In Portugal, the tenant cannot sublet without the landlord’s written authorization. This stems from Article 1038, paragraph f), of the Civil Code, which prohibits the tenant from providing a third party with the use of the property unless the law permits it or the landlord authorizes it, and from Article 1088, paragraph 1, which requires such authorization to be given in writing. If you do authorize it, the tenant cannot charge the subtenant more than their own rent plus an additional 20% (Article 1062). If you did not authorize it, be careful with your next steps: recognizing the occupant as a subtenant ratifies the sublease and revokes your right to terminate the contract.
What is — and what is not — a sublease
The legal definition is found in Article 1060 of the Civil Code: a sublease occurs «when the lessor enters into it based on the tenant’s rights derived from a previous lease agreement». In other words: your tenant becomes the landlord to someone else, using the contract they hold with you as the foundation.
Not everything that looks like a sublease actually is one. The law distinguishes several ways third parties can occupy the leased property, subject to very different regimes — and confusing them is the source of most conflicts.
| Form of occupation | What it is | Needs authorization? | Legal basis |
|---|---|---|---|
| Sublease (subletting) | The tenant enters into a new lease based on the rights derived from their contract with you | Yes, in writing | Arts. 1060 and 1088, paragraph 1, CC |
| Assignment of the lease | The tenant leaves and another person takes their place in the contract | Yes (general regime of Arts. 424 et seq.) | Arts. 1038, f), and 1059, paragraph 2, CC |
| Commodatum (free loan of use) | The tenant lends the use of the leased property without compensation | Yes | Art. 1038, f), CC |
| People in a common household | De facto partners, relatives or in-laws in the direct line or up to the 3rd degree of the collateral line, among others | No | Art. 1093, nos. 1(a) and 2, CC |
| Guests | Persons to whom the tenant provides housing and routinely provides related services or supplies food, for remuneration | No, up to three, unless otherwise stipulated | Art. 1093, nos. 1(b) and 3, CC |
| Lease of establishment (non-residential) | Temporary and remunerated transfer of the use of the property along with the operation of the business established therein | No, but it must be communicated within 1 month | Art. 1109, no. 2, CC |
Practical interpretation: Article 1093, no. 1, allows that, besides the tenant, anyone living with them in a shared household and ‘a maximum of three guests, unless otherwise stipulated‘ may reside in the property. This final expression is your tool: if you do not want guests in the property, you must state it in the contract. By not including this clause, you accept, by default, up to three guests.
The basic rule: without written authorization, there is no enforceable sublease
Article 1038 lists the tenant’s obligations. Two of them are of direct interest here:
- Paragraph f) — ‘Not to provide others with total or partial use of the property through paid or free assignment of their legal position, subletting, or free loan, unless permitted by law or authorized by the landlord’;
- Paragraph g) — ‘Communicate to the landlord, within fifteen days, the transfer of use of the property under any of the aforementioned conditions, when permitted or authorized’.
There are, therefore, two cumulative duties: obtaining the authorization and, subsequently, communicating the transfer within 15 days. Article 1088, no. 1, adds the format: ‘The authorization to sublet the property must be given in writing.’
Until this happens, the sublease exists between the tenant and the subtenant, but it is not binding on you. This is what Article 1061 states: ‘Subletting only takes effect in relation to the landlord or third parties upon its recognition by the landlord or the communication referred to in paragraph g) of Article 1038.’
The 20% cap on the subtenant’s rent
Many landlords discover too late that their tenant is making money from the property. The law already anticipates this. Article 1062 of the Civil Code imposes a limit: ‘The tenant cannot charge the subtenant rent or a fee higher or proportionally higher than what is due under the lease agreement, increased by twenty percent, unless otherwise agreed with the landlord.’
Two essential points in this rule:
- ‘Proportionally higher’ — in partial subletting (a bedroom, for example), the limit is calculated on the proportional part of the rent, not on the total rent;
- ‘Unless otherwise agreed with the landlord’ — the cap can be waived, but only by agreement with you. This is the right time to negotiate compensation in return.
| Main lease rent | Scope of the subletting | Default legal limit (Art. 1062) |
|---|---|---|
| 800 €/month | Total (the entire property) | 960 €/month (800 € + 20%) |
| 800 €/month | Partial — part corresponding to 300 € of the rent | 360 €/month (300 € + 20%) |
| 800 €/month | Any, with a written agreement from the landlord to the contrary | Whatever is agreed upon |
Values are purely illustrative of the calculation provided by law.
Unauthorized subletting: what you can (and should not) do
The unlawful transfer of the use of the property is grounds for terminating the lease. Article 1083, paragraph 2, point e), expressly includes among serious breaches ‘the assignment, in whole or in part, temporary or permanent, and for consideration or free of charge, of the use of the building, when unlawful, invalid, or ineffective against the landlord’.
But there are two pitfalls that can make this right disappear:
- Tacit ratification. Article 1088(2) states that ‘an unauthorized sublease is, however, considered ratified by the landlord if they recognize the subtenant as such’. You do not need to sign anything: simply treating them as a subtenant is enough.
- Loss of the right of termination. Article 1049 is even more direct: the landlord ‘has no right to terminate the contract on the grounds of violation of the provisions of paragraphs f) and g) of Article 1038, if they have recognized the beneficiary of the assignment as such, or even, in the case of paragraph g), if the communication was made to them by the latter’.
Notice the second part: if the subtenant themselves informed you of the situation, you can no longer invoke the lack of communication under paragraph g).
