Residential lease agreements signed before the Urban Lease Regime (RAU) came into force, approved by Decree-Law no. 321/90, of 15 October, and subject to the regime set out in articles 35 or 36 of the New Urban Lease Regime (NRAU), approved by Law no. 6/2006, of 27 February, were commonly referred to as “lifelong”, due to their apparent impossibility of change, both in terms of rent increases and their apparent impossibility of termination.
- The first thing to check is whether or not the landlord has transitioned the lease to the NRAU, under the terms of Law 6/2006 of 27 February.
If the landlord has not made this transition, he can no longer do so in the following cases:
- When the RABC (Corrected Annual Gross Income) of the tenant’s household is less than five RMNA (Annual National Minimum Wage);
- When the tenant is aged 65 or over;
OR
- When the tenant invokes and proves that they have a disability with a proven degree of incapacity equal to or greater than 60 percent;
OR
- When the tenant invokes and proves that the tenant’s spouse, civil partner, or a first-degree relative with a proven disability equal to or greater than 60 percent has lived in the property for more than five years, and the household’s RABC is less than 5 RMNA.
In the situations described above, rents can only be updated according to the legal coefficients applied each year, on the value of the rent in force, and there is no other legally prescribed way of updating these rents.
So what can the landlord do about these situations, according to the plus housing package?
A compensation mechanism for landlords under so-called “lifetime” contracts was approved by Decree-Law no. 132/2023 of 27 December, which will come into force on 1 July 2024, when landlords can apply for this financial support, which will be provided by the Housing and Urban Rehabilitation Institute.
For landlords to be able to access this support, the following requirements must be met:
- The rent may not be higher than that defined on the date of entry into force of the aforementioned decree-law, without prejudice to annual updates based on the legal coefficients;
- The monthly rent for contracts covered by this law may not exceed 1/15th of the taxable value (VPT) of the leased property, divided by 12 months.
The compensation will operate as a monthly, non-refundable subsidy, the amount of which will correspond to the difference between the monthly rent due on the date of entry into force of this decree-law and the amount corresponding to 1/15 of the VPT, divided by the 12 months of the year.
Créditos: <a href="https://br.freepik.com/fotos-gratis/foto-de-baixo-angulo-da-fachada-de-um-edificio-moderno-branco-sob-um-ceu-azul-claro_17465724.htm#fromView=search&page=1&position=1&uuid=15e9dc0e-3b36-43cd-9ae0-eb78cf43df7b">Imagem de wirestock</a> no Freepik
