishes specific rules that may significantly restrict a landlord’s ability to terminate the lease. Moreover, that protection does not disappear simply because the property changes ownership.

“In Portugal, it would be very difficult to obtain an eviction order in these circumstances,” explains Joana Pinto Monteiro, Partner at Sérvulo & Associados and Invited Assistant at the Faculty of Law of the University of Lisbon.

The lawyer is referring to a situation in which there has been no breach of the tenancy agreement, such as non-payment of rent or improper use of the property. “We are not analysing situations involving contractual breaches, which could be addressed through other legal mechanisms,” she emphasises.

What changes when the tenancy agreement is old?

On that assumption, and considering a tenancy agreement entered into before the Urban Lease Regime (RAU) came into force in 1990, the transitional provisions of the New Urban Lease Regime (NRAU) would apply.

Article 36 of the NRAU establishes that where a tenant is aged 65 or over, or has a certified disability with a degree of incapacity of at least 60%, and those circumstances are duly invoked and evidenced, the old tenancy agreement does not transition to the NRAU under the same terms.

“They remain subject to a special protective regime, particularly regarding rent and termination,” explains Joana Pinto Monteiro.

Can an old tenancy agreement never be terminated?

This does not mean, however, that an old tenancy agreement can never come to an end. Article 1101 of the Portuguese Civil Code sets out specific circumstances in which a landlord may terminate an open-ended tenancy agreement.

These include a “housing need of the landlord or their first-degree descendants” or the “demolition of the building or the carrying out of major reconstruction or restoration works requiring the property to be vacated”.

Under the general regime, landlords may also terminate a tenancy by giving five years’ notice. However, this option does not apply to residential tenancy agreements entered into before the RAU came into force.

“Regardless of the tenant’s age or disability, landlords cannot terminate these agreements simply by giving five years’ notice,” the lawyer clarifies.

What if the building is sold to a property investment fund?

For a property investment fund acquiring a building with the intention of recovering the flats and using them for another purpose, this distinction is crucial: the purchase of the property does not create a new tenancy agreement, nor does it allow the new owner to start afresh with existing tenants.

“The sale of the property does not affect the tenancy agreement, which is automatically transferred to the new owner,” explains Joana Pinto Monteiro.

In addition, the tenant enjoys a right of first refusal in the acquisition of the property, although the specialist notes that this right must be exercised “under the same terms and conditions as the proposed transaction”, which may make the purchase financially unviable for someone with limited means.

Read the full article in Portuguese here.