In practice: as soon as you suspect an unauthorized sublease, do not negotiate directly with the occupant, do not issue them receipts, and do not accept payments from them before deciding your position — each of these actions can be seen as recognition. Speak first with your tenant, in writing, and only then make a decision. For the framework of termination methods, see our guide on lease agreement termination: deadlines and rules.
If you decide to authorize: the powers you gain
Authorizing does not mean giving up control. A recognized sublease gives you two tools you wouldn’t have otherwise.
1. Collect directly from the subtenant
Article 1063: ‘If both the tenant and the subtenant are in arrears regarding their respective rent debts, it is lawful for the landlord to demand from the subtenant what they owe, up to the amount of their own credit.’ Two cumulative conditions: both in arrears, and the limit is the amount of your own credit.
2. Replacing the tenant in a full sublease
Article 1090, paragraph 1: ‘When the sublease is full, the landlord may replace the tenant through judicial notification, at which point the original lease is considered terminated and the subtenant becomes the direct tenant.’ This is the method to eliminate the middleman when the original tenant no longer even lives there.
Paragraph 2 of the same article contains the flip side of the coin, and acts as a warning: ‘If the landlord receives any rent from the subtenant and issues them a receipt after the lease has ended, the subtenant is deemed to be the direct tenant.’ Issuing a receipt after the main contract terminates creates a new direct tenant without any further formalities.
The sublease dies with the main contract
Article 1089 resolves the question most frequently asked by subtenants: ‘The sublease expires with the termination of the lease agreement for any reason, without prejudice to the liability of the sublessor towards the subtenant when the reason for termination is attributable to them.’
Whether the main contract ends by expiration, notice of termination, opposition to renewal, or termination for cause — the sublease falls with it. If the cause of termination is attributable to the original tenant, it is they, and not the landlord, who answers to the subtenant.
Non-residential: the exception of leasing a business establishment
In non-residential leases, there is a specific framework. Article 1109, paragraph 1, defines the leasing of an establishment as ‘the temporary and onerous transfer of the use of a building or part of it, together with the operation of a commercial or industrial establishment installed therein’. And paragraph 2 introduces the key difference: this transfer ‘does not require the landlord’s authorization, but must be communicated to them within a period of one month’.
In other words: in commercial leases, the landlord does not authorize — they are informed, and there is a one-month deadline to be informed. The same principle is found in Article 1112 regarding the transfer of a business lease.
Landlord’s checklist
- Write the clause. Expressly state in the contract whether you allow or prohibit guests — without a clause, Article 1093 allows up to three.
- Identify all occupants in the contract from day one. It is the basis for any future discussion and prevents last-minute requests, such as the accommodation declaration for AIMA.
- Require written authorization (Art. 1088, paragraph 1) and a justified request: who, what part of the property, for how long, and for what amount.
- Set the amount. If you accept an amount above the ceiling set by Article 1062, expressly agree on it in writing — and consider an appropriate compensation.
- Confirm the communication within the 15 days required by subparagraph g) of Article 1038.
- Request a copy of the sublease agreement and verify that the term does not exceed that of your contract — under Article 1089, it expires with it.
- Keep your records in order. An authorized sublease has its own tax implications; confirm your reporting duties with the Tax Authority (AT).
- Document everything. Under Articles 1049 and 1088, paragraph 2, silence and informal gestures count against you.
Frequently asked questions
Can my tenant rent out a room without asking me?
It depends on the classification. If it is a sublease, Article 1038, paragraph f), requires your authorization, and Article 1088, no. 1, requires it to be in writing. If it is lodging — people to whom the tenant regularly provides services or supplies food for remuneration, as defined in Article 1093, no. 3 —, the law allows up to three guests, unless otherwise stipulated in the contract. The boundary is factual, which is why the contractual clause is decisive.
I discovered an unauthorized sublease. What can I do?
The unlawful transfer of the use of the property is grounds for termination, under Article 1083, no. 2, paragraph e), of the Civil Code. But beware of Articles 1049 and 1088, no. 2: if you recognize the occupant as a subtenant, the sublease is considered ratified, and you lose the right to terminate on those grounds. Before making any contact with the occupant, seek legal advice.
How much can my tenant charge the subtenant?
At most, the rent due under the main contract plus 20%, or the proportional part of that rent plus 20% for a partial sublease, under Article 1062 of the Civil Code. This limit can only be waived by an agreement with you.
If I authorize it, do I have a direct relationship with the subtenant?
Partially. Article 1063 allows you to demand from the subtenant what they owe, up to the amount of your own credit, when both are in default. And, in a total sublease, Article 1090, no. 1, allows you to substitute the tenant through judicial notification, making the subtenant your direct tenant.
What happens to the subtenant when the main contract ends?
The sublease expires with the termination of the tenancy, for any reason, under Article 1089. The responsibility towards the subtenant falls on the original tenant when the reason for the termination is attributable to them.
The right clause is worth more than an argument later.
Almost all subletting disputes stem from contracts that say nothing about the subject. Define on paper who can occupy the property, under what conditions, and with what authorizations — and carefully evaluate who signs, using our tenant selection checklist and best practices for tenant relationships. Generate an NRAU-compliant lease agreement with occupancy and subletting clauses already included.
This article is for informational purposes only and does not constitute legal advice. The rules described are based on the text of the Civil Code in force, but the qualification of each specific situation depends on the facts. For your case, consult a lawyer or solicitor.
