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In the lease for non-habitual purposes — shops, offices, warehouses, offices — the law gives parties much more freedom than in housing: under the terms of Article 1110, no. 1, of the Civil Code, the rules of duration, denunciation and opposition to renewal ‘are freely established by the parties’.
But this freedom has three brakes that catch many landlords by surprise: in the absence of a stipulation, the contract is five years; In the first five years, the landlord cannot oppose the renewal, whatever the term written in the contract; and the denunciation is only possible on two grounds, with compensation to the lessee and workers. If you rent a commercial space in Portugal, this is the article you should read before signing the next contract.
The essentials in 30 seconds
- In the silence of the contract: 5 years correct deadline and complaint by the lessee with a minimum notice of 1 year (art. 1110.º, no. 2).
- the supplementary renewal is for equal periods — or for 5 years if the deadline is shorter (No. 3).
- In the first 5 years the landlord cannot oppose the renewal, regardless of the stipulated period (No. 4).
- The complaint by the landlord only applies to subparagraphs b) and c) of art. 1101.º and obliges the indemnify the lessee and workers (art. 1110.º-A).
What counts as a non-home lease
The Article 1067, no. 1, of the Civil Code Divide the urban lease in two: housing or non-homework end. When the contract says nothing, paragraph 2 sends a look to the skills of the place “as is the result of the license to use”. and paragraph 3 resolves the lack of license: “the lease is valid as housing if the place is habitable or as non-homework if it is not, unless another destination has been given to it”.
The Article 1108 It delimits the scope of the special rules: ‘to urban leases for non-hospital purposes, as well as, with the necessary adaptations and together with the general regime of civil leasing, apply to rustic leases not subject to special regimes’.
Two border cases deserve an express clause in the contract:
- end not defined — Article 1027 allows the lessee to apply the leased “for any lawful purposes, within the normal function of things of the same nature” when the end does not result from the contract or circumstances. Not writing the end is giving up controlling it.
- plurality of purposes — Article 1028 orders its regime to be applied at each purpose; If there is a main purpose and other subordinates, “the regime corresponding to the main purpose will prevail”.
- mixed leases (urban and rustic part) — Article 1066 defines the criteria; When in doubt, the lease is taken by urban.
Duration and renewal: what the law applies if the contract is silent
| Question | supplementary regime | legal grounds |
|---|---|---|
| Type and term of the contract | right deadline, 5 years | Art. 1110, no. 2, CC |
| Minimum notice of denunciation by the lessee | no less than 1 year | Art. 1110, no. 2, CC |
| automatic renewal in term | for successive periods of equal duration, or of 5 years If the duration is shorter | Art. 1110.º, no. 3, CC |
| Opposition to renewal by the landlord in the first 5 years | forbidden, regardless of the stipulated period | Art. 1110, no. 4, CC |
| FUNDAMENTALS OF COMPLAINT BY THE LAND | only paragraphs b) and c) of art. 1101.º | Art. 1110.º-A, no. 1, CC |
| responsibility for the works | free stipulation; in silence, conservation by the landlord | Art. 1111.º, CC |
| transfer of the establishment | without authorization from the landlord, but in writing and communicated | Art. 1112, paragraphs 1 and 3, CC |
| LESSEE’S DEATH | the contract not expires | Art. 1113, no. 1, CC |
The five years that the landlord does not command
It is the most important norm of this regime and the one that generates the most conflicts: Article 1110, no. 4 — “In the first five years after the start of the contract, regardless of the stipulated period, the landlord cannot oppose the renewal.”
read “regardless of the stipulated period”. Sign a one-year, two or three-year contract: during the first five years from the beginning of the contract, the opposition to renewal is prohibited to the landlord. The commercial tenant has, in practice, five years of stability guaranteed by law.
This has very concrete consequences for planning a real estate investment. If you account for rehabilitating the building, changing the use or selling free of charges within three years, a commercial lease signed today does not allow you to do so. Plan the deadline according to your horizon — not the reverse.
