PORTUGAL Law and Practice Contributed by: João Gonçalo Galvão, Carolina Cardoso Alves, Miguel Paquete and Mafalda Oliveira Cordeiro, CS’Associados
ject to a condominium regime where the premises are located (if applicable), including areas such as parking lots or gardens, as well as of services of common interest (such as cleaning or security). Without prejudice, as further detailed in 6.4 Typical Terms of a Lease , the landlord and the tenant may agree that certain maintenance and repair costs are to be fully or partially covered by the tenant. 6.10 Payment of Utilities and Telecommunications By default, the tenant shall bear all costs relating to the supply of goods and services (including utilities and telecommunications). Typically, these expenses are not included in the rent amount and are paid directly to providers by each tenant individually based on their respective consumption levels. In multi-tenant spaces, utility costs may be distributed between tenants based on an equal cost-allocation criterion (each tenant paying an equal share regard - less), or based on their respective consumption lev - els (either directly measured, if technically feasible, or estimated based on a determined criterion such as the number of occupants or area). Some landlords may offer “all-inclusive” rent schemes that already comprise utility fees. This is more com - mon in student housing, co-living spaces or short- term rentals. 6.11 Payment of Property Taxes Pursuant to law, landlords are responsible for payment of property taxes owed in respect of leased proper - ties, although this cost may be contractually allocated to tenants. Real estate taxes paid by the landlord include Munici - pal Property Tax (IMI) and Additional Municipal Prop - erty Tax (AIMI) – see 8.3 Municipal Taxes . 6.12 Insurance Issues The landlord typically bears the cost of property insur - ance, such as multi-risk insurance covering property destruction and damage, including due to fire, floods, weather events, earthquakes and vandalism. In dou - ble or triple net leases it is, however, common that
the cost of property insurance policies is allocated to tenants. Tenants are responsible for purchasing and maintain - ing all insurance legally required for the performance of their activity in the premises. Lease agreements may also stipulate that the tenants are required to enter into specific civil liability insurance covering operational risks and potential damages caused to third parties, as well as to their belongings and equip - ment. 6.13 Restrictions on the Use of Real Estate Use of real estate by tenants is subject to restrictions arising from mandatory law (such as general notice laws, zoning regulations, etc), as well as from the terms of the respective leases. The main limitation concerns the prohibition of the tenant from using the property for any purpose other than the one for which it is specifically licensed. Standard restrictions imposed by landlord concern: • prohibition from subleasing the premises without prior consent; • prohibition from performing any structural changes to the property; • forbidding the pursuit of unlawful or unlicensed activities; • the need to comply with certain structural limita - tions of the property; and • no storage of inflammable/dangerous substances. Further restrictions may also be imposed by condo - minium regulations or short-term rental regulations. 6.14 Tenant’s Ability to Alter and Improve Real Estate Generally, tenants are entitled to alter and improve real estate, such improvements reverting to the benefit of the landlord at the end of the lease, it usually being agreed that the tenant is not entitled to any compen - sation therefor. Apart the initial fit-out/adaptation works that are usu - ally authorised in the lease agreement, execution by
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