PORTUGAL Law and Practice Contributed by: João Gonçalo Galvão, Carolina Cardoso Alves, Miguel Paquete and Mafalda Oliveira Cordeiro, CS’Associados
may outline conditions for assignment or subletting, such as ensuring that the assignee/subtenant meets specific financial or operational criteria, or that the property’s original use is maintained. Additionally, the original tenant may be required to remain liable for the lease obligations. In respect of subleases, it should be noted that the tenant may not charge subtenants a rent (proportion - ally) higher than its own rent increased by 20% with - out the landlord’s consent. Transfer of Undertaking and Other The following do not require landlord consent: • transfer of commercial or industrial undertaking or business as a going concern, although, except if otherwise agreed, the landlord is entitled to a pre- emption right regarding such transfer; • temporary assignment of a business; • assignment to an entity that continues to perform in the leased premises the same independent pro - fession/activity. 6.19 Right to Terminate a Lease The general principle is that any party is entitled to ter - minate a lease agreement if the counterparty commits a breach that, due to its materiality or consequences, renders the agreement such that it cannot reasonably be requested to the non-defaulting party to maintain it in force. The NRAU provides a non-exhaustive list of cases of breach that constitute fair grounds for termination of a lease by the landlord, namely non-payment of rents (with a delay of at least three months or four con - secutive or non-consecutive delays within a 12-month period in rent payment exceeding eight days), unau - thorised use/sublease by the tenant, unlawful use of the premises, failure to use the property for over one year or breach of health, noise or other regulations. The tenant is by law entitled to terminate the agree - ment if the property has a defect or develops one that endangers the life or health of the tenant or if the ten - ant is deprived of its use, even if only temporarily, for reasons beyond its control.
The parties also retain the possibility of stipulating other specific causes for termination. 6.20 Registration Requirements Lease agreements must be executed in writing, notar - ial intervention or other authentication formalities not applying. Leases must be communicated to the tax authorities before the end of the month following their execution, this triggering the landlord’s requirement to pay stamp duty amounting to 10% of the value of one month of rent. Leases of urban properties entered into for an initial term of more than six years, as well as their assign - ments and subleases, are subject to mandatory reg - istration with the LRO in order to be effective vis-à-vis third parties, with tenants bearing the cost of registra - tion unless otherwise agreed. 6.21 Forced Eviction Landlords may resort to the common courts to seek the early termination of a lease due to breach by the tenant and obtain an eviction order so as to reinstate vacant possession of the premises; this is, however, a lengthy procedure that usually averages between one and two years (depending on the courts’ workload and the defence presented by the tenant, particularly if the materiality of the breach can be challenged). Alternatively, provided that certain legal requirements are met, landlords may use a special electronic evic - tion procedure, with a potential timeline of six to eight months. 6.22 Termination by a Third Party A lease agreement may not be directly terminated by a third party, such as a governmental or municipal authority. However, lease agreements may expire as a result of third-party actions, such as, by way of exam - ple, an expropriation of the leased premises which is incompatible with the lease, or an administrative order determining the closure of such premises due to breach of safety regulations. On a different note, unless agreed otherwise with the property owner, subleases automatically expire in the event of expiration of the underlying head lease.
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