Complaint by the landlord: two fundamentals and an invoice
The Article 1110-A, no. 1, strongly restricts the complaint: “In non-usual lease agreements, the landlord can only denounce the contract in the cases provided for in paragraphs b) and c) of article 1101.
- subparagraph b) of article 1101.º — «for demolition or carrying out deep remodeling or restoration works that require the vacancy of the leased, provided that it does not result in a place with characteristics equivalent to those of the leased, where the lease is maintained»;
- subparagraph c) of article 1101.º — “by communicating to the lessee at least five years in advance on the date on which the termination is intended”.
the compensation
Article 1110a(2) is what makes this way expensive: the denunciation “obliges the landlord to indemnify separately the lessee and workers of the establishment for the damages that have been proven to result from the termination of the lease’.
Two important models:
- No. 3 — there is no compensation to the lessee ‘if the lease has been subject to a transfer in the previous three years’;
- No. 4 — in the case of subparagraph b) of article 1101, the amount of the compensation due to the lessee “the amount of the compensation provided for in subparagraph a) of paragraph 1 of article 6 of the legal regime for works is deducted from leased buildings, approved by Decree-Law no. 157/2006, of 8 August, in its current wording».
Before proceeding in this way, add everything: compensation to the lessee, compensation to workers and the cost of the project itself. For the general panorama of the cessation routes, see the guide of Termination of lease agreement: deadlines and rules.
Works: Here freedom is almost total
The Article 1111, no. 1, of course: ‘The rules relating to the responsibility for carrying out the ordinary or extraordinary conservation works, required by law or the end of the contract, are freely established by the parties.’
Only if the parties do not agree, the supplementary regime of paragraph 2 enters: «It is up to the landlord to carry out the conservation works, considering the lessee authorized to carry out the works required by law or required by the end of the contract».
This last part deserves attention. In the silence of the contract, the commercial lessee is authorized by law to carry out the works required by the end of the contract — which, in a restaurant or clinic, can mean deep interventions. If you want to approve each work, write it. and define the destination of the improvements at the end of the contract. Compare with the housing regime in our article on Works and Maintenance in Lease: Who Pays What.
transfer and rental of establishment
two figures typical of commerce, both out of their power of authorization—but not out of their knowledge.
transfer (article 1112)
Transmission by act between living from the position of the lessee is permitted, without dependence on the landlord’s authorization, in the case of a commercial or industrial establishment, or the person who continues to exercise the same liberal profession in the building (n.º 1). but paragraph 2 delimits: not There is a transfer when the transmission is not accompanied by the joint transfer “of the facilities, utensils, goods or other elements that make up the establishment”, nor when it is aimed at the exercise of another branch of commerce or industry.
The remaining numbers protect the landlord:
- No. 3 — the transmission “must be celebrated in writing and communicated to the landlord”;
- No. 4 — ‘the landlord has the right of preference in the transfer for sale or donation in compliance, unless otherwise agreed’;
- No. 5 — If, after the transmission, another destination is given to the building or the transferee does not continue the same liberal profession, “the landlord can terminate the contract”.
LEASE OF ESTABLISHMENT (Article 1109)
It is “the temporary and onerous transfer of the enjoyment of a building or part of it, together with the exploitation of a commercial or industrial establishment installed therein” (nº 1). paragraph 2 waives the authorization of the landlord, “but must be communicated to him within the period of one month».
Housing vs. Non-Housing: The Comparative Framework
| Theme | Housing | non-home |
|---|---|---|
| deadline in the silence of the parties | 5 years (art. 1094, no. 3) | 5 years (art. 1110.º, no. 2) |
| deadline limits | Minimum 1 year, maximum 30 years (art. 1095, no. 2) | freely established (art. 1110.º, no. 1) |
| Supplementary Renewal | periods equal to or 3 years if lower (art. 1096, no. 1) | periods equal to or 5 years if lower (art. 1110, no. 3) |
| Opposition to renewal by landlord | notices of 240/120/60 days or a third of the term (art. 1097, no. 1); The first opposition only takes effect 3 years after the celebration (No. 3) | prohibited in the first 5 years (art. 1110, no. 4) |
| complaint by the landlord (indefinite duration) | subparagraphs a), b) and c) of art. 1101.º | only subparagraphs b) and c) (art. 1110.º-A, no. 1) |
| Complaint compensation | regime of arts. 1102.º and 1103.º | to the lessee and to the workers, separately (art. 1110.º-A, no. 2) |
| construction | regime of art. 1074th | free stipulation (art. 1111.º, no. 1) |
| inter vivos broadcast | own rules | transfer without authorization (art. 1112.º, no. 1) |
| LESSEE’S DEATH | There is no expiry if there is a Transmissory (art. 1106) | not expired; waiver possible in 3 months (art. 1113) |
What happens when the tenant of a store dies is dealt with in detail in the guide on the Death of the lessee and the transfer of the contract.
Checklist before signing a commercial lease
- Write the end of the contract accurately. Without it, article 1027 applies and the lessee chooses within the normal function of the space.
- Confirm usage license and its compatibility with the activity — it is it that article 1067, no. 2, requires to consider.
- Set the deadline and renewal in writing. In silence, it takes 5 years with 5-year renewals (art. 1110.º, paragraphs 2 and 3).
- Take the five years of paragraph 4. Do not rely on the opposition to renewal before that, whatever the term contracted.
- Regulate works and improvements (art. 1111.º, no. 1) — Who does it, who approves, who pays, what is at the end.
- Regulate income updating and the moment in which it applies; See how it works annual income update.
- Predict the trespass. It cannot prohibit it under Article 1112, paragraph 1, but it can organize the communication and safeguard its preference of paragraph 4.
- Distribute charges and expenses — including those of condominium, which in a commercial space weigh more.
- Register the contract at AT Within the legal deadline: step by step guide.
FAQ
What is the term of a commercial lease if the contract says nothing?
five years, with a certain deadline. Article 1110, no. 2, of the Civil Code determines that, “in the absence of a stipulation, the contract is considered to be concluded with a fixed term, for a period of five years, and the lessee cannot denounce it less than one year in advance”.
Can I oppose the renewal of a store lease after two years?
No. Article 1110, paragraph 4, is expressed: ‘In the first five years after the start of the contract, regardless of the stipulated period, the landlord cannot oppose the renewal.’ The ban is valid even if the contracted period is shorter.
In which cases can I report a commercial contract, and do I have to compensate?
only in the cases of paragraphs b) and c) of Article 1101. 1110.º-A, paragraph 1. and yes: paragraph 2 obliges to separately indemnify the lessee and the workers of the establishment for the proven damages, except for the exception of paragraph 3 for transfers occurred in the previous three years.
Can my tenant pass through the store without my authorization?
Yes, under the terms of article 1112, no. 1, when there is a real transfer of commercial or industrial establishment. But the transmission must be concluded in writing and communicated to the landlord (n.º 3), the landlord has the right of preference in the transfer for sale or donation in compliance (n.º 4), and can terminate the contract if another destination is given to the building (n. There is no transfer in the cases of paragraph 2, namely when the facilities, utensils and goods are not transferred together.
Who pays for the works on a commercial lease?
who the contract says. Article 1111, no. 1, leaves the matter to the free stipulation of the parties. It is only in the absence of a convention that it is up to the landlord to carry out the conservation works, considering the lessee authorized to carry out the works required by law or required by the end of the contract (n.º 2).
Does the rental of an establishment have to be communicated?
Yes. Article 1109, no. 2, does not require the authorization of the landlord, but requires that the lease of an establishment be communicated to it within one month.
Contractual freedom is worth gold — if you exercise
Unlike housing, here almost everything that writing prevails over the law. The reverse is that everything not Writing is decided by a generous supplementary regime for the lessee — five years of term, five years of renewal and five years without opposition. Start with a full contract: you can generate a lease agreement for free and monitor the changes foreseen in the new lease regime. more guides for landlords in Aluseg Articles Hub.
This article is for information purposes only and does not constitute legal advice. The applicable regime depends on the date and content of each contract. Before celebrating, altering or terminating a commercial lease, consult a lawyer or solicitor.
